Cruise group sues Alaska over $50 passenger tax

By Johanna Jainchill

The Alaska Cruise Association has sued the Alaska Department of Revenue, seeking the repeal of a head tax on cruise passengers.

The ACA claims that the tax makes visitors pay for Alaska projects that are not related to cruise ship travel.

The ACA said it seeks relief from the head tax portion of Ballot Measure No. 2, also known as the Cruise Ship Initiative, which was voted into law in 2007 by Alaska citizens.

Alaska levies a $50 tax ($46 in head taxes and a $4 fee to finance an ocean ranger program) on each cruise passenger.

The suit says that the tax violates a federal law preventing states from charging marine visitors for local expenses and for discriminating against interstate commerce. The ACA filed the complaint with the U.S. District Court in Alaska.

The ACA claims that a portion of the cruise tax revenue had been earmarked for localities that are not ports of call and to fund future projects that provide no benefits to passengers.

"The ACA therefore brings this action to prevent the continued collection of this unlawful entry fee, which violates fundamental precepts of federalism," the suit says.

A copy of the complaint is at www.akcruise.org.

The ACA, headed by former Alaska gubernatorial candidate John Binkley, is the cruise industry's lobbying arm in Alaska. Most major cruise lines are ACA members.

Carnival Corp. CEO Micky Arison said in June that Alaska should expect the cruise industry to use litigation to repeal the initiative.

The measure has become prominent in the news this summer as cruise lines have begun removing ships from Alaska.

In 2010, 140,000 fewer passengers are expected to take Alaska cruises as a result of capacity cuts by Princess, Holland America Line, Royal Caribbean, Norwegian Cruise Line and Cruise West.

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