Tonnage tax provision proposed for American Jobs Creation Act

Tonnage tax provision proposed for American Jobs Creation Act    A U.S. lawmaker with ties to New Orleans port area asked the chairman of the House Ways and Means Committee Tuesday to include a tonnage tax provision in the new version of the American Job Creation Act.
   The committee, overseen by Rep. Bill Thomas, R- Calif., is expected to take up the legislation today.
   Supporters of the tonnage tax say U.S.-flag vessel operators under the current law are subject to significantly higher taxes than foreign-flag companies, thus squeezing their profit margins and ability to compete efficiently with overseas-based operators.
   The proposed tonnage tax provision would authorize a U.S. tax regime based on the “tonnage,” or weight in tons, of a taxpayer’s U.S.-flag fleet. The Jount Tax Committee has scored proposed cost of the legislation over a 10-year period at only $68 million.
   “It would be very difficult for me to vote against the [American Job Creation Act] bill if it included the tonnage tax provision,” said Rep. William J. Jefferson, D-La., who proposed the provision. “This provision would not only help maintain the shipping industry’s international trade activities but it would improve its economic conditions, ultimately providing more jobs for American, and more specifically Louisiana, mariners.”
   Jefferson added: “This tax regime is necessary to the growth and success of our U.S.-flag commercial fleet in the international trade business. Given the inexpensive nature of the proposal and the critical economic benefits it provides for our shipping industry, I can see no reason this legislation could be ignored.”
   U.S.-flag vessel operators and maritime unions praised Jefferson’s efforts.
   “Maritime management and labor are in complete agreement that the tonnage tax will be critically important to the rebirth of the great American flag shipping tradition,” said Capt. Timothy Brown, president of the International Organization of Masters, Mates & Pilots.