This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
A tax of $3 per passenger is imposed on certain ship voyages, as explained later under Taxable situations. The tax is imposed only once
for each passenger, either at the time of first embarkation or disembarkation in the United States.
The person providing the voyage (the operator of the vessel) is liable for the tax.
Voyage.
A voyage is the vessel's journey that includes the outward and homeward trips or passages. The voyage starts when
the vessel begins to load
passengers and continues until the vessel has completed at least one outward and one homeward passage. The tax may be imposed
even if a passenger does
not make both an outward and a homeward passage as long as the voyage begins or ends in the United States.
Passenger.
A passenger is an individual carried on the vessel other than the Master or a crew member or other individual engaged
in the business of the vessel
or its owners.
Example 1.
John Smith works as a guest lecturer. The cruise line hired him for the benefit of the passengers. Therefore, he is engaged
in the business of the
vessel and is not a passenger.
Example 2.
Marian Green is a travel agent. She is taking the cruise as a promotional trip to determine if she wants to offer it to her
clients. She is a
passenger.
Taxable situations.
There are two taxable situations. The first situation involves voyages on commercial passenger vessels extending over
one or more nights. A voyage
extends over one or more nights if it extends for more than 24 hours. A passenger vessel is any vessel with stateroom or berth
accommodations for more
than 16 passengers.
The second situation involves voyages on a commercial vessel transporting passengers engaged in
gambling on the vessel beyond the territorial waters of the United States. Territorial waters of the United States are
those waters within the international boundary line between the United States and any contiguous foreign country or within
3 nautical miles (3.45
statute miles) from low tide on the coastline. If passengers participate as players in any policy game or other lottery, or
any other game of chance
for money or other thing of value that the owner or operator of the vessel (or their employee, agent, or franchisee) conducts,
sponsors, or operates,
the voyage is subject to the ship passenger tax. The tax applies regardless of the duration of the voyage. A casual, friendly
game of chance with
other passengers that is not conducted, sponsored, or operated by the owner or operator is not gambling for determining if
the voyage is subject to
the ship passenger tax.
Exemptions.
The tax does not apply when a vessel is on a voyage of less than 12 hours between 2 points in the United States or
if a vessel is owned or operated
by a state or local government.
