A new taxation structure for tours in Skagway has prompted CLIA to sue the Alaska borough.
Skagway now taxes the full price that cruise lines charge their passengers for shore excursions (including the cruise line's commission), when before it taxed the excursion's base price only. Skagway's assembly passed the tax ordinance in December, and CLIA sued on behalf of cruise lines on May 8.
In the lawsuit, CLIA argues that the new tax is "duplicative."
"The cruise industry has been a long-time partner and vital contributor to Skagway, creating hundreds of jobs and supporting countless small businesses," a CLIA spokesperson said. "Through close collaboration, taxes and fees, we have cultivated a mutually beneficial relationship that betters both the community and the industry. However, we oppose provisions of Ordinance No. 24-12 that violate the U.S. Constitution and Alaska state law by imposing new and duplicative taxes on shore excursions sold by cruise lines."
On its website, Skagway says a million cruise passengers visit Skagway every year.
CLIA has threatened similar litigation over a new state law in Hawaii that introduces an 11% tax on cruise ships when they dock.
In both instances, the cruise industry has argued that the legislation violates the U.S. Constitution's Tonnage Clause, which says states can't tax ship tonnage without congressional approval.
Travel Weekly has asked the borough of Skagway for comment.