United States Court of Appeals,
Eleventh Circuit.
No. 95-4944.
ROYAL CARIBBEAN CRUISES, LTD., Plaintiff-Counter-Defendant-
Appellee,
v.
UNITED STATES of America, Defendant-Counter-Claimant-Appellant.
March 25, 1997.
Appeal from the United States District Court for the Southern
District of Florida. (No. 95-204-CIV-CCA), C. Clyde Atkins,
District Judge.
Before ANDERSON, Circuit Judge, KRAVITCH*, and HENDERSON, Senior
Circuit Judges.
PER CURIAM:
Royal Caribbean Cruises, Ltd. ("Royal Caribbean") filed this
tax action in the Southern District of Florida seeking a refund of
taxes paid pursuant to 26 U.S.C. § 4471. The United States filed
a counterclaim seeking additional taxes it claims Royal Caribbean
owes under § 4471. Royal Caribbean moved for summary judgment, and
the government cross-motioned for summary judgment on its
counterclaim. The district court granted Royal Caribbean's motion
and denied the government's motion. The government appealed.
I. FACTS
The material facts in this case are not in dispute. Royal
Caribbean, a Miami-based cruise line, transports passengers on
cruises which begin in Vancouver, Canada, travel along the Alaskan
coast, and end in Vancouver, Canada. All of the passengers on
*
Judge Kravitch was in regular active service when this
matter was originally submitted but has taken senior status
effective January 1, 1997.
these cruises begin and end their voyages in Vancouver, Canada.
During the voyage, the Royal Caribbean ships stop at ports in
Alaska and the passengers may leave their ship to go ashore. Some
passengers do leave the ship during the Alaskan stopovers, but the
passengers return before the ship sails again. These stopovers are
of a short duration and do not last overnight.
Royal Caribbean ordinarily does not collect taxes under § 4471
for passengers who leave the ship during the Alaskan stopovers.
However, Royal Caribbean collected the tax for one passenger and
filed this lawsuit seeking a refund.
II. STANDARD OF REVIEW
We review the appeal of a summary judgment de novo, applying
the same legal standards as the district court. Mize v. Jefferson
City Bd. of Educ., 93 F.3d 739, 742 (11th Cir.1996).
III. ANALYSIS
Section 4471 imposes a $3 per passenger tax on covered
voyages:
§ 4471. Imposition of tax
(a) In general.—There is hereby imposed a tax of $3 per
passenger on a covered voyage.
(b) By whom paid.—The tax imposed by this section shall be
paid by the person providing the covered voyage.
(c) Time of imposition.—The tax imposed by this section shall
be imposed only once for each passenger on a covered voyage,
either at the time of first embarkation or disembarkation in
the United States.
26 U.S.C. § 4471. Section 4472 defines covered voyages and
provides in pertinent part:
§ 4472. Definitions
For purposes of this subchapter—
(1) Covered voyage.—
(A) In general.—The term "covered voyage" means
that voyage of—
(i) a commercial passenger vessel which extends
over 1 or more nights
...
during which passengers embark or disembark the
vessel in the United States.
26 U.S.C. § 4472(1)(A).
At issue in this appeal is the meaning of the words
"embarkation" and "disembarkation" in § 4471(c). Royal Caribbean
argues that "embarkation" and "disembarkation" refer to the
beginning and end of a voyage. Royal Caribbean thus believes that
the tax in § 4471 should not be imposed on its Vancouver voyages
because no passenger begins or ends a voyage in the United States.
The government contends that "embarkation" and "disembarkation"
refer to getting on and off a ship. As a result, the government
argues that the tax in § 4471 applies when Royal Caribbean
passengers get on or off the ships during Royal Caribbean's Alaskan
stopovers.
A. Statutory Language
Our first step in addressing a question of statutory
interpretation is to analyze the statutory language. If the words
of the statute have an unambiguous meaning, we enforce that meaning
absent a clear indication of congressional intent to the contrary.
