Section of Taxation Publications
  VOL. 54
NO. 1
FALL 2000
Contents | TTL Home

 Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.

The Harbor Maintenance Tax and the Constitutionality of Taxing Cruise Passengers as Commercial Cargo Under the Export Clause: Carnival Cruise Lines, Inc. v. United States

Keith E. Ranta


In Carnival Cruise Lines, Inc. v. United States, the Federal Circuit held that the Harbor Maintenance Tax (the HMT), as applied to cruise ship passengers, does not violate the Export Clause of the United States Constitution. Previously, in United States v. United States Shoe Corporation, the Supreme Court held that the HMT, as applied to goods for export, violates the Export Clause. However, the HMT is part of the Water Resources Act, which includes a severability clause. Relying on the severability clause, the Federal Circuit held that the remainder of the HMT, including the provision taxing passengers for hire or compensation, is severable from the unconstitutional provision that taxed exports. Then, based upon the purposes of the Export Clause, legislative intent, and statutory construction, the Federal Circuit held that the HMT as applied to passengers for hire does not violate the Export Clause.

Part I of this note presents background on the HMT and the Export Clause. Part III details the facts of Carnival and reviews the decisions of the Court of International Trade and the Federal Circuit. Part IV discusses the confusion among the courts which have applied the Export Clause to the HMT and presents suggestions for conclusively resolving that confusion where passengers are transported for compensation or hire.


Published by
Section of Taxation, American Bar Association
With the Assistance of
Georgetown University Law Center


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