NCL Some Hope...Maybe

[NoobCroozer]

2 hours ago, njhorseman said:

First, using cruise ships as hospitals is not practical for a variety of reasons. There's a lengthy thread on the "Ask a Cruise Question" board discussing it. Regardless, who said they would allow the ships to be used at no cost? After Hurricane Katrina Carnival got paid a pretty  penny to allow a ships to be used as hotels for evacuees and displaced city workers. 

 

 

Thanks for the info, I'll check it out.

 

I didn't say it would be at not cost, I would expect them to bill. But I would think who ever did step up with some beds, which New York in particular needs desperately, it could receive come sort of aid. Whether a PR stunt or not.

 

I will now get edumicated on the post you state.

 

Be well.

[njhorseman]

Just now, NoobCroozer said:

Thanks for the info, I'll check it out.

 

I didn't say it would be at not cost, I would expect them to bill. But I would think who ever did step up with some beds, which New York in particular needs desperately, it could receive come sort of aid. Whether a PR stunt or not.

 

I will now get edumicated on the post you state.

 

Be well.

A US Navy hospital ship is being dispatched to NY City...so we have a real floating hospital on the way 

[NoobCroozer]

2 minutes ago, njhorseman said:

A US Navy hospital ship is being dispatched to NY City...so we have a real floating hospital on the way 

Yeah I know but it's a drop in the bucket. There are a total of 53,000 beds in NY, and they are estimating we will need 140,000 beds in 14-21 days. Hopefully the curve starts to level soon.

[oteixeira]

I am just here eating my popcorn and waiting on the doom and gloom bankrupt in a few weeks posters from the stock post to chime in.....Shoot, I could have sold today and had 30% profit on my 3 cruise line stocks.

[npcl]

6 hours ago, chengkp75 said:

You are one up on me, finding the IRS section that applies, but yes.  I'm not sure about your question of "money paid by US companies to shipping firms", but I'll take a stab.  Any company that operates ships, and that company is not incorporated in the US, is exempt from US taxation (subject to the blah, blah in the IRS code, which is pretty irrelevant, as most nations don't tax foreign corporations), so yes, the vast majority of ships and the shipping companies that own them, are exempt from US taxes, and these foreign flag ships bring in the vast majority of goods purchased in the US.  I'm still not sure about what you are asking about with "money paid by a US company".  Regardless of where that foreign corporation gets its revenue from, it is not subject to US taxes.

Basically without IRS Section 883, the cruise lines would have to pay tax on all income received from sources in the US, even if they and their ships were not located here.

 

What I was wondering is if cargo ships, being paid by freight companies located in the US, are also protected by 883, from having to pay tax on that income from a US source? I would expect they would be.

 

Then that raises the biggest question is the law and 883 was changed such that it did not apply to cruise ships, can you think of any other marine businesses that would be impacted?

[npcl]

6 hours ago, graphicguy said:

I would think for their viability, they need to get us back on their ships.  Raising prices, delaying refunds, raising fares (a lot), etc IS NOT going to get us back on their ships.  Their choice, but NCL is running a distant 3rd to Carnival and Royal.  Suffice to say, sounds like I'm one of many who they could have kept in the fold.  They chose not to.

 

Again, most of NCL's recent problems started when Del Rio took over.  Yes, you can point to this crisis as beyond his control, but the measure of a company isn't when things are going good.  It's how they handle the things when challenges (inevitably) occur.

I believe there biggest concern at the moment is cash management and their survival.  Some delays might annoy folks but would generally be forgotten quickly once this blows over.

 

Far more impact full will be 1. Stock market and job loss impact on cruising public 2. Concerns over cruise safety 3. Destination ports perception of the desire of cruise ships calling.

[chengkp75]

7 hours ago, npcl said:

Basically without IRS Section 883, the cruise lines would have to pay tax on all income received from sources in the US, even if they and their ships were not located here.

 

What I was wondering is if cargo ships, being paid by freight companies located in the US, are also protected by 883, from having to pay tax on that income from a US source? I would expect they would be.

 

Then that raises the biggest question is the law and 883 was changed such that it did not apply to cruise ships, can you think of any other marine businesses that would be impacted?

