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US Bill To Abolish Harbor Maintenance Tax

by Mike Godfrey, Tax.News.com, Washington

20 August 2013


It is expected that, next month, a bill will be placed before the United States Senate that will propose a repeal of the existing Harbor Maintenance Tax (HMT) and the imposition, in its stead, of a new fee that would also be levied on goods imported by road and rail from Canada and Mexico.

The HMT is a federal tax imposed on the value of the goods being shipped through US ports, and its revenue is placed in a trust fund, which is supposed to be used for maintenance dredging of federal navigational channels. More than USD1.6bn in revenue was collected in 2012, and the surplus in the Harbor Maintenance Trust Fund has grown to more than USD7bn.

The HMT is not, however, assessed on importers who route cargo through non-US ports and afterwards move their goods into US markets by land, and the bill to be introduced by two Democrat Washington Senators, Patty Murray and Maria Cantwell, will set out to "level the playing field for American ports competing for cargo."

Specifically, the "Maritime Goods Movement Act for the 21st Century" would repeal the HMT and replace it with a Maritime Goods Movement User Fee (MGMUF), the proceeds of which would be fully available to Congress to provide for port operation and maintenance, and which would "ensure that shippers cannot avoid the MGMUF by using ports in Canada and Mexico."

It would also, for example, set aside a portion of the user fee for low-use, remote and subsistence harbors that are at a competitive disadvantage for federal funding, and create a grant program using a percentage of the collected user fees to improve the US intermodal transportation system.

"Senator Cantwell and I have worked with small and large ports here in Washington state, the business community and labor leaders to write the Maritime Goods Movement Act, which will make desperately needed improvements to the laws that impact ports of all sizes and business large and small – exporters and importers," Murray said. "This legislation will change the HMT to give shippers new incentives to move their goods through American ports – particularly those in the Pacific Northwest."

"Fixing the HMT is about giving businesses and workers in our trade economy tools to succeed in a global marketplace," Cantwell added, "because we know that if the playing field is level, Washington's state ports and products will win out."

TAGS: tax | business | marine | law | Mexico | fees | legislation | Canada | United States | trade

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