term modified taxable income has the meaning given such term by section 59A(c)(1). . (e) Effective date The amendments made by this section shall apply to base erosion payments (as defined in section 59A(d) of the Internal Revenue Code of 1986, as added by this section) paid or accrued in taxable years beginning after December 31, 2017. III Other provisions 14501. Taxation of passenger cruise gross income of foreign corporations and nonresident alien individuals (a) In general Section 882 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection: (f) Treatment of passenger cruise gross income (1) In general For purposes of this title, the effectively connected passenger cruise gross income of a foreign corporation shall be treated as gross income which is effectively connected with the conduct of a trade or business in the United States. (2) Effectively connected passenger cruise gross income For purposes of this subsection, the term effectively connected passenger cruise gross income means, with respect to the operation of any ship in a covered voyage, the United States territorial waters percentage of the gross income (determined without regard to section 883(a)(1)) derived from such operation, including any amount received with respect to the provision of any on- or off-board activities, services, or sales, with respect to passengers incidental to such operation (or with respect to any agreement with any person with respect to the provision of any such activities, services, or sales). (3) United States territorial waters percentage For purposes of this subsection— (A) In general The term United States territorial waters percentage means, with respect to the operation of any ship in any covered voyage, the ratio (expressed as a percentage) of— (i) the number of days during such voyage such ship was operated in the territorial waters of the United States, divided by (ii) the total number of days of such voyage. (B) Calendar day rule If a