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Internal Revenue Code · 26 U.S.C.

§ 1353. Notional shipping income

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 1353

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Added
October 22, 2004 by Pub. L. 108–357
Last amended
December 21, 2005 by Pub. L. 109–135
Amendments
1 dated changes in the source credit
Length
4 subsections · 364 words · about 2 min to read
Cross-references
cites 1; cited by 0 Code sections and 0 other regulations
(a) In general

For purposes of this subchapter, the notional shipping income of an electing corporation shall be the sum of the amounts determined under subsection (b) for each qualifying vessel operated by such electing corporation.

(b) Amounts
(1) In general For purposes of subsection (a), the amount of notional shipping income of an electing corporation for each qualifying vessel for the taxable year shall equal the product of—
(A) the daily notional shipping income, and
(B) the number of days during the taxable year that the electing corporation operated such vessel as a qualifying vessel in United States foreign trade.
(2) Treatment of vessels the income from which is not otherwise subject to tax

In the case of a qualifying vessel any of the income from which is not included in gross income by reason of section 883 or otherwise, the amount of notional shipping income from such vessel for the taxable year shall be the amount which bears the same ratio to such shipping income (determined without regard to this paragraph) as the gross income from the operation of such vessel in the United States foreign trade bears to the sum of such gross income and the income so excluded.

(c) Daily notional shipping income For purposes of subsection (b), the daily notional shipping income from the operation of a qualifying vessel is—
(1) 40 cents for each 100 tons of so much of the net tonnage of the vessel as does not exceed 25,000 net tons, and
(2) 20 cents for each 100 tons of so much of the net tonnage of the vessel as exceeds 25,000 net tons.
(d) Multiple operators of vessel

If for any period 2 or more persons are operators of a qualifying vessel, the notional shipping income from the operation of such vessel for such period shall be allocated among such persons on the basis of their respective ownership, charter, and operating agreement interests in such vessel or on such other basis as the Secretary may prescribe by regulations.

(Added Pub. L. 108–357, title II, § 248(a), Oct. 22, 2004, 118 Stat. 1450; amended Pub. L. 109–135, title IV, § 403(g)(1)(A), Dec. 21, 2005, 119 Stat. 2624.)

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 1 other section

Amendment history

From the source credit and the official notes, newest first.

  1. Amended by Pub. L. 109–135Parts changed in 2005: (d)
  2. Added by Pub. L. 108–357

Where it sits in the Code

  1. Subtitle A Income Taxes
  2. Chapter 1 NORMAL TAXES AND SURTAXES
  3. Subchapter R Election To Determine Corporate Tax on Certain International Shipping Activities Using Per Ton Rate

Nearby sections

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

Amendments

2005—Subsec. (d). Pub. L. 109–135 substituted “ownership, charter, and operating agreement interests” for “ownership and charter interests”.

Statutory Notes and Related Subsidiaries

Effective Date of 2005 Amendment

Amendment by Pub. L. 109–135 effective as if included in the provision of the American Jobs Creation Act of 2004, Pub. L. 108–357, to which such amendment relates, see section 403(nn) of Pub. L. 109–135, set out as a note under section 26 of this title.

Effective Date

Section applicable to taxable years beginning after Oct. 22, 2004, see section 248(c) of Pub. L. 108–357, set out as an Effective Date of 2004 Amendments note under section 56 of this title.