American Ports Raise Cruise Line Tax Concerns

The American Association of Port Authorities (AAPA) has raised concerns about ongoing tax reform plans being considered by Congress which involve a new tax on overseas cruise lines. 

Kurt Nagle, AAPA President and CEO, has written to Senate leaders saying: “Cruise lines are mobile assets that can easily be moved from uncompetitive markets to more favorable jurisdictions. The global cruise industry contributed nearly $50 billion to the U.S. economy last year, supporting more than 370,000 U.S. jobs which paid over $20 billion in wages and benefits.

“In 2016, a record 24.2 million passengers cruised globally, of which 11.52 million were from the United States. Demand for cruising has increased 62 percent in the past 10 years. It is a rapidly growing industry with 26 million passengers expected to cruise in 2017. Nationally, the cruise industry directly spends $22 billion annually in the U.S. for products and services from every state, and this proposed tax places these economic benefits at great risk.”

Port Tampa Bay President and CEO Paul Anderson said that negatively changing the tax status of cruise lines will result in lost economic benefits throughout the U.S., and certainly in port communities. Anderson notes that he remembers well the disastrous results brought on the U.S. shipping industry in 1986 when changes were made to cargo shipping taxation, saying “I’m concerned about similar negative impacts today if taxation is applied to the cruise industry.”

The Association is also concerned that America’s ports would be negatively impacted if Private Activity Bonds (PABs) lose their tax-exempt status in the tax reform legislation that has been passed by the House and is now being debated on the Senate floor.