TOSI: U.S.-FLAG VESSEL INDUSTRY TO BATTLE CUSTOMSÆ SHIP REPAIR TAX
The U.S.-flag vessel industry, unions and trade associations are preparing for a major lobbying campaign to eliminate a U.S. Customs ship repair tax when Congress returns later this month.
The new rule imposes a 50-percent ad-valorem on all supplies and parts used in routine repairs and maintenance by crews while the vessels are on the high seas. It’s estimated that the tax, if fully enforced, would add about $200,000 to the taxes already paid by U.S.-flag vessel operators each year, in addition heap a hefty administrative and paperwork burden on crews.
An industry coalition last year protested to Customs about the regulation. Five ranking senators with interest in preserving the U.S. merchant marine, similarly, voiced their opposition to the ship repair tax.
“To our dismay, the Customs Service virtually ignored every one of our arguments and told us that the rule stands,” said Gloria Cataneo Tosi, president of the Washington-based American Maritime Congress, at a press conference Friday. “Since we have exhausted all administrative remedies, we have no recourse now but to go to Congress and that is where we’ll be going in the months ahead to get this awful regulation wiped off the books.”