A new US plan for taxing foreign-built vessels could lead to double taxation and increased consumer costs, experts warn.
A Trump administration plan to impose a universal fee on foreign-built ships entering US ports risks double taxation and higher consumer costs, reports New York's Journal of Commerce.
The United States already levies the Harbor Maintenance Tax (HMT) on incoming vessels. Analysts warn that adding another fee would strain trade relations and raise prices for American consumers. The proposal revives ideas first floated in 1999 but fails to address longstanding flaws in the HMT.
The HMT was originally applied to both imports and exports, but the Supreme Court ruled that exports could not be taxed under the Constitution. That left importers bearing the full cost of port maintenance. The court did allow for a user fee, provided it met the Evansville Test of fairness, non-discrimination, and proportionality.
Congress never converted the HMT into a user fee, leaving exporters with cheaper access to US ports. The administration argues that foreign-built vessels should contribute to maritime infrastructure, but those ships already pay the HMT.
Transportation analyst Jay Derr stated that reforming the HMT into a proper user fee based on vessel tonnage would be more effective. Net and gross tonnage better reflect dredging and port service costs, and such a fee could meet legal requirements.
The upcoming Water Resources Development Act offers Congress a chance to modernize the HMT. Analysts say the best way to strengthen US maritime infrastructure is to reform the existing tax rather than impose new charges that risk harming trade.
