Ports: maintenance tax in the United States
In order to offset the costs of port maintenance, and especially dredging activities, the harbor maintenance tax (HMT) continues to be levied in certain U.S. ports on the loading or unloading of cargo from commercial vessels, according to information from the World Trade Organization (WTO).
The HMT does not apply to air cargo.
The rate remains 0.125% of the value of goods and applies to imports, domestic shipments, free zone admissions, and passengers.
Some exemptions apply, for example to bunker fuel, fish catches, aquatic animals and cargo under customs control.
In fiscal year 2021, HMT collections amounted to $1.56 billion, mostly (88%) derived from imports.
For reference: in fiscal year 2020, collections were slightly lower ($1.31 billion, 85% of which were from imports).
In fiscal 2019, the collection was $1.55 billion, of which 82% came from imports.
HMT collections are deposited into the Harbor Maintenance Trust Fund (HMTF), whose surplus has increased in recent years as imports have increased at a faster rate than expenditures.
During the last quadrennium, the U.S. Congress considered the possible expansion of the uses to which the HMTF can be put to better match its revenues.
Recent legislative initiatives by Congress have resulted in changes to the HMTF.
Specifically, the Coronavirus Assistance, Relief, and Economic Protection Act (CARES Act) and the Water Resources Development Act of 2020 include provisions intended to better manage spending for its intended purposes.
The CARES Act (P.L. 116-136) removed the cap on discretionary funding by Congress up to the amount of revenues received by the HMTF during the previous fiscal year, allowing prior revenues to be spent for intended purposes the following year.
This provision became effective January 1, 2021.
The Water Resources Development Act of 2020, included (Division AA) in the Omnibus Consolidated Omnibus Appropriations Act, 2021 (P.L. 116-260), amended this provision to expand HMTF spending.
First, discretionary appropriations for the Corps of Engineers are set at an amount equal to HMT deposits in the fiscal year for the two years preceding the fiscal year for which the appropriation is made, plus a fixed amount varying on a sliding scale between $500 million in 2021 and $1.5 billion in 2030.
Second, additional spending ($5 million) was authorized from the HMTF for other activities at certain emerging ports, and eligible expenditures for certain “donor ports” and “energy transfer ports” were expanded.
The utility of these changes is that more funds will go to projects developed at the largest and busiest ports.