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HQ 230049

October 10, 2003

LIQ-15 RR:DR:CR 230049 LLB


Jeanne M. Grasso
Blank Rome, LLP
600 New Hampshire Avenue, N.W.
Washington, D.C. 20037

RE: Harbor Maintenance Fee; 26 U.S.C. § 4462; “ferry” definition; HQ 228682 (February 5, 2002).

Dear Ms. Grasso:

We have reviewed your request for a ruling, filed pursuant to 19 C.F.R. § 177.2, on behalf of your client, Detroit-Windsor Truck Ferry, Inc. Our decision follows.


The following facts have been alleged by Detroit-Windsor Truck Ferry, Inc. (hereinafter Truck Ferry). Truck Ferry operates a tug and barge that crosses the Detroit River between Windsor, Ontario and Detroit, Michigan. The passengers consist of drivers accompanying their vehicles, passengers in those vehicles, and walk-on passengers. You state that the fee for the foot passengers is $10; however, it is often not charged.

Truck Ferry submitted its inspection certificate which indicates that it was issued on February 5, 2003. The certificate indicates that the ship is operating as a passenger ship, that it is being towed or pushed by a ship, and that the vessel complies with the provisions of the Canada Shipping Act. Except for the date of issuance, the certificate appears to be identical to the January 7, 2002, certificate provided by Mr. Gregg Ward, Vice-President of Detroit-Windsor Truck Ferry, Inc., in connection with HQ 228682 (Feb. 5, 2002).

Truck Ferry also provided a fee schedule that will be discussed below.


Whether the subject barge, as it used and described herein, falls within the definition of a “commercial vessel” or “ferry” as defined by 26 U.S.C. § 4462


Initially, we note that the foregoing issue was raised in HQ 228682 (Feb. 5, 2002) which this office issued in response to an internal advice request initiated by BASF Corporation, a customer of Truck Ferry. In fact, the barge operations described in HQ 228682 were that of the current ruling requestor, Truck Ferry. Truck Ferry was not a party to the internal advice; however, we note that Truck Ferry was given the opportunity to submit documentation and did submit documentation to support BASF’s internal advice request, and Gregg Ward, Vice-President of Truck Ferry, participated in an oral discussion of the issues along with this office and BASF.

In general, harbor maintenance tax is imposed, inter alia, on importers and shippers “on any port use.” See 26 U.S.C. § 4461(a) and (c). In pertinent part 26 U.S.C. § 4462 provides:

(a) Definitions- For purposes of this subchapter— . . . (1) Port use.- . . .means-
(A)the loading of commercial cargo on, or (B) the unloading of commercial cargo from, a commercial vessel at a port. . .

(3) Commercial cargo
(A) In general
. . . “commercial cargo” means any cargo transported on a commercial vessel, including passengers transported for compensation or for hire. . . .

(4)Commercial vessel
(A) In general
The term “commercial vessel” means any vessel used— (i) in transporting the cargo by water for compensation or hire, or (ii) in transporting cargo by water in the business of the owner, lessee, or operator of the vessel. (B) Exclusion of ferries
(i) In general
The term “commercial vessel” does not include any ferry engaged primarily in the ferrying of passengers (including their vehicles) between points within the United States, or between the United States and contiguous countries.

(ii) Ferry
The term “ferry” means any vessel which arrives in the United States on a regular schedule during its operating season at intervals of at least once each business day . . .

