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Old August 2nd, 2013, 04:19 PM
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Default Rockefeller Drops Tax Bomb on Cruise Lines

Sen. Jay Rockefeller dropped a bomb on the cruise lines on Thursday by threatening to close certain "Tax Loopholes" that have allowed the cruise lines to get away with no paying full corporate tax every year.

Apparently, the cruise lines got a copy of the proposed bill and are looking it over. It has not been submitted to committee yet (as far as I know) - no copies of it are out. But the Miami Herald is also reporting he wants a 5% excise tax on all passengers leaving or entering the US by cruise ship.

Obviously - this could change the whole course of the cruise industry. But we don't know if it will get far before Rockefeller retires in 2014 at the end of his term That gives him (and Congress) over a year to push this through. What remains to be seen is whether other congress people will agree this is needed.

These were laws created by legislators - all the lines did was apply the laws. I think the codes in reference are here:

IRS Issues Final Regulations with respect to Reciprocal Exemption for International Shipping and Air Transportation - Carter Ledyard & Milburn LLP

IRS Issues Final Regulations with respect to Reciprocal Exemption for International Shipping and Air Transportation

(in part...)

Code Section 883: The "Reciprocal Exemption"

Income of a foreign corporation from the international operation of ships or aircraft, or the rental thereof, is exempted from U.S. taxation under Section 883 of the Internal Revenue Code of 1986, as amended (the "Code"), if an equivalent exemption is provided for U.S. corporations by the country in which the foreign corporation is organized. (The country of the ship’s or aircraft’s registration is no longer directly relevant to U.S. income taxation.)


b. Eligibility for Exemption

(i) The Foreign Country’s Reciprocal Exemption
The foreign corporation deriving international transportation income must be organized in a country that provides a reciprocal exemption to U.S. corporations. A foreign country is considered to provide a reciprocal exemption for purposes of Section 883 if (1) it does not impose an income tax in general, (2) it provides an exemption by domestic law, or (3) the United States and such foreign country have established the exemption specifically for this purpose, through an agreement or the exchange of diplomatic notes.

In Revenue Ruling 2001-48, the Internal Revenue Service published a list of countries that have submitted documentation to the IRS establishing that they provide a reciprocal exemption. The ruling does not purport to be exclusive. Moreover, it may be out of date, and before relying on it a foreign corporation must confirm that its home country has not repealed or amended its exemption.

An exemption from U.S. income tax may also be provided pursuant to a tax treaty between the United States and the country in which a foreign corporation is organized. To claim an exemption under a tax treaty, a foreign corporation must claim treaty benefits under Section 894 of the Code, rather than Section 883.

(ii) Income by Category
To claim the reciprocal exemption, foreign corporations must break down their income into one or more categories of income and provide proof that their home country either does not impose an income tax or offers an exemption to U.S. corporations with respect to income in the same category. The following are the categories of income for which the exemption may be claimed, so long as the home country offers the reciprocal exemption in the same category for the same type of transportation, by water or air: (a) income from the carriage of cargo and passengers; (b) time or voyage (full) charter income; (c) bareboat charter income; (d) incidental bareboat charter income; (e) incidental container‑related income; (f) any other income that is incidental to the business of operating ships or aircraft; or (g) gains of the operator from the sale, exchange or other disposition of a ship, aircraft, container or related equipment or other moveable property used by that operator in international operation. Rev. Rul. 2001-48 shows each category of international transportation income that the countries on the list have exempted for U.S. corporations.
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Old August 2nd, 2013, 05:33 PM
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While I understand cruise lines should pay some taxes in the U.S. since they have been using loopholes not to, I think fair is fair.

Rockefeller has spent his whole career using insider information to buy stocks and make himself richer while figuring out ways to avoid paying his fair share of taxes. Plus he is a big supporter of the federal subsidies (that's our taxpayer's dollars) we give to big oil companies even though they make over $60billion in profit every quarter or something obscene like that! So one has to ask where his loyalties lie and what are his objectives in presenting this bill.

If they changed the law to make all these very rich Rockefellers pay their fair share and the oil companies pay their fair share, perhaps the rest of us wouldn't have to pay much at all!!

But hey, it's better to make the cruise lines pay their fair share, which will result in higher cruise fares, which means less people will be able to afford a vacation!

That's okay - we can all give up a vacation to make sure Rockefeller keeps growing his wealth and the big oil companies continue to make huge profits - seems fair to me.

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Old August 2nd, 2013, 05:43 PM
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Originally Posted by cruise planner View Post

That's okay - we can all give up a vacation to make sure Rockefeller keeps growing his wealth and the big oil companies continue to make huge profits - seems fair to me.

Of course!

The USA is run by the billionaires, so we must all sacrifice so that they can make more billions.

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Old August 3rd, 2013, 10:11 AM
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To me it seems all along that this has been personal somehow with Rockefeller. It all started with his obsession with the poop cruise. He has never even taken a cruise, so he has no idea what kind of quality vacation he will be ruining for people like his own constituents.

He seems to have something against Micky Arison. I don't know why. You know the Rockefeller foundation bought the island of St John many decades ago and made it a natural preserve. That is a good thing to do - but some reason it seems Rocky doesn't want regular people to be able to visit it since that is what cruise lines provide.
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