U.S. mariners working in international commerce generally pay full U.S. income tax on their wages, while foreign mariners frequently receive favorable tax treatment from their home countries.
The American Mariner Tax Fairness Act would give U.S. mariners a tax break long enjoyed by Americans working overseas and foreign-flag seafarers.
Bipartisanlegislation driven by the M.E.B.A. and the American Maritime Congress wouldgive U.S. mariners a tax break long enjoyed by Americans working overseas andforeign-flag seafarers. TheAmerican Mariner Tax Fairness Act (H.R. 10153), was introduced this week byReps. Brian Fitzpatrick (R-PA.), Tom Suozzi (D-N.Y.), Nicole Malliotakis(R-N.Y.) and Brendan Boyle (D-PA.). The bill would extend the federal foreignearned income exclusion to qualifying U.S. merchant mariners working aboardU.S.-flag vessels in international trade.For mariners who spend months away from home operating ships that carryAmerica’s foreign commerce, the legislation could mean significant tax savingswhile making a career at sea more financially attractive. The bill would applyto qualifying U.S. citizen mariners who spend at least 90 days during a12-month period working aboard qualifying U.S.-flag vessels engaged in foreigntrade. The exclusion would apply to income earned during qualifying periods ofservice.
For M.E.B.A. members and other American mariners, thelegislation addresses a longstanding inequity: U.S. mariners working ininternational commerce generally pay full U.S. income tax on their wages, whileforeign mariners frequently receive favorable tax treatment from their homecountries. At the same time, Americans working in many other professionsoverseas can already take advantage of the foreign earned income exclusion.
M.E.B.A. President Adam Vokac called the disparity anational security vulnerability and said the bill would finally bring marinersinto line with other Americans working abroad. “Recruiting and retainingmariners is one of the most pressing national security vulnerabilities facingthe maritime industry today, and this bill addresses it head-on,” Vokac said.“The American Mariner Tax Fairness Act simply extends the same treatmentalready given to other Americans working abroad to mariners sailing ininternational waters, bringing us in line with how every other major maritimenation treats its seafarers.” President Vokac credited Reps. Fitzpatrick andSuozzi for their bipartisan leadership and said the legislation advances a keyobjective of a strong U.S. maritime policy.
The American Maritime Congress, which has worked intandem with the M.E.B.A. in advancing the legislation, also praised the bill. AMCExecutive Director Elizabeth O’Connor said, “This legislation corrects a longstandinginequity in how the tax code treats the men and women who crew America’soceangoing merchant fleet. U.S. merchant mariners spend months at a time awayfrom their homes and families, sailing the vessels that move our commerce andthat our military rely on to project and sustain forces overseas. MakingU.S.-flag careers more financially competitive is not just a benefit to AMC’smembers - it is a national security necessity. Our sealift capability dependson having enough credentialed American mariners ready to crew these ships whenthe nation calls on them, and this bill is a meaningful step toward keepingthat workforce strong.”
The legislation is also gaining broad support throughoutorganized labor and the maritime industry. The Transportation TradesDepartment, AFL-CIO (TTD) strongly endorsed H.R. 10153, noting that Americanmariners currently “pay the full weight of U.S. income tax on wages earned ininternational commerce,” while many foreign counterparts sail largely tax-free.TTD President Greg Regan said the bill would close that gap and put U.S.mariners on a more equal footing with both foreign seafarers and otherAmericans working abroad. TTD also pointed to an important development: thelegislation directly addresses a recommendation contained in theAdministration’s recently released Maritime Action Plan, which calls forallowing income earned by U.S. merchant mariners aboard U.S.-flag vessels oninternational routes to be excluded from gross income.
USA Maritime likewise endorsed the bill, emphasizing theimportance of putting American mariners on a level playing field with theirforeign competition. “This bill will help provide greater parity by providingAmerican mariners with similar tax treatment as mariners on foreign flagvessels have been enjoying for decades, if not longer,” USA Maritime ChairBrian Schoeneman said.
With the United States facing a shortage ofqualified mariners and working to rebuild its commercial fleet, makingU.S.-flag maritime careers more attractive is critical. A fairer tax system canhelp keep experienced mariners in the industry while encouraging a newgeneration of Americans to choose a career at sea. For M.E.B.A. and otherU.S.-flag shipping interests, the bottom line is clear: If America wantsAmerican ships, American cargo and a stronger maritime industry, it must makesure American mariners have compelling reasons to stay in the profession andnew mariners have greater incentives to join it. The American Mariner TaxFairness Act would help make that possible by giving U.S. mariners a morecompetitive tax treatment and strengthening the economic case for choosing acareer at sea.
Though the Congressional session is windingto a close as the elections approach, U.S. shipping interests are looking for H.R.10153’s potential inclusion in an end of the year spending bill or taxlegislation, following the November elections.