Commercial Passenger Ships
to Pay A New Excise Tax

WASHINGTON - Many operators of commercial passenger ships and boats will soon have to file a tax return and pay a new excise tax, the Internal Revenue Service said today. The tax for the first three quarters of 1990 is due Nov. 30, 1990.

The new tax -- $3 for each passenger -- applies when passengers in the United States first embark on, or disembark from, certain commercial vessels. The tax applies if the voyage extends overnight or if passengers take part in gambling on the vessel beyond the territorial waters of the United States.

The tax was imposed by the Revenue Reconciliation Act of 1989 and became effective Jan. 1, 1990. The IRS first alerted vessel operators of the new tax in a notice in January in the Internal Revenue Bulletin.

IRS temporary regulations, published in the Federal Register on Oct. 11, 1990, provide rules for filing returns and paying the tax. Under the regulations, operators of affected commercial passenger vessels must pay the tax by Nov. 30, 1990, for the period Jan. 1 through Nov. 14, 1990. They must also file Form 720, "Quarterly Federal Excise Tax Return," covering the first three calendar quarters of 1990 by the Nov. 30, 1990, due date.

After that, they must make semi-monthly tax deposits and file a quarterly return on Form 720.

Form 720 is available free by calling the IRS toll-free forms number, 1-800-TAX-FORM (1-800-829-3676).

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