[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1495 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1495

To amend the Internal Revenue Code of 1986 to modify the application of 
the tonnage tax on vessels operating in the dual United States domestic 
              and foreign trades, and for other purposes.


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                   IN THE SENATE OF THE UNITED STATES

                              May 24, 2007

 Mr. Inouye (for himself and Mr. Wyden) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to modify the application of 
the tonnage tax on vessels operating in the dual United States domestic 
              and foreign trades, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MODIFICATION OF THE APPLICATION OF THE TONNAGE TAX ON 
              VESSELS OPERATING IN THE DUAL UNITED STATES DOMESTIC AND 
              FOREIGN TRADES.

    (a) In General.--Subsection (f) of section 1355 of the Internal 
Revenue Code of 1986 (relating to definitions and special rules) is 
amended to read as follows:
    ``(f) Effect of Operating a Qualifying Vessel in the Dual United 
States Domestic and Foreign Trades.--For purposes of this subchapter--
            ``(1) an electing corporation shall be treated as 
        continuing to use a qualifying vessel in the United States 
        foreign trade during any period of use in the United States 
        domestic trade, and
            ``(2) gross income from such United States domestic trade 
        shall not be excluded under section 1357(a), but shall not be 
        taken into account for purposes of section 1353(b)(1)(B) or for 
        purposes of section 1356 in connection with the application of 
        section 1357 or 1358.''.
    (b) Regulatory Authority for Allocation of Credits, Income, and 
Deductions.--Section 1358 of the Internal Revenue Code of 1986 
(relating to allocation of credits, income, and deductions) is 
amended--
            (1) by striking ``in accordance with this subsection'' in 
        subsection (c) and inserting ``to the extent provided in such 
        regulations as may be prescribed by the Secretary'', and
            (2) by adding at the end the following new subsection:
    ``(d) Regulations.--The Secretary shall prescribe regulations 
consistent with the provisions of this subchapter for the purpose of 
allocating gross income, deductions, and credits between or among 
qualifying shipping activities and other activities of a taxpayer.''.
    (c) Conforming Amendments.--
            (1) Section 1355(a)(4) of the Internal Revenue Code of 1986 
        is amended by striking ``exclusively''.
            (2) Section 1355(b)(1)(B) of such Code is amended by 
        striking ``as a qualifying vessel'' and inserting ``in the 
        transportation of goods or passengers''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>