[Code of Federal Regulations]
[Title 26, Volume 16]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR49.4264(f)-1]

[Page 267-268]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 49_FACILITIES AND SERVICES EXCISE TAXES--Table of Contents
 
                   Subpart D_Transportation of Persons
 
Sec. 49.4264(f)-1  Transportation outside the northern portion of the 
Western Hemisphere.

    (a) Transportation which leaves and re-enters the northern portion 
of the Western Hemisphere. For purposes of the regulations in this 
subpart, transportation, any part of which is outside the northern 
portion of the Western Hemisphere (as defined in paragraph (c) of this 
section) shall, if the route of the transportation leaves and re-enters 
the northern portion of the Western Hemisphere, be considered to consist 
of transportation to the point outside such northern portion and of 
separate transportation thereafter. The amount paid for such 
transportation will be considered to be a payment made for two trips and 
the taxability of the payment will be determined accordingly. Thus, an 
amount paid for transportation from New York to San Francisco with a 
stop at Caracas, Venezuela, will be considered an amount paid for a trip 
from New York to Caracas and for a separate trip from Caracas to San 
Francisco, neither of which is taxable transportation.
    (b) Transportation beginning before November 16, 1962, by water on a 
vessel--(1) Special rule. Section 4264(f)(2) prior to its amendment by 
section 5(b) of the Tax Rate Extension Act of 1962 provided a special 
rule in the case of transportation which begins before November 16, 
1962, any part of which is outside the northern portion of the Western 
Hemisphere, by water on a vessel which makes one or more intermediate 
stops at ports within the United States on a voyage which (i) begins or 
ends in the United States, and (ii) ends or begins outside the northern 
portion of the Western Hemisphere. In such a case, a stop at an 
intermediate port within the United States at which such vessel is not 
authorized both to discharge and to take on passengers shall not be 
considered to be a stop at a port within the United States. A vessel is 
considered to be authorized both to discharge and to take on passengers 
at an intermediate port unless there is a legal or other authoritative 
prohibition of such traffic. For purposes of the preceding sentence, an 
order issued by the owner or operator of a vessel prohibiting such 
vessel from either discharging or taking on passengers at the 
intermediate port is not a legal or other authoritative prohibition of 
such traffic.
    (2) Illustrations. The provisions of this paragraph may be 
illustrated by the following examples:

    Example (1). A purchases a steamship ticket in New York for 
transportation from New

[[Page 268]]

York to Southampton, England. The vessel on which A sails makes an 
intermediate stop during the course of such voyage at Boston to take on 
passengers. The vessel is not, however, authorized to discharge 
passengers at such port. No tax applies to the portion of the 
transportation between New York and Boston since under section 
4264(f)(2) the vessel is not considered to have made a stop at Boston.
    Example (2). B purchases a steamship ticket in San Francisco for a 
voyage from San Francisco to Tokyo, Japan. The vessel on which B travels 
makes a stop at Honolulu, Hawaii, to discharge passengers. The vessel is 
also permitted to take on passengers in Honolulu. Since the vessel is 
permitted both to discharge and take on passengers at the stop in 
Honolulu, the portion of the transportation between San Francisco and 
Hawaii not excluded under section 4262(b) (i.e., the portion of such 
transportation between the pier in San Francisco and the three-mile 
limit off the coast of California and between the three-mile limit off 
the coast of Hawaii and the pier in Honolulu) is taxable under section 
4262(a)(2) as transportation from one port in the United States to 
another port in the United States.

    (c) Northern portion of the Western Hemisphere. For purposes of the 
regulations in this subpart, the term ``northern portion of the Western 
Hemisphere'' means the area lying west of the 30th meridian west of 
Greenwich, east of the International Date Line, and north of the 
equator, but not including any country of South America.

[T.D. 6430, 24 FR 9665, Dec. 3, 1959, as amended by T.D. 6618, 27 FR 
11227, Nov. 14, 1962]