Barge tax will rise April 1 for inland operators

Over the next few weeks, most of us will be looking for ways to pay fewer taxes to Uncle Sam as we prepare our annual tax returns.

But beginning next Wednesday, inland towing companies will pay higher taxes on diesel fuel, and they won’t be complaining.

They actually relish the increase, and lobbied hard to convince Congress to approve it.

Huh, you say? A business begging for higher taxes? What gives?

Basically, the industry is willing to pay higher fuel taxes to help finance new construction and major rehabilitation of the nation’s aging and crumbling lock-and-dam system. Much of this infrastructure is more than 50 years old and is just hanging on by a thread. Emergency closures have caused delays and shutdowns on many segments of the system.

This means that barge companies — and their customers, from energy to agriculture — endure costly delays in moving products around the country and beyond. They think that paying more taxes will lead to a more dependable inland transport system.

Under a law passed by Congress last December that was supported by the industry, the current 20-cent-a-gallon fuel tax will rise to 29 cents on April 1. The so-called barge tax hasn’t increased in about 18 years, and in the meantime the nation’s locks and dams have deteriorated due to lack of funds.

Fuel tax revenues are deposited in the Inland Waterways Trust Fund and are matched by the general fund to pay for new construction and major repairs. About 300 commercial operators pay the tax, but the industry says that the benefits extend to hydropower, municipal water supplies, recreational boating and fishing, flood control, national security and waterfront property development.

Currently the Trust Fund takes in about $84 million a year in towboat fuel taxes, and the industry expects the 9-cent increase to add $40 million more, pushing the total above $120 million. This will be a big plus for many inland projects that have been stalled or delayed, including the Kentucky and Chickamauga Locks along the Tennessee River, Locks and Dams 23 and 4 along the Monongahela River in Pennsylvania, the Inner Harbor Navigation Canal lock replacement project in New Orleans and the Navigation and Ecosystem Sustainability Program, a long-term program of navigation improvements and ecological restoration for the Upper Mississippi River.

Waterways advocates have their work cut out for them in the coming months. Congress did not anticipate passage of the tax increase so soon and didn’t prepare for the infusion of funds. Lawmakers need to appropriate the federal match for the fuel-tax revenues, and this will be a focus of the Waterways Council, the American Waterways Operators and a slew of agricultural cargo shippers, including corn, wheat and soybean growers.

They could probably use your help. Contact your state’s Congressional delegation and request their support for the appropriations. This would be a true example of taxation with representation.

About the author

Pamela Glass

Pamela Glass is the Washington, D.C., correspondent for WorkBoat. She reports on the decisions and deliberations of congressional committees and federal agencies that affect the maritime industry, including the Coast Guard, U.S. Maritime Administration and U.S. Army Corps of Engineers. Prior to coming to WorkBoat, she covered coastal, oceans and maritime industry news for 15 years for newspapers in coastal areas of Massachusetts and Michigan for Ottaway News Service, a division of the Dow Jones Company. She began her newspaper career at the New Bedford (Mass.) Standard-Times. A native of Massachusetts, she is a 1978 graduate of Wesleyan University (Conn.). She currently resides in Potomac, Md.

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