What Is the Harbor Maintenance Tax and Who Pays It?

The Harbor Maintenance Tax is a federal fee of 0.125 percent charged on the value of commercial cargo loaded or unloaded at U.S. ports that receive federal maintenance funds.¹ It also applies to passenger fares on commercial vessels calling at those ports. Revenue goes into a dedicated trust fund that pays for dredging and upkeep of the nation’s navigable channels, and the people who owe it are importers, domestic shippers moving cargo between covered ports, foreign trade zone operators, and passenger vessel operators.

What Triggers the Tax

The statute taxes “port use,” defined as loading or unloading commercial cargo from a commercial vessel at a qualifying port.² Three categories of movement count: imported cargo arriving by vessel, domestic cargo shipped between covered U.S. ports, and cargo admitted into foreign trade zones.³

Passengers transported for compensation or hire are “commercial cargo” for this purpose, so cruise lines and other passenger vessel operators pay the same 0.125 percent on each fare. The operator owes only once per passenger per cruise, no matter how many covered ports the ship visits.⁴

Not every waterfront is a “port” for these purposes. The statute excludes any channel or harbor where no federal funds have been spent on construction, maintenance, or operation since 1977, and any waterway deauthorized by federal law before 1985.¹ A fully self-funded facility is not a tax point.

How to Calculate What You Owe

The rate is 0.125 percent of cargo value. A $100,000 shipment generates $125; a $2 million container generates $2,500.¹ The rate has not changed since 1986, so the variable in every calculation is the valuation method.

For imports, the fee uses the appraised value CBP already assigns for duty purposes under 19 U.S.C. 1401a, the same transaction value declared on the entry paperwork. For domestic cargo moving between U.S. ports, the value comes from standard commercial documents such as invoices and bills of lading. If no commercial documentation exists, the same customs valuation rules used for imports apply. For passenger vessels, the base is the actual transportation charge each passenger pays, or the prevailing charge for comparable service when no fare is paid.⁴

Who and What Is Exempt

Exports leaving the United States for a foreign destination are not taxed. The Supreme Court held in United States v. United States Shoe Corp. (1998) that applying the Harbor Maintenance Tax to exports violated the Constitution’s Export Clause because it functioned as an ad valorem tax rather than a user fee matched to actual port use.⁵ Congress has not enacted a replacement user fee, so exports have been functionally exempt since that decision.

Cargo owned by or shipped on behalf of the United States or any federal agency is also fully exempt. So is cargo owned or financed by nonprofit organizations and cooperatives when CBP certifies the shipment is for humanitarian or development assistance overseas.²

Several further categories are carved out by regulation:⁴

Inland waterway cargo where the vessel’s fuel is already subject to the Inland Waterways Fuel Tax, which avoids double taxation on barge traffic.
Ferries engaged primarily in transporting passengers and their vehicles between U.S. points, or between the U.S. and a contiguous country.
Fuel, ship’s stores, sea stores, and equipment necessary to operate the vessel.
Fish or other aquatic animal life caught at sea and not previously landed on shore.
In-bond cargo entering solely for transportation and direct exportation, with special rules for shipments headed to Canada or Mexico.

Small shipments get a pass too. Imports qualifying for informal entry procedures are exempt, and any domestic shipment valued at $1,000 or less is exempt. There is also a quarterly floor: if the total value of your fee-eligible shipments for the quarter is $10,000 or less, no quarterly payment is required.⁴ Moving cargo within the same port does not trigger the fee, loading and unloading the same cargo from the same vessel counts as one taxable event, and relay cargo moving under a single bill of lading between vessels at a U.S. port on its way to or from Alaska, Hawaii, or a U.S. possession is taxed only once.²

How to File and Pay

Importers pay at the time of formal entry. The fee is added to any duties, taxes, or other charges owed and reported on CBP Form 7501, the Entry Summary. When no other duty or fee applies and the harbor maintenance fee exceeds $3, payment is submitted with the entry forms.⁴

Domestic shippers, foreign trade zone operators, and passenger vessel operators file quarterly on CBP Form 349, the Harbor Maintenance Fee Quarterly Summary Report. Quarters end on the last day of March, June, September, and December, and payment must reach CBP no later than 31 days after the quarter closes.⁴ The first-quarter report covering January through March is due by May 1. Filers can submit electronically through the Automated Clearinghouse at pay.gov, or mail Form 349 with a check to CBP’s Office of Finance in Indianapolis.

If you overpaid, underpaid, or reported the wrong value on a prior quarterly filing, correct it with CBP Form 350, the Harbor Maintenance Fee Amended Quarterly Summary Report, available on CBP’s website.⁶ Filing the correction promptly matters, because an unresolved discrepancy can draw a penalty once CBP identifies it.

Penalties and Recordkeeping

Late or missing payments carry a penalty equal to the liquidated damages CBP assesses for late entry summary filings, and importers are also liable under their basic importation and entry bond.⁴ Filers can apply for relief and mitigation under the same procedures that apply to other customs penalties, but paying on time is far cheaper than correcting later.

Records tied to harbor maintenance fee filings must be kept for five years from the date of entry or the date of the activity that created the record.⁷ That covers invoices, bills of lading, the commercial documentation used to value the cargo, and copies of Forms 349 and 7501. The five-year window is the standard customs retention period and applies whether the shipment was an import or a domestic movement.

Where the Money Goes

Collections do not flow into the general budget. They go into the Harbor Maintenance Trust Fund, a dedicated account that funds port and channel maintenance performed by the U.S. Army Corps of Engineers, including maintenance dredging to keep channels at approved depths, disposal of dredged material, and repair of jetties and breakwaters.

For years, collections outpaced spending, and by fiscal year 2019 roughly $9.3 billion in collected revenue sat unspent in the Treasury.⁸ The Water Resources Development Act of 2020 set a spending formula tied to prior-year deposits plus an escalating supplement, rising from $500 million in fiscal year 2021 to $1.5 billion in fiscal year 2030, and directed that at least 13 percent of harbor operations and maintenance funds go to the Great Lakes Navigation System.⁹ The fund is now being drawn down faster, and projects that had waited years are moving.

1
Office of the Law Revision Counsel. 26 US Code 4461 – Imposition of Tax
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Office of the Law Revision Counsel. 26 US Code 4462 – Definitions and Special Rules
3
U.S. Customs and Border Protection. Harbor Maintenance Fee (HMF)
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eCFR. 19 CFR 24.24 – Harbor Maintenance Fee
5
Justia. United States v. United States Shoe Corp.
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U.S. Customs and Border Protection. CBP Form 350 – Harbor Maintenance Fee Amended Quarterly Summary Report
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eCFR. 19 CFR 163.4 – Record Retention Period
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U.S. Congress. Full Utilization of the Harbor Maintenance Trust Fund
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U.S. Congress. Water Resources Development Act of 2020