Understanding the 2025 One Big Beautiful Bill Act and What It Means for Yacht Owners

Now Is The Best Time To Buy A Yacht For Business Use

If you’ve been following the news about tax changes, you might have heard about the One Big Beautiful Bill Act (OBBBA) that was signed into law on July 4, 2025. For yacht owners who use their vessels for business purposes, this legislation brings some noteworthy changes worth understanding.

At Denison Yachting, we’ve been fielding questions about what this means for our clients, so we thought it would be helpful to break down the key points and clarify how these new rules work.

The Main Changes For Yacht Owners

The headline news is that 100% bonus depreciation has been restored permanently for qualified property placed in service after January 19, 2025. Previously, this benefit was scheduled to phase down to 40% in 2025 and disappear entirely by 2027. Now it’s back at 100% through December 31, 2029.

What does this mean in practical terms? If you purchase a yacht and use it primarily for business purposes, you may be able to deduct the full purchase price in the first year, rather than spreading those deductions over several years.

Here’s an example: Let’s say you purchase a $3 million yacht and use it 70% for charter business. You could potentially deduct $2.1 million in year one. The actual tax savings depend on your tax bracket and overall financial situation, which is why it’s important to work with a qualified tax advisor.

How Business Use Works

To qualify for these tax benefits, your yacht must be used for legitimate business purposes more than 50% of the time. The most common approach is placing your yacht in a charter program.

We’ve helped many owners set up charter operations over the years, and the process is fairly straightforward when done properly. The key is treating it as a real business, which means:

• Actively marketing your yacht for charter
• Setting competitive rates based on market conditions
• Maintaining proper documentation of all charter activity
• Keeping detailed financial records

Some owners also use their yachts for other business purposes, such as client entertainment or corporate events, though these uses require careful documentation and may have different tax implications.

Important Requirements To Consider

Location Requirements: Your yacht needs to operate in U.S. waters (including Puerto Rico and the U.S. Virgin Islands) more than 50% of the time. Both U.S. and foreign-flagged vessels can qualify, which gives you flexibility in how you structure ownership.

Documentation Standards: The IRS requires thorough records to support business use claims. This includes:

• Charter agreements and contracts
• Guest information and trip logs
• Financial records showing income and expenses
• Marketing materials and advertising efforts
• Clear documentation of business vs. personal use

Timing Considerations: These benefits apply to yachts placed in service between January 19, 2025, and December 31, 2029. It’s a defined window, so understanding the timeline is important for planning purposes.

Ongoing Requirements: If your business use drops below 50% after the first year, you may face tax recapture, meaning you’d have to pay back some of the deductions. It’s important to maintain qualifying use throughout your ownership period.

Planning Your Next Steps

If you’re considering how these tax changes might apply to your situation, here’s a practical approach:

Consult Your Tax Advisor: Every situation is unique, and tax law is complex. A qualified advisor who understands yacht ownership can help you understand the specific implications for your circumstances.

Evaluate Your Usage Plans: Be realistic about how much you’ll use your yacht for business versus personal enjoyment. The 51% threshold is firm, so your plans need to support that level of business use.

Consider Your Options: Whether you’re looking at new yachts or exploring the pre-owned market, understanding how different vessels perform in charter can help inform your decision.

Consider Your Options: Whether you’re looking at new yachts or exploring the pre-owned market, understanding how different vessels perform in charter can help inform your decision.

Understand the Commitment: Running a charter business requires effort and attention. While management companies can handle much of the work, you’re still operating a business that needs to be taken seriously.

How Denison Can Help

At Denison Yachting, we’ve been working with yacht owners for three generations. We’ve seen tax laws change, markets shift, and new opportunities emerge. Our role is to help you understand your options and make informed decisions.

If you’re curious about how charter management works, wondering about sales tax implications in different states, or simply want to explore what yachts might work well for business use, we’re happy to share what we know.

The Big Beautiful Bill has created new possibilities for yacht owners who are willing to approach ownership as a business opportunity. While the tax benefits are significant, they’re just one part of the equation. The lifestyle, the experiences, and the potential for your yacht to pay its own way – these are all factors worth considering.

Contact us if you’d like to discuss how these changes might apply to your situation. We can connect you with tax professionals who specialize in yacht ownership and help you explore vessels that might fit your plans.

The information contained in this article is provided for general informational purposes only and should not be construed as legal, tax, or accounting advice. Denison Yachting makes no representations or warranties as to the accuracy or completeness of the information provided and expressly disclaims any and all liability that may arise from reliance on such information. The application and impact of any laws or regulations, including the One Big Beautiful Bill Act, can vary widely based on the specific facts and circumstances of each individual, including but not limited to vessel usage, ownership structure, and jurisdiction. All readers are strongly encouraged to consult with their own qualified legal, tax, and accounting advisors before making any decisions. Denison Yachting does not accept any responsibility or liability for any loss or damage arising from reliance on the information contained herein.

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