A bill to amend the Internal Revenue Code of 1986 to provide that income attributable to certain passenger cruise voyages beginning or ending in the United States shall be treated as effectively connected with the conduct of a trade or business within the United States.

Bill: 113-s-1449
Sponsor: full_name: Sen. Rockefeller, John D., IV [D-WV]
Introduced: 2013-08-01
Policy area: Taxation
Subjects: Income tax exclusion

Income tax rates

International law and treaties

Marine and inland water transportation

Taxation of foreign income

Travel and tourism
Latest action: action_date: 2013-08-01
text: Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S6222-6223)

Summaries:
action_date: 2013-08-01
action_desc: Introduced in Senate
text: <p>Amends the Internal Revenue Code to treat United States cruise industry income as effectively connected with the conduct of a trade or business within the United States (thus subjecting such income to U.S. income taxation). Defines &quot;United States cruise industry income&quot; as income attributable to a voyage of a commercial passenger cruise vessel (a passenger vessel having berth or stateroom accommodations for at least 250 passengers) that extends over 1 or more nights and during which passengers embark or disembark the vessel in the United States. Prohibits any tax exemption or reduced tax rate under any U.S. treaty with respect to United States cruise industry income. </p>

tv_txt: II 113th CONGRESS 1st Session S. 1449 IN THE SENATE OF THE UNITED STATES August 1, 2013 Mr. Rockefeller introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide that income attributable to certain passenger cruise voyages beginning or ending in the United States shall be treated as effectively connected with the conduct of a trade or business within the United States.

1. Taxation of United States cruise industry income of nonresident aliens and foreign corporations (a) United States Cruise industry income treated as effectively connected to the conduct of a trade or business within the United States (1) Income from sources without the United States (A) In general Paragraph (4) of section 864(c) of the Internal Revenue Code of 1986 is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph: (D) United States cruise industry income (i) In general United States cruise industry income shall be treated as effectively connected with the conduct of a trade or business within the United States. (ii) United States cruise industry income For purposes of this subparagraph, the term United States cruise industry income means income attributable to any covered passenger cruise (as defined in paragraph (8)), including income directly or indirectly attributable to the carriage of passengers and any on-board or off-board activities incidental to such covered passenger cruise. . (B) Covered passenger cruise Subsection (c) of section 864 of such Code is amended by adding at the end the following new paragraph: (8) Covered passenger cruise For purposes of paragraph (4)(C)— (A) Definition (i) In general The term covered passenger cruise means a voyage of a commercial passenger cruise vessel— (I) that extends over 1 or more nights, and (II) during which passengers embark or disembark the vessel in the United States. (ii) Exceptions for certain voyages Such term shall not include any voyage— (I) on any vessel owned or operated by the United States, a State, or any subdivision thereof, (II) which occurs exclusively on the inland waterways of the United States, or (III) in which a vessel in the usual course of employment proceeds, without an intervening foreign port of call from one port or place in the United States to the same port or place or to another port or place in the United States. (B) Passenger cruise vessel For purposes of subparagraph (A)— (i) In general The term passenger cruise vessel means any passenger vessel having berth or stateroom accommodations for at least 250 passengers. (ii) Exceptions Such term shall not include any ferry, recreational vessel, sailing school vessel, small passenger vessel, offshore supply vessel, or any other vessel determined under regulations by the Secretary to be excluded from the application of this part. (iii) Definitions Any term used in this section which is used in chapter 21 of title 46, United States Code, shall have the meaning given such term under section 2101 of such title. . (C) Conforming amendment Subparagraph (A) of section 864(c)(4) of such Code is amended by striking subparagraphs (B) and (C) and inserting subparagraphs (B), (C), and (D) . (2) Income from sources within the United States Paragraph (4) of section 887(b) of such Code is amended by adding at the end the following flush sentence: The preceding sentence shall not apply to with respect to any United States source gross transportation income which is United States cruise industry income (as defined in section 864(c)(4)(C)(ii)). . (b) Repeal of exemption from gross income for certain taxpayers (1) Nonresident aliens Paragraph (1) of section 872(b) of the Internal Revenue Code of 1986 is amended by inserting (other than United States cruise industry income (as defined in section 864(c)(4)(C))) after or ships . (2) Foreign corporations Paragraph (1) of section 883(a) of such Code is amended by inserting (other than United States cruise industry income (as defined in section 864(c)(4)(C))) after or ships . (c) Income tax treaties Section 894 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (d) Special rule for United States cruise industry income Notwithstanding subsection (a), no tax exemption or reduced tax rate shall be permitted under any treaty of the United States with respect to United States cruise industry income (as defined in section 864(c)(4)(C)). . (d) Effective date The amendments made by this section shall apply to income attributable to voyages made after the date of the enactment of this Act.