Technical Information Release

Technical Information Release TIR 04-2: Ferry Service Embarkation Fees

Date: 02/05/2004
Organization: Massachusetts Department of Revenue
Referenced Sources: Massachusetts General Laws

Sales and Use Tax

I. Introduction

Section 11 of Chapter 55 of the Acts of 2003 (the "Act") allows any city or town within the counties of Barnstable, Nantucket, Bristol, and the County of Dukes County to impose an embarkation fee of fifty cents ($.50) per passenger per departing trip upon all passenger ferry (boat) trips. After a majority of voters in a designated city or town ("port town") approve the fee imposition the fee shall take effect on January 1 st of the following calendar year. The Act requires that the fee be collected from each passenger departing from a port town and that the fees collected be remitted to the Commissioner along with related records. The Commissioner is required by the Act to disburse the fees remitted to him, along with any related proceeds, back to the port towns according to a statutory formula. This Technical Information Release explains the statutory authority for imposing the fee, how the Act is administered by the Commissioner, and what is required of the port towns and affected ferry operators ("ferry operators").

II. Statutory Authority

The Act allows a port town to impose an embarkation fee "upon all passenger ferry trips, excluding those ferry boats that are licensed to transport not more than 100 passengers, originating from a port located within such city or town, at a rate of $.50 per passenger per departing trip." The Act requires the ferry operator to "[p]ay the embarkation fee imposed under this section to the commissioner of revenue on a quarterly basis. The operator shall keep a record of the number of passengers subject to the embarkation fee departing from each port that has accepted this section, and forward the records to the commissioner of revenue at the time of payment of the fee in order to determine how the money is to be distributed to each participating port municipality." The Act provides that "[c]ommuter excursion fares and school-related rates shall be exempt from the embarkation fee. For the purposes of this section, 'commuter fare' shall mean any fare paid for through the purchase of a book of multiple tickets or through the Steamship Authority's Islands Preferred Excursion Program."

III. Administration

The Commissioner will administer the Act according to the provisions of General Laws chapter 62C. In particular, the Commissioner may audit the records of ferry operators to verify that the correct amount of embarkation fees has been collected.

IV. Requirements Upon Port Towns Imposing the Fee

Each port town, upon approval of the voters, must notify each ferry operator embarking from its port that the embarkation fee is imposed. The notice shall explain the requirement to collect the fee from every passenger not otherwise exempt from the fee ("fee passenger") and to remit the fees collected to the Commissioner. Simultaneously, the port town must notify the Commissioner of the imposition of the fee and provide the Commissioner with names and addresses of all ferry operators embarking from its port. Thereafter the port town must likewise notify any ferry operator that becomes licensed to embark from its port(s) with corresponding notification to the Commissioner.

V. Requirements Upon Ferry Operators

  1. Incidence of the embarkation fee. The embarkation fee is $.50 per fee passenger per departing trip. The embarkation fee is collected when the ferry operator agrees to carry a fee passenger on a trip departing from a port town, typically when a ticket for the ferry trip is purchased. The embarkation fee is a liability of the ferry operator owing to the Commonwealth of Massachusetts each time a fee passenger purchases a ticket. That liability is satisfied upon the ferry operator's remittance of the fees collected to the Commonwealth on a quarterly basis as explained below. The embarkation fee cannot be collected prior to January 1 st of the year it is first imposed.

    Example: Town voters, in a municipal election held November 12 th, approve the imposition of the embarkation fee. Imposition of the embarkation fee will begin on January 1 st of the following year. A passenger, on December 21 st, purchases a ticket to depart from the town's port on January 3 rd. The ferry operator will not collect the embarkation fee.

  2. Record keeping. The ferry operator is required to keep a contemporaneous record with regard to each port town from which it has departures. These records must include at least the information from which the operator will have prepared its quarterly return and must include the following information:
  • The total number of fee passengers departing from each port town.
  • The number of such passengers using tickets purchased as commuter fares.
  • The number of such passengers using tickets purchased at school-related rates.
  • The total embarkation fees collected.

Ferry operators must retain these records in accordance with Regulation 830 CMR 62C.25.1: Record Retention.

  1. Embarkation fees held by the ferry operator. The ferry operator shall hold all embarkation fees collected until required to make payment to the Commissioner. Any embarkation fees collected in excess of actual departures (from advance ticket sales or abandoned tickets) must be paid over to the Commissioner no later than the date for filing the quarterly return.
  2. Payment and reporting requirement. A report of the embarkation fees collected by the ferry operator must be made, on a form approved by the Commissioner (the "return"), for each calendar quarter and must be accompanied by any required payment and by such records of the operator which will assist the Commissioner in determining the manner in which collected fees are to be distributed to each participating port municipality. The return must be filed with the Commissioner by the last day of the month following the close of each calendar quarter. Interest will be added to any late payment pursuant to General Laws chapter 62C, section 32.

VI. Distributions to Port Cities and Towns

All sums received by the Commissioner as embarkation fees, or as penalties or forfeitures, interest, costs of suit and fines, shall be certified quarterly by the Commissioner on a port-by-port basis to each city and town that has approved the imposition of the fee, to the Office of the State Comptroller and to the Office of the State Treasurer. Such certification shall be made in accordance with the formula established under section 129 of Chapter 55 of the Acts of 2003 and said fees shall be transmitted by the Commissioner at least quarterly for disbursement by the State Treasurer back to the port city or town.

VII. Enforcement

Any ferry operator failing to comply with the requirements of the Act as explained in this Release will be subject to the penalties and fines explained in G.L. chapter 62C, including, but not limited to, the penalties imposed by section 33 for filing returns late and for making payments late.

/s/ Alan LeBovidge
Alan LeBovidge
Commissioner of Revenue


February 5, 2004

TIR 04-2

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