Today, Congressman William J. Jefferson announced that his proposed "tonnage tax" provision and three other provisions that will benefit Louisiana were included in the final version of a corporate tax bill that the House approved today. The U.S. House of Representatives approved the final conference report of the House and Senate bills designed to adjust corporate taxes.
The "tonnage tax" provision is touted as benefitting United States-flag vessel owners such as Central Gulf Lines, Inc., Waterman Steamship Corporation
, and other American maritime companies headquartered in New Orleans, Louisiana, engaging in international trade by preserving and enhancing maritime employment opportunities for United States seafarers from Louisiana and elsewhere around the country.
It allows companies to elect a U.S. tax regime based on the "tonnage" - or weight in tons - of a taxpayer's U.S.-flag fleet, in lieu of regular income tax, making those companies more viable in the global market.
"The tonnage tax provision
will bring hundreds of jobs to our Port for Louisiana's mariners and possibly thousands of mariners all the way up the Mississippi River by boosting the lagging U.S. flag vessel fleet
," Jefferson said. "I am pleased to have brought such meaningful legislation through the committee, to the House floor and soon, to the President's desk."
The corporate tax bill also includes a provision that defers U.S. tax on the foreign shipping income of a controlled foreign corporation (CFC) that is affiliated with a U.S. company. This provision, like the tonnage tax provision, further enhances the U.S. companies' competitiveness in the global shipping market.
The bill includes a provision that eliminates the 4.3% excise tax on diesel fuel imposed
on the towing and railroad industries. This tax placed an un-equitable and unnecessary economic burden on critical components of the nation's transportation industry. Its elimination preserves equal tax treatment for competing modes of transportation and enhances opportunities for the towing and railroad services to provide cost effective services to their customers.
Finally, the bill includes a provision that will help shipyards, like Avondale, receive equal tax treatment by reducing the cash flow burden imposed on naval shipbuilders. Jefferson led efforts to ensure that naval shipyards receive the same tax treatment as commercial shipbuilders to preserve the financial stability and competitiveness of the naval shipbuilding industry.
Maritime and shipping officials are praising Jefferson's work in fighting for Louisiana's interests. "I have been in the shipping industry for my entire career," said Erik Johnsen, Chairman of New Orleans-based International Shipholding Corporation
. "During that entire time, there has never been a more significant piece of legislation for U.S. flag shipping than the tonnage tax."
"It is my mission to fight for Louisiana's jobs," Jefferson said. "This bi-partisan tax reform measure will make our two biggest New Orleans industries - shipping and trade - more competitive. With this legislation, we are making these sectors stronger and better able to grow and create jobs in Louisiana."