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HomeNewsArchivesTRAVEL TAX-CREDIT BILL 'INTENDED' TO INCLUDE V.I.

TRAVEL TAX-CREDIT BILL 'INTENDED' TO INCLUDE V.I.

Oct. 5, 2001 – In an effort to shore up the nation's sinking tourism industry, a bill introduced in both houses of Congress Thursday would give Americans tax credits to vacation in any of the 50 states. By understanding among those who drafted the bill, Delegate Donna Christian Christensen said Friday, it would apply to the Virgin Islands, too.
The Travel America Now Act, which has bipartisan sponsorship, would give individuals a tax credit of up to $500 and couples a credit of up to $1,000 for any non-business travel taking them more than a hundred miles from home. It would be in effect from the time the measure becomes law until the end of 2001.
The credit would apply "for all travel expenses," including air, land and water transportation, hotels, meals, entertainment, tours, agency fees and even any applicable taxes.
"The travel and tourism industry's health closely connects to the state of the overall national economy," Sen. Jon Kyl (R., Arizona), the Senate sponsor, said. The aftermath of the Sept. 11 terrorist attacks have devastated the industry "more than any other segment of the economy," he said, "and the situation will worsen until Americans resume travel."
On Friday, Matthew Latimer, a press aide to Kyl, told the Source that the bill would cover travel "only in the 50 U.S. states, not the territories."
But Christensen said that's not so.
She said she attended a Travel and Tourism Caucus meeting on Wednesday that was "a round-table meeting with representatives of the Travel Industry of America," a lobbying group that was pushing for tax-credit legislation as well as other proposals. "When they kept talking about 'the states,' I specifically asked them if this included the territories," she said. "I know that in many cases, if the language says 'the United States' or 'the 50 states,' usually the territories are included."
Christensen said she "barely got the question out when they said, 'Yes, we would never leave the territories out.' I left there feeling comfortable."
The Senate bill is co-sponsored by Sen. Zell Miller (D., Georgia). The identical House bill is sponsored by Rep. John B. Shadegg (R., Arizona) and co-sponsored by Reps. Neil Abercrombie (D., Hawaii) and Heather Wilson (R., New Mexico).
A Senate aide who was involved in the drafting of the bill and who asked not to be identified said restricting the bill's application to the 50 states was "a conscious decision in keeping with who we're trying to assist." But, this individual added, "The fact that it doesn't apply to the U.S. territories is one of these issues where, with the speed with which we were drafting it, we probably didn't hear from every single affected travel and tourism area."
On Friday, based on that information and the comment from Latimer, the Source published an earlier version of this story quoting the Capitol Hill sources as saying the territories were not included in the tax-credit legislation. Christensen said when she saw that story, she called her House colleague Abercrombie, who also represents a tourism-intensive island constituency.
"He had not been able to attend the TIA round table," she said, "but he assured me that the bill includes the territories. He actually put me on hold and checked with his legislative people, then came back and said the intention is that the territories are being included."
A call from her office to that of Shadegg brought a similar response — plus the information that "the issue also was raised in the Senate, and they were intending to address it, too," she said.
The bill would apply to travel aboard cruise ships leaving and returning to ports of "the 50 states," the Senate aide said. Most ships calling in the Virgin Islands depart from San Juan, P.R., or the east coast of Florida..
Whether and by whom the Virgin Islands is considered part of the United States became an issue in late August, when the nation's major airlines announced they were reducing the cap on travel agent commissions to $20 for domestic travel. The cap had been $50. For ticketing purposes, the airlines consider the Virgin Islands a domestic destination. In effect, the move was an incentive for travel agents across the nation to encourage clients to visit other Caribbean islands instead, since the cap on commissions for foreign travel is $100.
The Senate aide noted that the legislation could be made to encompass the Virgin Islands in either of two ways: if the language "could be somewhat up to interpretation" because of ambuity, or if changes were made in committee.
However, the aide added, "There is a feeling among many members of Congress that we need to be confining any of our preferential spending bills to the United States. We are looking to have U.S. hotels, motels and travel-related businesses profit."
According to Christensen, "Since the question is being raised" about the territories being included, "we are going to specifically state it as so." But, she added that Abercrombie "was clear that it was always the intention to include them."
The proposal, introduced in the House as H.R.3041 and in the Senate as S.1500, will be taken up by the House Ways and Means Committee and the Senate Finance Committee as part of the overall economic stimulus package being put together to address the after-effects of the terrorist attacks. If the committees do not include the proposal in the overall package, the Senate aide said, "we will offer it as an amendment."
Kyl estimates the tax-incentive plan could cost the federal government about $10 billion. The summary of the bill states that it is "to amend the Internal Revenue Code of 1986 to provide tax and other incentives to maintain a vibrant travel and tourism industry, to keep working people working, and to stimulate economic growth, and for other purposes." At the end of the day Friday, the full text of the bills had not been posted on the Library of Congress public-access web site, Thomas.
For e-mail addresses and telephone and fax numbers for members of both the House and the Senate, click here.

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