WASHINGTON, D.C. — Chairman John D. (Jay) Rockefeller IV today introduced legislation today to close a tax loophole, currently exploited by the cruise industry, that has given cruise lines the ability to avoid paying U.S. income tax. For the past seven years, Carnival and Royal Caribbean – which represent 71 percent of the global cruise industry – paid an effective worldwide tax rate of just 1.3 percent on more than $17 billion in profits. Because this figure includes foreign taxes, the cruise industry’s effective U.S. tax rate is actually much lower than 1.3 percent. Rockefeller’s legislation would eliminate this outrageous exemption by requiring cruise lines to pay their fair share of taxes and support the federal resources on which they heavily rely.

“The cruise industry can’t operate for free here in the US. It costs money to send the Coast Guard to tow their drifting ships and it costs money to maintain the ports they use. Cruise lines need to start paying their fair share of taxes and stop expecting everyone else to foot the bill,” said Rockefeller.

Rockefeller also introduced legislation that would require cruise lines to begin paying tax levels that most other transportation industries already pay. The tax payments help cover costs of building and maintaining the nation’s infrastructure. Similar to the passenger taxes in the aviation industry or gas tax for motor vehicles, Rockefeller’s bill requires cruise lines to pay a five percent excise tax on the income they generate from using U.S. ports to start and finish voyages.

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