AB 71 [Chiu], legislation opposed by Recreational Boaters of California [RBOC] that would eliminate the state tax deduction for mortgage interest on second homes, has passed the Assembly Commitee on Revenue and Taxation.
RBOC testified in committee that the organization remains opposed to AB 71 unless this provision is removed from the bill. The California Association of Realtors, the Howard Jarvis Taxpayers Association, and others are also advocating in opposition to this provision.
RBOC supports the provisions of AB 71 that propose to increase the amount of tax credits available for low income housing.
However, RBOC is concerned that the provisions of AB 71 that would eliminate the state tax deduction for mortgage interest on second homes would lead a significant number of prospective boat purchasers not to invest in a recreational vessel.
This would have a direct, negative impact on the future purchase of recreational vessels, the multibillion dollar state boating industry including ancillary products and services, as well as the economic health of many communities across the state that rely on revenues generated by boaters.
RBOC also stresses that it is important to note that the amount of the mortgage interest deduction is already capped regardless of whether the taxpayer has one home or two, and that recreational vessels that are second homes may not necessarily be vacation homes but could be used by owners who commute to work during the week.