PRIA, Government Policy, Made Personal

Summary

States and local governments may not take state income taxes out of pay for a master or seaman on a vessel in foreign, coastwise, intercoastal, interstate, or noncontiguous trade, or for someone employed on a fishing or fish‑processing vessel. One exception: a seaman on a coastwise trip between ports in the same State can agree with the employer to have state tax withheld. A person covered by this rule only owes state income tax to the State and local area where they live for pay earned while doing certain ship duties. That includes pilots working in more than one State (licensed under section 7101 or by a State) and masters, officers, or crew who regularly work on a vessel that operates on navigable waters in 2 or more States.

Title 46, §11108

Shipping, Source: USLM XML via OLRC

(a)Withholding.—

Wages due or accruing to a master or seaman on a vessel in the foreign, coastwise, intercoastal, interstate, or noncontiguous trade or an individual employed on a fishing vessel or any fish processing vessel may not be withheld under the tax laws of a State or a political subdivision of a State. However, this section does not prohibit withholding wages of a seaman on a vessel in the coastwise trade between ports in the same State if the withholding is under a voluntary agreement between the seaman and the employer of the seaman.

(b)Liability.—

(1)Limitation on jurisdiction to tax.—

An individual to whom this subsection applies is not subject to the income tax laws of a State or political subdivision of a State, other than the State and political subdivision in which the individual resides, with respect to compensation for the performance of duties described in paragraph (2).

(2)Application.—

This subsection applies to an individual—

(A)engaged on a vessel to perform assigned duties in more than one State as a pilot licensed under section 7101 of this title or licensed or authorized under the laws of a State; or

(B)who performs regularly assigned duties while engaged as a master, officer, or crewman on a vessel operating on navigable waters in 2 or more States.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised sectionSource section (U.S. Code) 1110846:601 section 11108 prohibits the mandatory withholding of state or local taxes from crewmembers on certain specified vessels. It permits, however, voluntary withholding agreements.

Editorial Notes

Amendments

2010—Subsec. (b)(2)(B). Pub. L. 111–281 amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “who performs regularly-assigned duties while engaged as a master, officer, or crewman on a vessel operating on the navigable waters of more than one State.” 2000—Pub. L. 106–489 designated existing provisions as subsec. (a), inserted heading, and added subsec. (b). 1984—Pub. L. 98–364 substituted “an individual employed on a fishing vessel or any fish processing vessel” for “a fisherman employed on a fishing vessel”.

§11108 Taxes