In HQ 228682, we held that pursuant to 26 U.S.C. § 4462(a)(4)(A), Truck Ferry’s barge was a commercial vessel insofar as the barge was being used to transport a truck, which was carrying paint (cargo). In the present case, Truck Ferry asserts that it transports, among other things, commercial vehicles carrying cargo; however, it does not transport cargo for compensation, it transports vehicles for compensation; therefore, the barge is not a commercial vessel. “The first step in interpreting a statute is to examine the text of the statute.” United States v. Alvarez-Sanchez, 311 U.S. 350, 356 (1994). “Where the content of the statute is clear and unambiguous, that language must ordinarily be regarded as conclusive.” Norfolk and Western Railway, Co. v. United States, 869 F. Supp. 974, 979(Ct. Int’l Trade 1994)(internal citation and quotation omitted). “When the text of a statute is ambiguous, the statute must be interpreted to conform to the goals and purposes Congress intended the statute to address.” Norfolk and Western Railway, 869 F. Supp. at 979 (internal citation omitted). The plain language of 26 U.S.C. § 4462(a)(4)(A) defines a commercial vessel as “any vessel used --(i) in transporting cargo by water for compensation . . .” The plain language of the statute does not provide any exemption for cargo that is in a vehicle. Therefore, Truck Ferry’s barge, which transports vehicles carrying cargo, is a commercial vessel.

Pursuant to 26 U.S.C. § 4462(a)(4)(B)(ii) a ferry is “any vessel which arrives in the United States on a regular schedule during its operating season at intervals of at least once each business day.” (emphasis added). Insofar as the barge schedule we pulled from Truck Ferry’s website indicates that the barge makes five daily trips across the Detroit River, the definition of ferry has also been met.

Truck Ferry also argues, as BASF did in HQ 228682, that the subject barge falls within the definition of ferry under, 19 U.S.C. § 58c and the regulations promulgated thereto, which provide for payment of fees to Customs (also known as the “user fee” statute). See 19 U.S.C. § 58c(c)(1); 19 C.F.R. § 24.22(a)(4)(defining ferry as “any vessel which is being used to provide transportation only between places that are no more than 300 miles apart and which is being used to transport only:(i) Passengers, and/or (ii) Vehicles, or railroad cars, which are being used, or have been used, in transporting passengers or goods”). First, whether the subject barge falls within the foregoing ferry definition under the user fee statute is irrelevant to whether the barge is a ferry for purposes of the HMF. Had Congress intended that the ferry definition in § 58c were controlling, it would not have drafted a different ferry definition the HMF statute. Second, the legislative history of the user fee statute recognized that by defining the term ferry and continuing the exemption, it would subject the trucks and railcars to those fees. Hence, even if the barge fell under the ferry exemption, the truck would still have to pay the user fee. See 1986 U.S.C.C.A.N. 4943 (1986) Truck Ferry also relies on HQ 108555 (September 25, 1986) for the definition of ferry. HQ 108555 involved whether the barge in that case was a ferry within the exemption of the user fee statute, 19 U.S.C. § 58c. The term ferry was defined close to a month after HQ 108555 was issued; therefore, HQ 108555 could not be interpretive of a term that did not exist a the time of its issuance. See Tax Reform Act of 1986, Pub. L. No. 99-514, 100 Stat. 2085 (1986). However, since a commercial vessel may be any vessel used in the transportation of cargo for compensation, a ferry may fall within the definition of commercial vessel unless it is the type of ferry that is “engaged primarily in the ferrying of passengers (including their vehicles) . . .” 26 U.S.C. § 4462(a)(4)(B)(i)(emphasis added). Since the statute does not define the term “vehicles”or the term “passengers,” the truck that boards the barge could arguably be a “vehicle” and the truck driver a “passenger” within the plain meaning of the statute.

