Short sea group calls for harbor maintenance tax exemption
A key organization promoting U.S. short sea shipping is calling on Congress to exempt domestic and Great Lakes non-bulk shipping from the Harbor Maintenance Tax (HMT) as part of any economic recovery/stimulus legislation.
Making such a change “would remove a barrier to use of U.S.-flag shipping and thus foster job creation in the maritime sector,” said the Coastwise Coalition in a letter sent earlier this month to Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee.
The coalition of public and private sector organizations and individuals including ports, maritime labor unions, shipyards, transportation professionals, vessel operators and other transportation providers, promotes increased use of the waterways for transportation.
“Congress should promptly enact legislation that would exempt carriage of non-bulk domestic and Great Lakes cargo from the Harbor Maintenance Tax,” the group says. “This is cargo currently moving largely on congested and aging highways that can have the option of moving on water routes.”
It said, “There are some exemptions to this tax already, notably when the vessel movement in question pays the inland waterways fuel tax, for passenger ferries, and for certain shipping that serves Hawaii, Alaska and U.S. possessions. However, absent applicability of exemptions, or an unusually strong special niche market, the HMT is a serious barrier to moving these non-bulk cargoes on water in domestic or Great Lakes service, as we explain.”
HMT is an ad valorem charge — 0.125 percent — on international cargo entering this country, on domestic cargo moving between U.S. ports, and cruise passenger tickets.
The coalition said the tax discourages the use of marine transportation because of its cost and the administrative paperwork hassles it creates.
Without an exemption “the marine highway alternative would obligate the owners of goods with a value over $1,000 in the truck to file separately the appropriate HMT payment with Customs and Border Protection, the collecting agency. That, of course, assumes that the shipper knows that the truck opted for the water route,” the coalition said.
Eliminating the tax could help create jobs, strengthen defense by having more active, trained seafarers, stimulate shipbuilding and port construction, ease landside congestion, reduce energy consumption and reduce pollution, the group's letter said.
The benefits would come at “very little cost to the Treasury” since so little domestic non-bulk cargo moves by ship or barge today, the coalition added. ' Chris Dupin