S.549 - Maritime Fuel Tax Parity Act (119th Congress)
Summary
The Maritime Fuel Tax Parity Act aims to amend the Internal Revenue Code of 1986, specifically Section 4041(g), to extend an excise tax exemption on alternative motorboat fuels. This exemption would apply to vessels engaged in trade between Atlantic and Pacific ports of the United States, including territories and possessions. The amendment is set to take effect for fuel sold or used after December 31, 2025.
Expected Effects
The Act will likely reduce the tax burden on certain maritime businesses operating along single coasts, potentially lowering their operational costs. This could lead to increased competitiveness and investment in these businesses. The change could also incentivize the use of alternative fuels in the maritime sector.
Potential Benefits
- Reduced operational costs: Lower fuel taxes directly decrease expenses for eligible vessels.
- Increased competitiveness: Tax parity with other vessels may allow affected businesses to compete more effectively.
- Incentivizes alternative fuel use: The exemption could encourage the adoption of cleaner fuel options.
- Economic stimulus: Savings could be reinvested into businesses, potentially creating jobs.
- Simplified tax code: Clarifying tax exemptions can reduce administrative burdens.
Most Benefited Areas:
Potential Disadvantages
- Potential revenue loss: The government may experience a slight decrease in tax revenue from fuel sales.
- Complexity in implementation: Defining and verifying eligibility for the exemption could pose challenges.
- Limited scope: The benefit is restricted to vessels operating between specific ports, excluding others.
- Risk of unintended consequences: The tax break may disproportionately benefit larger companies.
- Potential for abuse: There is a possibility that companies may try to exploit the tax break.
Constitutional Alignment
The bill appears to align with the Commerce Clause (Article I, Section 8, Clause 3) of the U.S. Constitution, which grants Congress the power to regulate commerce among the several states. By adjusting tax regulations affecting maritime trade between ports, the bill exercises this power. The bill does not appear to infringe on any individual rights or freedoms protected by the Bill of Rights.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).