Maritime Fuel Tax Parity Act
The Maritime Fuel Tax Parity Act, introduced in the Senate, would amend the Internal Revenue Code to extend the existing exemption from the federal excise tax on alternative motorboat fuels. Specifically, it would allow fuels sold for use by certain domestic vessels—those described in the code and that actually engage in trade between Atlantic or Pacific ports of the United States (including U.S. territories or possessions)—to be exempt from the motorboat fuel tax. In other words, it broadens tax relief to include vessels that operate along one coast (intra-coast or regional trade), not just those with broader or international routes. The change would apply to fuels sold or used after December 31, 2025. The bill is sponsored by Senator Murkowski with Senators Hirono and Sullivan listed as cosponsors.
Key Points
- 1The bill adds to the exemption from the excise tax on alternative motorboat fuels by including certain intra-coast vessels that trade between Atlantic or Pacific ports of the United States, including territories or possessions.
- 2The exemption applies to fuel sold for use or used by a vessel that is described in section 4042(c)(1) of the Internal Revenue Code.
- 3The exemption is tied to actual trade activity between U.S. Atlantic or Pacific ports (not necessarily international routes) and includes vessels operating within U.S. territories/possessions.
- 4Effective date: the amendment applies to fuels sold for use after December 31, 2025.
- 5Fiscal and policy implications: the change would reduce federal excise tax collections on qualifying fuels for these vessels and could influence the economics of using alternative motorboat fuels in domestic coastal trades.