This section of the IRS code is what is known as a reciprocity clause, and is done "in the interest of international comity and commerce", meaning that if we did not do this (and you notice that it only applies to foreign entities that are in countries that do the same thing to US entities earning money in their country), other countries would slap taxes on US corporations making money in their countries.  While Liberia placing a tax on US flag ships and airlines earnings in Liberia would not amount to much, our doing this could lead to many shipping companies around the world having their flag nations, or even their country of incorporation, respond with tax treaty reprisals that would hurt US corporations.  I am not a tax expert, but just going off the top of my head.

 

I think that if the section was changed to exclude cruise ships, that it would have to exclude all ships, and therefore every foreign ship using a US port would be subject to US taxes, and this would cause a huge ripple in not just maritime business, but the entire US economy, as this cost would be passed to the consumer of those goods brought in from overseas.

[beerman2]

18 hours ago, graphicguy said:

The stock market in general is up because of the potential stimulus passage.

 

NCL, in particular, seems to be in the nether regions operationally.

 

Got luggage tags today for my cancelled cruise that was supposed to sail 3/28.  Can't even imagine what it cost to send out letters and luggage tags plus mailing costs for 1,000s of passengers.  Add to that, the 90 day wait period for refunds.  The huge price rise on future cruises.

 

It's like DelRio has totally lost control of the company.  I can't see how they will get things moving in the right direction after this is over.  He just doesn't seem to know how, nor how to get a handle on the company.

And to add to the cost, I get a mailer/pamphlet with cruises weekly. What is the cost to continue to print/mail them.

 

I just laugh now when they come in the mail. What a waste of money right now. You would think NCL would suspend mailings until they start sailing again.

[graphicguy]

28 minutes ago, beerman2 said:

And to add to the cost, I get a mailer/pamphlet with cruises weekly. What is the cost to continue to print/mail them.

 

I just laugh now when they come in the mail. What a waste of money right now. You would think NCL would suspend mailings until they start sailing again.

This has been happening for a while...that is, the NCL infrastructure’s descent.  Those of us who have been cruising with them for a while have seen it.  Constant pricing snafus.  The most recent bout with instructing the sales people to be untruthful in selling to potential customers.  The lack of accurate communication with customers when things go sideways.  Now, the gyrations they are putting themselves and their customers through for refunds.

 

Interestingly, they were jolly on the spot posting my exact 125% FCC, but can’t seem to get the system to offer a simple refund.

 

Again, I don’t see Del Rio being in charge for much longer.  Too many customers lost.

[beerman2]

2 minutes ago, graphicguy said:

This has been happening for a while...that is, the NCL infrastructure’s descent.  Those of us who have been cruising with them for a while have seen it.  Constant pricing snafus.  The most recent bout with instructing the sales people to be untruthful in selling to potential customers.  The lack of accurate communication with customers when things go sideways.  Now, the gyrations they are putting themselves and their customers through for refunds.

 

Interestingly, they were jolly on the spot posting my exact 125% FCC, but can’t seem to get the system to offer a simple refund.

 

Again, I don’t see Del Rio being in charge for much longer.  Too many customers lost.

And Del Rio goes away with a boatload of money! Only been on 3 NCL cruises as opposed to 9 Carnival. 

 

Personally I think there are far more similarities in cruiselines than differences. As of last cruise NCL was the better deal for us. Drinks/packages are important to us and we enjoy the Specialty dining.

 

If I can save 💰💰 sailing with NCL over the others I will continue to turn a blind eye to their business model. Our NCL cruise consultant is very good so no issue with customer service.

[graphicguy]

1 minute ago, beerman2 said:

And Del Rio goes away with a boatload of money! Only been on 3 NCL cruises as opposed to 9 Carnival. 

 

Personally I think there are far more similarities in cruiselines than differences. As of last cruise NCL was the better deal for us. Drinks/packages are important to us and we enjoy the Specialty dining.

 

If I can save 💰💰 sailing with NCL over the others I will continue to turn a blind eye to their business model. Our NCL cruise consultant is very good so no issue with customer service.

You’re right about Del Rio exiting with a pot full of cash if/when he’s escorted out of the building.

 

I’ve sailed NCL quite a bit.  I have definitely seen their processes and their customer interfacing doing a nose dive in the last couple of years.  It’s not going in the right direction now, either.

 

Like you, I tolerated a lot due to the pricing.  Once that advantage is gone (and it seems it is), there’s really no reason for me to sail them, regardless of my Latitudes “status”.