RJR Nabisco, Inc. v. United States, 955 F.2d 1457, 1460 (11th
Cir.1992).
In this case, both parties argue with vigor that the statute
is unambiguous. The government points to the language of §
4471(c), which provides for taxation "at the time of first
embarkation or disembarkation in the United States." 26 U.S.C. §
4471(c). The government argues that the word "first" indicates
that there can be multiple embarkations or disembarkations. There
can be more than one instance of getting on or off a ship, the
government argues, but there can be only one beginning or end of a
voyage. The government thus contends that the word "first"
supports the government's reading of the statute. The government
also notes that § 4472 refers to a voyage during which the
passengers "embark or disembark the vessel." 26 U.S.C. §
4472(1)(A) (emphasis added). This provision, the government
argues, is framed in terms of getting on or off a vessel, not
beginning or ending a voyage.
Royal Caribbean argues that §§ 4471 and 4472 are fundamentally
concerned with voyages. Royal Caribbean notes that the language
"first embarkation or disembarkation" may merely mean that the tax
is to be imposed at the beginning or end of the voyage, whichever
occurs in the United States first. For example, if a passenger
begins the voyage in Vancouver and ends the voyage in Alaska, the
end of the voyage is the "first embarkation or disembarkation" that
occurs in the United States with respect to that passenger. Royal
Caribbean also points out that the language in § 4472 regarding
embarking or disembarking "the vessel" occurs within the subsection
defining "covered voyage." See 26 U.S.C. § 4472(1). As a result,
Royal Caribbean argues, the main thrust of the statute is voyages,
not getting on and off vessels.1
The government and Royal Caribbean both present well-reasoned
interpretations of the statutory language. However, the conflict
in their interpretations reveals that, despite their protestations
to the contrary, the statute is ambiguous. We therefore examine
the statute's legislative history and the applicable agency
regulations in order to resolve this ambiguity. RJR Nabisco, Inc.,
955 F.2d at 1462.
B. Legislative History
The House Conference Report (the "Conference Report") and the
Senate Finance Committee Explanation (the "Senate Explanation") for
this statute favor Royal Caribbean's interpretation of § 4471. The
government points out that the Senate Explanation states that the
purpose of the tax in § 4471 is to "meet partially the expenses
incurred by the United States in providing navigation, safety and
other services to cruise ships and their passengers." Senate
Finance Comm. Explanation of Revenue Reconciliation Act of 1989,
101st Cong., 1st Sess., 135 Cong. Rec. 24,319, 24,359 (1989). The
government argues that this stated purpose indicates that Congress
intended the tax to apply any time passengers get on or off ships
in the United States. However, the legislative history reveals
1
Both parties point us to the dictionary definitions of
"embark" and "disembark;" however, these definitions do not
clarify this dispute. "Embark" is defined as "to cause to go on
board a boat or airplane," but a synonym for "embark," according
to Webster's, is "to make a start: COMMENCE." Webster's New
Collegiate Dictionary at 367 (1979). "Disembark" is defined as
"to put ashore from a ship ... to go ashore out of a ship." Id.
at 324. The definition of "disembark" thus favors the
government, but the definition of "embark" supports both parties'
arguments.
that a harbor maintenance tax already applied to ships merely
making stopovers in the United States. Id.; H.R. Conf. Report No.
386, 101st Cong., 1st Sess. 602 (1989), reprinted in 1989
U.S.C.C.A.N. 3018, 3205.
The Conference Report indicates that the tax in § 4471 is to
be assessed "either on initial embarkation or disembarkation in the
United States." 1989 U.S.C.C.A.N. at 3205. The Senate Report
explains that the tax is to be assessed "when a passenger first
embarks or disembarks in the U.S." 135 Cong. Rec. at 24,359. The
use of the words "initial" and "first," like the use of the word
"first" in § 4471(c), could be construed to mean that there can be
multiple embarkations or disembarkations. This construction would
suggest that "embarkation" and "disembarkation" mean "get on or off
a ship" because there can be multiple instances of getting on or
off a ship, but there can be only one beginning or end of a voyage.
