United States Passenger Vessel Development Tax Act

United States Passenger Vessel Development Tax Act - Amends the Merchant Marine Act, 1936 to include U.S. documented passenger vessels in all domestic trades in the capital construction fund (CCF) program in order to encourage investment in the replacement of such vessels with U.S. constructed and documented vessels. Makes a passenger vessel with an interim coastwise passenger trade endorsement eligible for the CCF program.

Sets forth a formula for the calculation of tax on earnings, including capital gains, derived from investments made with amounts from passenger vessel funds.

Sets forth provisions regarding: (1) the tax treatment of qualified withdrawals from such funds for certain passenger vessel lease payments; (2) computation of interest with respect to nonqualified withdrawals from the fund; (3) inclusion of passenger vessel design and engineering costs as a permissible qualified withdrawal from the fund; (4) inclusion of income-producing assets, including accounts receivable, as permissible investments for such funds; and (5) tax treatment on interim certificate vessel deposits in and withdrawals from the fund which are not committed to new vessel construction.

(Sec. 4) Amends the Internal Revenue Code to set forth similar provisions.

(Sec. 5) Provides a three-year recovery period for the depreciation deduction on eligible passenger vessels.

(Sec. 6) Modifies requirements governing the deductibility of expenses related to an individual's attendance at conventions, seminars, or other meetings held on cruise ships as a business expense. Requires only the home port of such a ship (currently all ports) to be in the United States or a U.S. possession. Repeals the $2,000 limitation on the deductibility of such expenses. Reduces the number of reporting requirements for such deduction. Provides that for deduction purposes, certain interim documentation of a vessel shall be treated as registration in the United States.

(Sec. 7) Permits an employer to take a tax credit of ten percent of a travel reward (up to $200) paid to an employee for travel on domestic cruise ships.

Limits the deductible travel expenses incurred by a taxpayer for foreign cruise ship transportation to 90 percent of the otherwise allowable expenses.