I 
119TH CONGRESS 
2D SESSION 
H. R. 7222 
To amend the Internal Revenue Code of 1986 to include watercraft as 
applicable passenger vehicles for purpose of deducting personal loan interest. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 22, 2026 
Ms. MACE introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to include 
watercraft as applicable passenger vehicles for purpose 
of deducting personal loan interest. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘No Tax on Boat Loan 
Interest Act of 2026’’. 
SEC. 2. NO TAX ON BOAT INTEREST. 
(a) IN GENERAL.—Section 163(h)(4)(D) of the In-
ternal Revenue Code of 1986 is amended to read as fol-
lows: 
‘‘(D) APPLICABLE PASSENGER VEHICLE.— 
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‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘applicable pas-
senger vehicle’ means an applicable motor 
vehicle or an applicable watercraft. 
‘‘(ii) APPLICABLE MOTOR VEHICLE.— 
For purposes of this subparagraph. the 
term ‘applicable motor vehicle’ means any 
vehicle— 
‘‘(I) the original use of which 
commences with the taxpayer, 
‘‘(II) which is manufactured pri-
marily for use on public streets, roads, 
and highways (not including a vehicle 
operated exclusively on a rail or rails), 
‘‘(III) which has at least 2 
wheels, 
‘‘(IV) which is a car, minivan, 
van, sport utility vehicle, pickup 
truck, or motorcycle, 
‘‘(V) which is treated as a motor 
vehicle for purposes of title II of the 
Clean Air Act, and 
‘‘(VI) which has a gross vehicle 
weight rating of less than 14,000 
pounds. 
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Such term shall not include any vehicle the 
final assembly of which did not occur with-
in the United States. 
‘‘(iii) APPLICABLE
WATERCRAFT.— 
For purposes of this subparagraph, the 
term ‘applicable watercraft’ means a 
watercraft— 
‘‘(I) the original use of which 
commences with the taxpayer, 
‘‘(II) which is a recreational ves-
sel (as defined in section 2101 of title 
46, United States Code), and 
‘‘(III) which is a motorboat, as 
such term is defined in section 90.10– 
23 of title 46, Code of Federal Regu-
lations (as in effect on the date of the 
enactment of this subparagraph). 
Such term shall not include any vessel the 
final assembly of which did not occur in 
the United States.’’. 
(b) HULL IDENTIFICATION NUMBER REQUIRED.— 
Section 163(h)(4)(iii) of such Code is amended by striking 
‘‘the vehicle’’ and all that follows through the end of the 
sentence and inserting ‘‘on the return of tax for the tax-
able year the vehicle identification number (in the case of 
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an applicable motor vehicle) or the hull identification num-
ber (in the case of an applicable watercraft).’’. 
(c) 
CONFORMING
AMENDMENT.—Section 
6050AA(b)(2)(E) of such Code is amended by inserting 
‘‘or hull’’ after vehicle. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to indebtedness incurred after De-
cember 31, 2024. 
Æ 
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