Nevertheless, the word “primarily” appears to be a critical factor in determining how the ferry is engaged. Truck Ferry asserts several definitions for the words “passenger” Truck Ferry insists on several occasions throughout its ruling request that in HQ 228682, this office “merely accepted, without explanation, Regulatory Audit’s unsupported and ad hoc position that ‘ the truck drivers are not passengers of the barge.”. Truck Ferry neglects to observe that first, the paragraph that it references merely sets forth the arguments presented by BASF and those asserted by Regulatory Audit. Second, had this office made a legal conclusion as to the definition of the word “passenger”, it would have been set forth in the holding in HQ 228682. and “vehicle” that this office should employ in interpreting the statute. If all ferries were to be exempt from the Act, by virtue that they transport “passengers” and “vehicles” the use of the qualification "primarily" when coupled with the definition of “ferry” in paragraph (a)(4)(B)(ii), is incongruous. The use of the qualifying language shows that Congress did not intend for all ferries to be exempt. Establishing status as a ferry under paragraph (a)(4)(B)(ii) does not, by itself, establish entitlement to the exemption. Further, based on the plain reading of the statute, whether a vessel qualifies as a commercial vessel or a ferry depends on how the vessel is “used” or “engaged”. See 26 U.S.C. § 4462(a)(4)(A) & (B)(i); see also, 1986 U.S.S.C.A.N. 6639, 6685(stating that “the term “commercial vessel” means a vessel engaged in waterborne commerce, but does not mean any vessel engaged primarily in the short-haul ferrying of passengers or vehicles . . .”)(emphasis added). The HMT is on the importer of the cargo, not the vessel operator. See 26 U.S.C. § 4461(a) & (c), infra; see also, 1986 U.S.C.C.A.N. 6639, 6646-47 (stating that “[t]he tax in title 8 is not on the harbor, nor is it on the vessel’s operator or owner. The tax is set on the value of the cargo, and is to be paid by the owner of the cargo, or his agent.”).

In HQ 228682, we held that Truck Ferry’s barge was not primarily engaged in the ferrying of passengers (and their vehicles) because the evidence, in the form of advertising material, demonstrated that there was no provision for foot passengers (thus lacking an intention to ferry such passengers) and was directed at soliciting business of transport companies carrying merchandise in tractor-trailers. Truck Ferry has submitted a document titled “Traffic Statistics to Detroit, USA.” and a page from its website titled “Fee Schedule.”

With regard to foot passengers, Truck Ferry asserts that it charges $10.00 a person, but it rarely charges the fee. Assertions made by counsel are not evidence. See Bar Bea Truck Leasing Co., Inc. V. United States, 5 CIT 124, 126 (1983). Even if we were to accept the foregoing statement, being that Truck Ferry does not collect payment from foot passengers, evidences that they do not have a large percentage of foot passengers. In addition, there is no foot passenger rate on Truck Ferry’s fee schedule.

Based on our review of the fee schedule submitted by Truck Ferry as well as the “On-Site Customs”; “Avoid Border Delays”; “Oversize and Overweight” and “Compliance-Hazardous Materials” links on Truck Ferry’s website, Truck Ferry still continues to solicit companies carrying merchandise in tractor-trailers. For instance, although there is a fee provision for “Non-Commercial Vehicles (including driver and passengers)”; the reservation link requires a company name as opposed to an individual name. The reservation link also states “[p]lease have your driver present valid ID, cargo weight and complete hazard materials information at time of crossing.” On the “Fee Schedule” and “Avoid Border Delays” webpage links states that “the Detroit-Windsor Truck Ferry is a practical and cost-effective alternative for time sensitive general freight moving between Detroit and Windsor.” In addition, Truck Ferry’s own statistics show that between November 1, 2002 and June 20, 2003, 66% of the vehicles carried by Truck Ferry contained cargo. Finally, it is incongruous that a ferry which is alleged to be engaged in the ferrying of passengers (including their vehicles) does not collect a fee from its passengers.

Based on our review, the evidence, namely Truck Ferry’s website solicitations and its own traffic statistics, does not support a conclusion that the vessel is a ferry engaged primarily in the ferrying of passengers (including their vehicles). Insofar as the subject barge is used to transport cargo for compensation and is not primarily engaged in ferrying of passengers and their vehicles, it does not fall within the ferry exception of 26 U.S.C. § 4462(a)(4)(B), and therefore, the cargo carried thereon, is subject to the HMF.


The barge indicated herein is a commercial vessel and therefore, cargo carried thereon, is subject to the HMF.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with this decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.


Myles Harmon, Director

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