On June 25, 1999, the Miscellaneous Trade and Technical Corrections Act of 1999 (Public Law 106-36) was signed into law. The user fee provisions of the law became effective 30 days after the law was signed. The Act was designed to make miscellaneous and technical changes to various trade laws, including the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended. The amendments made several changes affecting U.S. Customs and Border Protection's administration of user fees.
These enacted changes authorized two things: (1) continuation of the $5.00 fee for those passengers aboard commercial vessels or aircraft arriving in the United States from places outside the United States other than Canada, Mexico, and the United States territories, possessions, and adjacent islands, and (2) establishment of a new fee of $1.75 per passenger arriving aboard commercial vessels from Canada, Mexico, or the United States territories, possessions, and adjacent islands. Territories and possessions of the United States include American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands. Adjacent islands, in accordance with the Immigration and Nationality Act, include St. Pierre, Miquelon, Cuba, the Dominican Republic, Haiti, Bermuda, the Bahamas, Barbados, Jamaica, the Windward and Leeward Islands, Trinidad, Martinique, and other British, French, and Netherlands territory or possessions in or bordering on the Caribbean Sea.
On October 22, 2004 the President signed the American Jobs Creation Act of 2004 (Pub. L. 108-357). Section 892 of the Act amended 19 U.S.C. 58c to renew the fees provided under COBRA, which would have otherwise expired March 1, 2005, and to allow the Secretary of the Treasury to increase such fees by an amount not to exceed 10 percent in the period beginning fiscal year 2006 through the period for which fees are authorized by law. It is noted that the law specifically mentions the Secretary of the Treasury, even though CBP is now a component of the Department of Homeland Security. Regulations concerning user fees, among other customs revenue functions, were retained by the Secretary of the Treasury pursuant to Treasury Department Order No. 100-16.
Effective April 1, 2007 the fees mentioned above are set at $5.50 and $1.93 respectively. Additional information is provided in the Background section below.
Background
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) established the Passenger User Fee at $5.00 and exempted passengers arriving from Canada, Mexico, territories and possessions of the United States, and adjacent islands from paying the fee. However, enabling legislation of the North American Free Trade Agreement (NAFTA), enacted in 1993, amended the COBRA legislation to remove the country exemptions and increased the Passenger User Fee from $5.00 to $6.50 for travel beginning the period January 1, 1994 through September 30, 1997. Effective October 1, 1997, the Passenger User Fee provision of the amended COBRA legislation expired. Once this provision expired, the $6.50 per passenger fee reverted to $5.00 for passengers arriving on or after October 1, 1997 and the exemption from payment of the Passenger User Fee was reinstated for passengers arriving from Canada, Mexico, territories and possessions of the United States, and adjacent islands.
On April 24, 2006 CBP published a Notice of Proposed Rulemaking in the Federal Register (71 FR 20922) proposing to amend the regulations in accordance with the current statutory provisions by increasing the applicable fees. On January 26, 2007 CBP published a notice of Final Rule in the Federal Register (72 FR 3730) to increase, by ten percent, the user fees assessed on certain air and sea passengers who are subject to customs inspection by U.S. Customs and Border Protection. The ten percent increase became effective April 1, 2007.
Responsibility for Collection
It is the responsibility of carriers, travel agents, tour wholesalers or other parties issuing tickets or travel documents to collect the fee from all passengers who are subject to the fee. Airline tickets should be marked in accordance with the ARC Industry Agents Handbook, SATO ticketing Handbook, or the individual carrier's procedures manual. Tickets or travel documents not reflecting payment of the fee at the time of issuance will require collection at the time of the carrier's departure from the U.S. Tickets and travel documents shall be marked to indicate that the required fee has been collected.
Responsibility for Remittance
Payment of the fees shall be made by the air or sea carrier, travel agent, tour wholesaler, or other party which issued the ticket. Unless the carrier has a contract with the collecting party indicating that the carrier will remit the fees, the party that collects the fee from the passenger is responsible for sending the fee to U.S. Customs and Border Protection.
Remittance Procedures
*Payments are due in U.S. dollars no later than 31 days after the close of the calendar quarter in which the fees are collected.
January, February, March - Due May 1
April, May, June - Due July 31
July, August, September - Due October 31
October, November, December - Due January 31
Checks or money orders drawn on a U.S. Bank in U.S. funds (no express mail/courier delivery --use regular Postal Service mail) should be made payable to U.S. Customs and Border Protection and sent to:
U.S. Customs and Border Protection
Revenue Division - User Fee Team
6650 Telecom Drive
Indianapolis, IN 46278
(Payment Methods)
Remittance of fees collected shall be accompanied by a statement which includes:
- Name and address of the air/sea carrier or tour wholesaler remitting payment;
- Taxpayer ID number (EIN);
- Calendar quarter covered;
- Number of tickets for which fees were collected;
- Amount collected and remitted;
- A statement that the fee is a commercial airline/vessel passenger fee and a breakdown of the vessel fees being paid, i.e., $5.50 versus $1.93, if both fees are being combined on a single check;
- Carriers contracting with tour wholesalers shall supply the tour wholesaler's name, address, taxpayer ID number, and the number of passenger seats blocked.
*Guidance in making wire transfers can be addressed to Ms. Zelda Gantt at (202) 874-6894.
Common Causes for Underpayment
Listed below are some of the common causes of underpayment of user fees to U.S. Customs and Border Protection.
* Failure to collect and remit customs user fees on all tickets issued/sold both in and outside of the U.S.:
- on one-way tickets into the U.S.
- from employees not traveling on duty status
- on frequent flyer bonus tickets
- on non-revenue tickets, including infants traveling for free
- from departing passengers whose tickets do not indicate a payment of user fees for their arrival into the U.S.
Failure to collect and remit similar immigration arrival processing fees on all tickets issued/sold both in and outside of the U.S. For further information on the remittance of these fees, contact the U.S. Customs and Border Protection Revenue Division, User Fee Team at telephone (317) 298-1200 or e-mail CUFIUFHelp@cbp.dhs.gov.
Failure to collect and remit similar agriculture arrival processing fees on all tickets issued/sold both in and outside of the U.S. For further information on the remittance of these fees, contact the Animal and Plant Health Inspection Service, Debt Management Team, at (877) 777-2128.
Failure to collect and remit similar IRS passenger departure fees on all tickets issued/sold both in and outside of the U.S. For further information on the remittance of these fees, contact the IRS at (800) 829-1040.
Failure to collect and remit FAA passenger facilities charge for individual airports on all tickets issued/sold both in and outside of the U.S. For further information on the remittance of these charges, contact the FAA at (202) 267-8825.
Failure of charter operators to properly collect and remit passenger user fees.
Failure to collect user fees based on ticketed passengers, rather than arriving passengers, as required by Title 19 United States Code 58c for customs user fees, Title 8 United States Code 1356 for immigration user fees, and Title 21 United States Code 136a for agriculture user fees (and corresponding regulations).
Records Maintenance
All air/sea carriers and tour wholesalers collecting and remitting the fees are responsible for maintaining sufficient documentation for U.S. Customs and Border Protection to verify the accuracy of the fee collection and remittance. Such information will be made available for inspection upon demand.
Additional Information
If additional information is needed concerning the collection and remittance of U.S. Customs and Border Protection air/sea passenger user fees, please contact:
U.S. Customs and Border Protection
Office of Administration, Cost Management Division
Room 4.5-A
1300 Pennsylvania Avenue, N.W.
Washington, D.C. 20229
Phone: (202) 344-1416
Fax: (202) 344-1818