Cruise Line Industry Calls For Exemption From US Taxes

by Leroy Baker, Tax-News.com, New York

28 September 2005

The International Council of Cruise Lines has requested that the United States Treasury Department grant a tax break to foreign flagged ships hired by the US government.

The issue has been highlighted by the ICCL, a trade association for the cruise ship industry, after the Federal Emergency Management Agency's chartered three cruise ships belonging to Carnival Corp. for a period of six months to assist in the Hurricane Katrina relief effort.

While most cruise ships are registered offshore and therefore do not pay US taxes, J. Michael Crye, the president of the ICCL, is calling for all companies providing ships to assist in federal relief efforts to be exempt from US payroll and corporate taxes. This, he argued, would allow different types of ships to be drafted by the US government, expanding the number of vessels available to assist in emergencies.

Crye added that the exemption would act in a similar way to tax relief provided to foreign flagged vessels transporting fuel between US ports in an attempt to increase the oil supply in the wake of Hurricane Katrina.

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