However, the Conference Report and Senate Explanation explain that
the tax will apply to a vessel that "embarks from a United States
port on a voyage ...." 1989 U.S.C.C.A.N. at 3205; 135 Cong. Rec.
at 24,359 (emphasis added). By speaking in terms of "embark[ing]
... on a voyage," these legislative materials provide support for
Royal Caribbean's argument that "embark" and "disembark" mean
"begin or end a voyage."
C. The Regulation
The regulation applicable to § 4471 also favors Royal
Caribbean's interpretation of "embark" and "disembark." The
regulation provides that "a voyage may be a covered voyage with
respect to a passenger even if the passenger does not make both an
outward and homeward passage or if the point of first embarkation
or disembarkation by the passenger in the United States is an
intermediate stop of the vessel." 26 C.F.R. § 43.4472-1(b). The
regulation's reference to outward and homeward passages supports
Royal Caribbean's reading of the statute. This language would be
unnecessary if "embark" and "disembark" meant "get on or off the
ship" because the tax would apply when a passenger got on or off
the vessel, regardless of whether the passenger was making both an
outward and a homeward passage. However, under Royal Caribbean's
interpretation of "embark" and "disembark," this language is
required in order to clarify that the tax applies even if a
passenger does not make both an outward journey from and a homeward
journey to the United States. For example, a passenger might board
a cruise ship in Alaska, sail to Vancouver, and return to Alaska by
airplane. Or, the passenger might sail from Vancouver, end the
voyage in Alaska, and return to Vancouver by airplane. The
regulation indicates that with respect to such passengers, the
voyages are covered voyages. Under the government's interpretation
of the statute, this clarification would not be needed.
Similarly, the regulation's reference to intermediate stops
would be unnecessary if "embark" and "disembark" meant "get on or
off the ship." If the government's interpretation of the statute
were correct, the fact that the stop was intermediate would be
immaterial as long as passengers were getting on or off the ship in
the United States. However, the reference to intermediate stops is
necessary if "embark" and "disembark" mean "begin or end a voyage"
in order to clarify that an individual passenger's voyage may be
beginning, thus causing the tax to apply, even if the passenger
boards the ship at an intermediate stop. For example, if a ship
boards passengers in Vancouver, sails to Alaska where an additional
passenger boards to begin an individual voyage, and then returns to
Vancouver, this regulation provides that the voyage is a covered
voyage with respect to the passenger who boarded the vessel in
Alaska, even though the ship began its voyage in Vancouver.
D. Summary
Although the words "embarkation" and "disembarkation" are
ambiguous as used in § 4471, we conclude that the most reasonable
reading of these words, in light of the legislative history and
applicable regulation, is that they mean "beginning or end of a
voyage." This interpretation is consistent with the general rule
of construction that ambiguous tax statutes are to be construed
against the government and in favor of the taxpayer. See Miller v.
Standard Nut Margarine Co., 284 U.S. 498, 508, 52 S.Ct. 260, 263,
76 L.Ed. 422 (1932); Gould v. Gould, 245 U.S. 151, 153, 38 S.Ct.
53, 53, 62 L.Ed. 211 (1917); Tandy Leather Co. v. United States,
347 F.2d 693, 694-95 (5th Cir.1965). 2 We therefore hold that the
tax provided for in § 4471 is not applicable when passengers who
begin and end their voyages at foreign ports get on or off a ship
during a stopover in the United States. Instead, this tax is only
applicable when passengers begin or end their voyages in the United
States.
2
In Bonner v. City of Prichard, 661 F.2d 1206 (11th
Cir.1981) (en banc), this court adopted as binding precedent all
of the decisions of the former Fifth Circuit handed down prior to
the close of business on September 30, 1981. Id. at 1209.
IV. CONCLUSION
For the foregoing reasons, the judgment of the district court
granting Royal Caribbean's motion for summary judgment and denying
the government's motion for summary judgment is affirmed.
AFFIRMED.