Port Authority Criticizes Proposed Shipping and Aircraft Regs

[1] I am writing, on behalf of the Virginia Port Authority, to express our concern with the proposed plan by the Internal Revenue Service to, contrary to long standing practice, subject ocean carriers owned by foreign corporations to United States taxes for income derived from the U.S. inland legs of through transport services and for other inland services.

[2] The proposed rule would govern the scope of the tax exemption pursuant to section 883 of the Internal Revenue Code for income derived from the international operation of vessels and aircraft. This change would severely impact foreign-owned container carriers and the efficiencies that have been gained through the sharing of vessels. As you know, other countries provide U.S. owned lines with reciprocal tax exemptions through treaties or specific laws.

[3] Additional tax burdens on our container customers will inevitably impact our port and virtually all other United States deep-draft container ports resulting in a negative impact on the port revenues that support this nation's transportation infrastructure and literally hundreds of thousands of U.S. jobs. Therefore, we respectfully urge that this matter be carefully reconsidered.

Thank you.

Very truly yours,