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US Highway Trust Fund Tax Proposals Criticized

by Mike Godfrey, Tax-News.com, Washington

16 October 2015


There have been protests from US lawmakers and the travel industry over the proposed use of Customs and Border Protection (CBP) fees to cover part of the shortfall in the Highway Trust Fund (HTF).

The previous short-term extension to the HTF runs out on December 18.

The House of Representatives has been considering how to fund a longer-term HTF renewal this time around. However, proposals to buoy up the Fund using revenues from international tax reform appear to be not feasible, and the option of funding a shorter term renewal, partly through diverting Customs User Fees to the fund, has been put forward.

Currently, CBP collects the fees to recover the agency's costs for processing air and sea passengers, and private and commercial land, sea, air and rail carriers and shipments.

An October 13 letter to the House Ways and Means Committee from Democrat members of the Committee on Homeland Security and the Appropriations Committee's Subcommittee on Homeland Security expressed concern that a proposal to divert the fees would set a "troubling precedent," and "jeopardizes a significant source of border security funding … to pay for unrelated projects in the highway bill."

A previous letter to both the House Ways and Means Committee and the Senate Finance Committee from the Airports Council International – North America, Airlines for America, the Global Business Travel Association, the International Air Transport Association, Travelers United, and the US Travel Association, had also emphasized that they "strongly oppose any suggestion that highway funding be generated via an increase in the aviation passenger's CBP fees."

"If provisions to increase and divert CBP fees to pay for highway investments are enacted," the organizations continued, "progress in encouraging trade and travel, as well as the jobs created by these activities, will be jeopardized."

"The Administrative Conference of the United States has developed detailed recommendations for Congress to consider when imposing user fees. The number one recommendation of the Conference is that '[a] government service for which a user fee is charged should directly benefit fee payers.' Absent this payer benefit, a user fee is nothing more than a tax increase," the letter added. "In this case, airline passengers should not be used as a piggy bank to pay for highway investments that benefit highway users."

TAGS: tax | marine | law | aviation | fees | travel and tourism | legislation | United States | services | Travel | North America

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