[buckeyefrank]

22 hours ago, esm54687 said:

I'm a little frustrated that the cruise industry flags their ships in foreign countries to bypass taxes, labor laws, etc from the US but here they are getting my tax money instead of it going in my pocket where it should.

What taxes are the cruise ships not paying that they would be paying if flagged in the US?  The only benefit for a foreign flag is not having to pay employees based on US wage and hour laws.  The corporate headquarters are still based in the US, the US activities are still subject to US income taxes.  They continue to pay port fees and taxes for homeports in the US and the cruise industry employs something like 150,000 people in the US which are subject to employee wage and hour laws along with a high percentage being union employees.

[ColeThornton]

15 minutes ago, buckeyefrank said:

What taxes are the cruise ships not paying that they would be paying if flagged in the US?  The only benefit for a foreign flag is not having to pay employees based on US wage and hour laws.  The corporate headquarters are still based in the US, the US activities are still subject to US income taxes.  They continue to pay port fees and taxes for homeports in the US and the cruise industry employs something like 150,000 people in the US which are subject to employee wage and hour laws along with a high percentage being union employees.

 

 

I believe port fees and taxes in port are paid by the NCL customers.

[njhorseman]

26 minutes ago, buckeyefrank said:

What taxes are the cruise ships not paying that they would be paying if flagged in the US?  The only benefit for a foreign flag is not having to pay employees based on US wage and hour laws.  The corporate headquarters are still based in the US, the US activities are still subject to US income taxes.  They continue to pay port fees and taxes for homeports in the US and the cruise industry employs something like 150,000 people in the US which are subject to employee wage and hour laws along with a high percentage being union employees.

Good grief, you couldn't be more wrong. The cruise lines are incorporated in foreign countries, not the US, so they pay nothing in US corporate income taxes .

 

The cruise lines don't pay the port fees for the US home ports, the passengers do as part of their cruise fare.

 

I can't imagine where you got the idea that 150,000 people are being employed in the US. It would be a tiny fraction of that number, and where do you get the idea that a high percentage are unionized? The cruise lines' US employees are corporate executive, administrative and sales personnel, and I'd be surprised if any of them are unionized.

Edited March 25, 2020 by njhorseman

[chengkp75]

1 hour ago, buckeyefrank said:

What taxes are the cruise ships not paying that they would be paying if flagged in the US?  The only benefit for a foreign flag is not having to pay employees based on US wage and hour laws.  The corporate headquarters are still based in the US, the US activities are still subject to US income taxes.  They continue to pay port fees and taxes for homeports in the US and the cruise industry employs something like 150,000 people in the US which are subject to employee wage and hour laws along with a high percentage being union employees.

And, while foreign corporations, which all the cruise lines are, are required to pay taxes on earnings made in the US, a good poster on another thread looked up the IRS Code, and found section 883, which allows foreign operators of vessels and airplanes to not pay taxes on revenues from these foreign assets, provided the country where the asset is registered (the flag state for a ship) does not tax US vessels or airplanes on the revenue generated in their country.  So, no, the cruise lines pay virtually no corporate federal tax.  CLIA's own documents state that the majority of taxes paid by it's members in the US are Social Security on US employees, and local property taxes.

 

The only unionized "employees" of the cruise line, and they are not cruise line employees, would be the longshoremen.  These people are employed by "stevedoring" companies who contract to the cruise line to provide their labor.  Any taxes are paid by the stevedoring company, or the individual longshoremen.

 

And, as for the "only benefit" of a foreign flag being labor and wage issues, again, you could not be further from the truth.  To give a couple of examples of the cost of US flag, while the USCG's goal is to inspect every foreign flag cruise ship in a US port, at least once a year, that goal is not always met, due to ship schedule, USCG availability, and budgetary constraints on the USCG.  However, a US flag cruise ship must, by law, be inspected by the USCG 4 times a year, and the cruise ship pays for the inspection, while port state inspections of foreign ships are not charged.  Also, much of the equipment on foreign flag cruise ships meet EU standards, as allowed by the IMO, but the USCG requires these items to meet US standards, which can be different, or can require an actual USCG inspection of the manufacturing process, and this testing can typically double the price of things from a fire hose to a boiler safety valve, and entire firefighting or lifesaving systems.  It is estimated by the GAO that the difference between operating a container ship (crew of around 20) as a foreign flag ship or a US flag ship is $2 million/year.  Estimate how much more equipment, inspections, and crew cost would be involved with a cruise ship.  The POA typically costs twice as much to operate as a foreign flag cruise ship, and crew cost does not make up all, or even most of that difference.

