Most cruise lines don't pay federal income tax — just one of the reasons they aren't getting a bailout

https://news.yahoo.com/most-cruise-lines-dont-pay-105751022.html

Leticia Miranda and Isabel Soisson
,NBC News•April 1, 2020

Cruise lines, which have been pummeled by the economic impact of the coronavirus, may not be eligible to receive relief through the bailout fund included in the $2 trillion stimulus bill passed on Friday.

While the stimulus bill allocates $500 billion for distressed businesses, in order to qualify, a company must be “created or organized in the United States or under the laws of the United States” and “have significant operations in and a majority of its employees based in the United States,” according to the new law.

Some of the country’s largest publicly traded cruise lines are incorporated offshore. Carnival Corporation, which owns the Princess cruise line, is incorporated in Panama. Royal Caribbean is incorporated in Liberia, and Norwegian Cruise Lines is incorporated in Bermuda.

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The three biggest cruise lines are incorporated in what are called equivalent exemption countries where they are not required to pay the 21 percent corporate income tax that U.S. companies are obligated to pay, said Robert Willens, a tax and accounting analyst.

“Why don’t they just relocate and domesticate and change the place of incorporation from Panama to the U.S. and this way they’ll be eligible for loans and loan guarantees?” he said. “If they did that, they would win the battle but lose the war because they would be forced to give up their tax exemption. I assure you that is sacrosanct; they're not giving up their tax exemption.”

For instance, Carnival, the biggest U.S. cruise line company, would have had to pay around $600 million in corporate taxes on its reported $3 billion in income for 2019.

With a potential loss in profit to taxes at these amounts, “they’re not moving to the U.S.,” Willens said.

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