I 

112TH CONGRESS 

1ST SESSION H. R. 1267 

To amend the Internal Revenue Code of 1986 to modify the application 

of the tonnage tax on certain vessels. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 30, 2011 

Mr. HERGER (for himself, Mr. BLUMENAUER, Mr. GERLACH, and Ms. 

HIRONO) introduced the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

the application of the tonnage tax on certain vessels. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. MODIFICATION OF THE APPLICATION OF THE 

4 TONNAGE TAX ON VESSELS OPERATING IN 

5 THE DUAL UNITED STATES DOMESTIC AND 

6 FOREIGN TRADES. 

7 (a) IN GENERAL.—Subsection (f) of section 1355 of 

8 the Internal Revenue Code of 1986 (relating to definitions 

9 and special rules) is amended to read as follows: 


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1 ‘‘(f) EFFECT OF OPERATING A QUALIFYING VESSEL

2 IN THE DUAL UNITED STATES DOMESTIC AND FOREIGN

3 TRADES.—For purposes of this subchapter— 

4 ‘‘(1) an electing corporation shall be treated as 

5 continuing to use a qualifying vessel in the United 

6 States foreign trade during any period of use in the 

7 United States domestic trade, and 

8 ‘‘(2) gross income from such United States do9 mestic trade shall not be excluded under section 

10 1357(a), but shall not be taken into account for pur11 poses of section 1353(b)(1)(B) or for purposes of 

12 section 1356 in connection with the application of 

13 section 1357 or 1358.’’. 

14 (b) REGULATORY AUTHORITY FOR ALLOCATION OF

15 CREDITS, INCOME, AND DEDUCTIONS.—Section 1358 of 

16 the Internal Revenue Code of 1986 (relating to allocation 

17 of credits, income, and deductions) is amended— 

18 (1) by striking ‘‘in accordance with this sub19 section’’ in subsection (c) and inserting ‘‘to the ex20 tent provided in such regulations as may be pre21 scribed by the Secretary’’, and 

22 (2) by adding at the end the following new sub23 section: 

24 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

25 regulations consistent with the provisions of this subVerDate Mar 15 2010 23:07 Mar 31, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1267.IH H1267

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1 chapter for the purpose of allocating gross income, deduc2 tions, and credits between or among qualifying shipping 

3 activities and other activities of a taxpayer.’’. 

4 (c) CONFORMING AMENDMENTS.— 

5 (1) Section 1355(a)(4) of the Internal Revenue 

6 Code of 1986 is amended by striking ‘‘exclusively’’. 

7 (2) Section 1355(b)(1)(B) of such Code is 

8 amended by striking ‘‘as a qualifying vessel’’ and in9 serting ‘‘in the transportation of goods or pas10 sengers’’. 

11 (3) Section 1355 of such Code is amended— 

12 (A) by striking subsection (g), and 

13 (B) by redesignating subsection (h) as sub14 section (g). 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to taxable years beginning after 

17 the date of the enactment of this Act. 

Æ 


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