Alaska woos cruise operators with tax cut

23rd Mar 2010
Alaska woos cruise operators with tax cut

Alaska has sought to bolster its position in the international cruise market, with Governor Sean Parnell suggesting a cut in the $50-per-passenger levy on visiting ships.

The Republican leader proposed earlier this week the tax be cut to $34.50; an idea he argues would boost the number of visitors during the coming cruise season.

“We’re going to make it more competitive to come to Alaska,” he told reporters in state capital Anchorage.

The $50-per-passenger charge was one of the products of a 2006 citizen initiative that imposed new taxes, fees and environmental regulations on the industry which dominates Alaska tourism.

Four dollars of the charge go directly into an environmental oversight program.


Into the Wind

However, the levy has proved unpopular with cruise lines, with a number – including Carnival Cruises and Holland America Line – cutting departures to the region.

In response, Governor Parnell reportedly offered to cut the tax at a meeting of international cruise line managing directors in Miami last week in exchange for a public promise of support from the cruise lines.

The Governor also sought assurances from industry associations they will drop a federal lawsuit filed against the tax.

Cutting the tax to $34.50 removes the 25 per cent portion which cannot be spent in Alaska port communities and is dedicated to spending on infrastructure projects in other parts of the state.

The cruise lines have been arguing in court those appropriations are illegal.

The passenger tax has generated roughly $38 million per year over the past few years, according to state records.


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