Cruising battles Alaska tax
THE CRUISE industry has filed suit against Alaska’s government, seeking to overturn the state’s tax of $46 per passenger.
According to court documents made public on Friday, the Alaska Cruise Association (representing all the major lines) alleges that Alaska Revenue Commissioner Patrick Galvin is “blatantly violating” the tonnage clause of the US Constitution by collecting the fees. That clause limits a state’s authority to impose fees measured by vessel capacity for the privilege on using state waters, unless fees defray costs of servicing the charged vessels.
The suit noted that only larger cruise ships (250 passengers or more) have been charged since collections began in 2007, while revenues have been used for “projects that do not have any relation to services provided to large cruise ships who paid the fee”.
In June, the US Supreme Court ruled on a similar argument by Polar Tankers, finding that the city of Valdez violated the tonnage clause with its taxation of the US-flag carrier.
Cruise lines have been unable to pass the hefty cost of the Alaska tax along to consumers, given sharply lower demand. Several lines are cutting their Alaska capacity beginning next year.