[hamrag]

1 hour ago, ColeThornton said:

 

 

I believe port fees and taxes in port are paid by the NCL customers.

 

But surely the point is that the country in which ships port (not solely in USA, you understand that presumably) benefits from port tax revenue so the whole infrastructure of the country or state (in USA) accrues a benefit.

Edited March 25, 2020 by hamrag

[ColeThornton]

True.  That is a benefit, however this week more than a few have made it a point to say that it is NCL making the port fees and taxes payment out of their pockets.  That's simply not true.  The customers pay for it.

[chengkp75]

42 minutes ago, hamrag said:

 

But surely the point is that the country in which ships port (not solely in USA, you understand that presumably) benefits from port tax revenue so the whole infrastructure of the country or state (in USA) accrues a benefit.

However, in many cases the port fees do not cover the cost of the services and infrastructure the cruise ships require.

[spanishguy1970]

On 3/24/2020 at 11:23 AM, esm54687 said:

Sorry.... it is purely a business move and based on their decision they should receive 0 of my tax money....give the bailout money to US companies that employee US citizens.....    it is US money after all. 

 

In fact: Norwegian said flat out in its most recent annual filing that under “current Bermuda law,” where it’s incorporated, the company is “not subject to tax on income and capital gains.” In fact, it recorded a net tax benefit in 2019

 

 

hear hear, i said the same thing, but some people use the excuse that they pay port taxes, so what? . I don't want any of my taxes going towards the cruise industry.

[njhorseman]

53 minutes ago, chengkp75 said:

And, while foreign corporations, which all the cruise lines are, are required to pay taxes on earnings made in the US, a good poster on another thread looked up the IRS Code, and found section 883, which allows foreign operators of vessels and airplanes to not pay taxes on revenues from these foreign assets, provided the country where the asset is registered (the flag state for a ship) does not tax US vessels or airplanes on the revenue generated in their country.  So, no, the cruise lines pay virtually no corporate federal tax.  CLIA's own documents state that the majority of taxes paid by it's members in the US are Social Security on US employees, and local property taxes.

And in every cruise line's SEC form 10-K you can find confirmation that they are not subject to federal income tax in their discussion of taxation due to the provisions of section 883.  (By the way the country of incorporation is key to the exemption, not just where the ships are flagged.)

 

On NCL's recently filed 10-K for 2019, the explanation and discussion of this issue can be found starting on the bottom of page 19.

[JVD2]

On 3/24/2020 at 11:51 AM, ColeThornton said:

 

 

I was always under the impression that it was us cruisers who paid the port fees.  Do the cruise lines pay extra above and beyond what they charge the passengers for port fees?

NCL makes money on the port fees, miss a port for bad weather, do you get anything back, no way, that has happened a few times to me

[ColeThornton]

1 minute ago, JVD2 said:

NCL makes money on the port fees, miss a port for bad weather, do you get anything back, no way, that has happened a few times to me

 

 

Did you make a complaint about that, JVD?    I've missed many a port in my time and have gotten reimbursed every time.  It's usually not a large amount, but hey...it's my money.

[beerman2]

23 minutes ago, JVD2 said:

NCL makes money on the port fees, miss a port for bad weather, do you get anything back, no way, that has happened a few times to me

Have missed ports before and have always gotten port fees back. Not sure why you didn't or did you just miss them posted to your  on board account?

Edited March 25, 2020 by beerman2

[boatseller]

I've always wondered it the people who gripe about foreign flagged vessels apply that same logic to airlines?

[Starry Eyes]

2 hours ago, JVD2 said:

NCL makes money on the port fees, miss a port for bad weather, do you get anything back, no way, that has happened a few times to me

Like the others, we have consistently received refunds to our board accounts when we missed ports.  Occasionally, we have even received small, unexpected adjustments when we did not miss a port; unbeknownst to us, overestimated taxes/fees were being refunded.

 

Our on board accounts are quite straightforward and DH checks them regularly, so we notice these refunds, even though they are rather small amounts of money.  Any chance these small refunds just escaped your notice while you were understandably distracted by other things on board?