Proposed Senate Tax Bill Could Hurt Cruise Industry
Cruise Line & Cruise Ship Patrick Clarke November 13, 2017

A provision in the Senate's recently introduced tax reform bill could prove troublesome for the cruise industry.
The proposed legislation would create a new category of income known as "passenger cruise gross income," which would comprise all proceeds from the operation of a commercial ship on a covered voyage.
A covered voyage is defined as a sailing subject to passenger tax. Cruises embarking in the U.S. and disembarking in a foreign country with no stops in between are considered a covered voyage. The term also applies to cruises in which passengers embark in the U.S. and more than 10 percent disembark back in America.
"If you get on a cruise ship somewhere in Florida, and then you go around the Caribbean for a week, and then return to the U.S., what happens with all of the money that you and other passengers spend on that ship? Does it get taxed? Or is it just sort of in limbo, outside the reach of U.S. taxation?" asks Jamie Dupree of the Statesman.
"It’s estimated this provision would bring in $700 million over 10 years, so it’s not a big moneymaker for Uncle Sam."
In 2013, former U.S. Senator Jay Rockefeller introduced bills with a similar mission.
According to Seeking Alpha, the concerning language in the new legislation prompted cruise shares to tumble late last week.
Norwegian Cruise Line Holdings Ltd., which joined the S&P 500 Index last month, saw shares fall 2.5 percent at closing Friday while shares of Carnival Corporation and Royal Caribbean Cruises Ltd. dropped 2.3 percent and 1.9 percent, respectively.
READ MORE: New Study Reveals Cruise Industry is Booming
Despite the initial reaction, analysts are optimistic that the provision will be axed from the Senate's final draft.
Citing brokerage and investment banking firm Stifel, Seeking Alpha points out that the House tax reform bill initially included the same terms related to cruise lines but has since cut it out. Stifel expects the industry's lobbying power to achieve a similar reversal in the Senate version.
According to CNBC, President Donald Trump aims to have tax reform enacted by the end of 2017.
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