Watch Now

Trade group rips attempt to increase HMT tax

Trade group rips attempt to increase HMT tax

   The National Customs Brokers and Forwarders Association of America on Wednesday denounced a bill that would hike the Harbor Maintenance Tax to help pay for transportation infrastructure.

   'With no cap on the total fee for any single shipment, higher value products would bear a disproportionate brunt of the increased tax,' NCBFAA President Mary Jo Muoio said in a letter to Rep. Peter DeFazio, chairman of the House Transportation and Infrastructure subcommittee on highways and transit. 'This misalignment between the fees paid and the services for which they are charged would further undermine the legitimacy of this so-called 'user fee.' '

   The formal opposition comes two months after Rep. Laura Richardson, D-Calif., introduced the MOVEMENT Act to raise an estimated $2.5 billion to $2.7 billion per year for freight-related infrastructure in and around land and seaport cities.



   The HMT is assessed on ocean imports and domestic freight moves along the coast to help pay for maintaining deep-draft navigation channels. The tax is computed at 0.125 percent of the cargo's value.

   The bill would assess a 0.4375 percent tax based on the value of goods and set up a separate goods movement account within the Harbor Maintenance Trust Fund for landside projects. Ninety percent of the money would have to be allocated to transportation improvements, 7 percent would go to mitigate the environmental impact of freight transport and 3 percent would cover cargo security needs.

   Goods originating in Canada or Mexico would be exempt from the tax, but imports that arrived at Mexican or Canadian ports and then entered the United States via the land border would be taxed at a rate of 0.3125 percent of the cargo value.

   Local payers would see a return on their investment because the bill requires 90 percent of expenditures to be made within a 40-mile radius of where it's raised and the remaining 10 percent to be spent within a 150-mile radius.

   Richardson said using the existing HMT fee structure is more equitable than implementing a separate fee on cargo containers, as other members of Congress have proposed.


   Muoio said the trust fund already enjoys a $5 billion surplus and pulls in almost $1.3 billion per year. Trade advocates complain that not enough of the money is released each year to deal with a growing backlog of dredging needs to make ports more competitive.

   The NCBFAA said it supports infrastructure investment but not on top of other cargo fees and at a time when companies are struggling with the economic downturn.

   'Now, as U.S. companies face the most serious recession of our time, these fees amount to a stifling tax on the components and materials needed to produce a finished product,' Muoio wrote. 'Adding cost upon cost to the supply chain is not a way to revive U.S. businesses and the economy.'

   She pointed out that trade at the nation's ports has dropped 30 percent to 40 percent in many locations.

   'Now is not the time for an increased tax on containers or cargo,' she said.

   The NCBFAA's news release characterizing its opposition used blunt language more normally seen in a newspaper or magazine headline. It read: 'NCBFAA President Slams Movement Act's HMT Increase.' ' Eric Kulisch

Future of Supply Chain


The greatest minds in the transportation, logistics and supply chain industries will share insights, predict future trends and showcase emerging technology the FreightWaves way–with engaging discussions, rapid-fire demos, interactive sponsor kiosks and more.