Alaska Cuts Cruise Passenger Tax

Alaska Governor Sean Parnell signed legislation Thursday that will reduce the $46-a-head tax on cruise passengers, to $34.50-a-head. The cruise industry, a major employer in the state, had heavy criticism for the high tax, enacted after a state ballot in 2006. This tax along with other new state regulations and other growing taxes caused the industry to pull three ships out of Alaska this year; they are all sailing in Europe this summer.

The new tax break is not expected to have an impact until the 2012 season as schedules for this year and 2011 are already set. Also included in the legislation is an up to $15-a-head savings for ships that stop in Juneau and Ketchikan, a stop that most cruises already make.

In September, an association representing major cruise lines in Alaska filed a suit against the state, claiming the head tax violated two sections of the U.S. Constitution as well as federal law. With the new reduction, that suit will be dropped.