Congresswoman Nancy Mace has introduced new legislation aimed at reducing taxes for South Carolina boat owners and supporting the state’s marine industry. The No Tax on Boat Loan Interest Act of 2026 would allow interest paid on loans for qualified recreational boats to be deducted from federal taxes, similar to the current deduction available for American-made motor vehicles.
Boating is a significant part of South Carolina’s economy and culture. The recreational boating sector in the state generates over $6.5 billion each year and supports more than 27,100 jobs. There are more than 350,000 registered recreational boats in South Carolina, driving demand for manufacturers, dealers, service providers, marinas, and small businesses along the coast.
According to Congresswoman Mace, “South Carolina’s boating industry is the backbone of our coastal economy. This legislation ensures American-made recreational boats are treated fairly under the tax code, supporting the thousands of South Carolina families whose livelihoods depend on marine manufacturing and services. It’s about protecting good-paying jobs in our coastal communities and providing tax relief to the hardworking South Carolina families who power our state’s economy.”
The bill specifies that only certain boats qualify: they must be first used by the purchaser, classified as recreational vessels under federal law and as motorboats under federal regulation, and assembled in the United States. The maximum annual deduction is set at $10,000 per year through 2028 and phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers). Taxpayers will need to provide their boat’s hull identification number when filing.
Support for the proposal comes from several national boating groups. Frank Hugelmeyer of the National Marine Manufacturers Association stated: “The No Tax on Boat Loan Interest Act recognizes the vital economic role recreational boating plays across American communities. With 95 percent of boats sold in the U.S. built here at home, and the vast majority by small businesses, this bill helps strengthen American manufacturing and protect good jobs. At the same time, it makes boating more accessible to families facing rising costs and encourages time on the water for recreation. We thank Congresswoman Nancy Mace for her leadership and commitment to supporting a thriving, homegrown industry.”
Matt Gruhn from Marine Retailers Association of the Americas said: “The MRAA applauds the leadership of Representative Mace for introducing the No Tax on Boat Loan Interest Act…This change will provide needed relief to hardworking Americans who support our nation’s recreational boating industry by allowing them to deduct interest paid on loans used to buy American-made watercraft. With the majority of boat owners in America making less than $100,000 a year, this bill stands to significantly benefit working-class Americans and help encourage more folks to get on the water…”
David Kennedy from Boat Owners Association of the United States added: “A boat is often a family’s single biggest investment in outdoor recreation…Treating boat loan interest in the same manner as cars and recreational vehicles is sound tax policy. On behalf of our over 740,000 members nationwide, including some 20,000 in South Carolina, we applaud Representative Mace for bringing this proposal forward.”
Nationally, recreational boating produces an economic impact of $230 billion annually while supporting more than 36,000 businesses and over 800,000 jobs.
Nancy Mace has represented South Carolina’s 1st Congressional District since 2021 after replacing Joe Cunningham (source). Before joining Congress she served in South Carolina’s House of Representatives from 2018 until 2020 (source). She was born in Fort Bragg in 1977 and currently resides in Charleston (source). Mace graduated from The Citadel with a Bachelor of Science degree in 1999.
