Conference abbott::cruise_travel

555.0. "Port taxes, deductable?" by XANADU::FAMULARO (A vivere la dolce vita!) Wed Mar 06 1996 11:51

The April 96 issue of Cruise Travel magazine contains a letter from a reader
concerning "port taxes."  Douglas D. Goodheart, Dallas, TX, writes; "Some
people regard these as "charges" rather than taxes.  The fact is that this 
tax is imposed by a sovereign with jurisdiction over facilities used by the
vessel during arrival, docking, and departure."  The writer goes on to state;
"...each cruise ship ought to provide passengers an itemized copy indicating 
each port called on and the tax imposed by each local government authority.  
This would be of great benefit to U.S. taxpayers who file form 1040, who may
want to either take a deduction on schedule A of the 1040 or file for a credit
against tax liability using form 1116.  (Keep in mind that a credit is worth
far more than a deduction for foreign taxes paid.)"

The magazine responded to this letter with; "We'd double-check this arrangement
with a CPA before we'd try it."

So, are there any of you folks out there with intimate knowledge of the tax
laws, or know someone who can let us cruise folks know if this
deduction/credit would be valid.  With port "taxes" running a couple hundred
dollars per cruise it'd be a nice little tax savings when we file.

 
    

    Well, good news.  According to Mr. Johnson in the Technical Division of
    the IRS (1-800-829-1040) port taxes paid to foreign governments can be 
    used as a deduction (Form 1040) or credit (Form 1116) if you are itemizing.
    You should get a breakdown from the cruise line as to which governments 
    were paid specific amounts and keep this with your records.
    
    Disclaimer: I am only relating what I was told by the IRS
    representative. I would encourage you to check with the IRS and/or your
    own tax advisor.