Cruise industry sues Alaskan town over shore tour tax as another throws out cruise caps

• CLIA, the body that represents cruise ship owners, is taking action claiming a tax on commission on tours is illegal.
• CLIA maintains that the tax will raise prices and violates existing law.
• Meanwhile, the town of Sitka has thrown out a bid to impose caps in cruise visitors by 70%.

An Alaskan town is once again under the threat of legal action for wanting to adjust the local laws regarding cruise ships in the town.

CLIA, the Cruise Lines International Association, has filed a lawsuit against the City and Borough of Skagway, a town with a population of 1212 people. which seeks tocharge tax on the commission on every cruise tour.

Skagway has traditionally charged a tax on tours that start out of the town, but it used to exempt cruise line commission fees.

Skagway has however changed this policy, and now wants to implement its sales tax across the entire cost of the tour, including the commission that cruise lines collect.

CLIA maintains the move goes against other laws and will increase the price of tours. It says that the tax is illegal, and breaks both Alaska law and is even unconstitutional. 

They have three main arguments. One is that the tax interferes with national business, and that the US constitution has stipulations that prevent local taxes from interfering with business that crosses state lines. 

Another argument is a risk of “double taxation”, and that the tax will put on a financial strain on cruise guests and Alaskan businesses.

Finally, CLIA is arguing that local taxes shouldn’t apply in situations where the booking of the tour didn’t happen in Skagway, for example if the tour was booked online or on the cruise ship.

Alaskan towns divided over cruise but most support it

Last year, Juneau held a vote on a proposal for “Ship Free Saturdays” to a vote, but the towns citizens defeated it.

It was claimed businesses and the cruise industry raised $500,000 for their campaign against the move, compared to the $380 raised by local citizens.

However, that doesn’t mean that Juneau citizens are against cruise in the town. 

Local residents were recently trying to file another petition, this time for a five-ship daily limit and annual visitor cap of 1.5 million passengers, as well as other daily visitor caps.

However, the petition didn’t get enough signatures to be put on the town’s municipal ballot. 

Therefore it appears the cause for limiting cruise is losing some steam in Juneau. 

Karla Hart, one of the people behind the petition said she believed it was simply the wrong solution to put forward and believes that’s why it didn’t resonate with people.

“In the conversations that I had with people, I don’t think that it’s the right initiative. I think that we need to regroup and refocus and take on the myriad of different pieces that are really adversely impacting our lives.”

A crucial issue moving forward for Juneau will be the new port that Royal Caribbean are building.

Another Alaskan town votes against a cruise cap

The town of Sitka in Alaska, with a population of around 8200 people, has voted down a cap on cruising by a large margin, reported to be as much as 70%.

The proposal would have meant a new daily cap of 4500 passengers and an annual cap of 300,000 passengers per season. 

The town has been seeing debates between those who feel that traffic congestion and pollution is negatively affecting local life, and others who feel that placing any limits on cruise can put local businesses and tourism at risk.

Early voter turnout has been strong, showing that the issue is clearly important to locals.

Nearly 3,000 town residents voted in the election, believed to be the third largest turnout for any municipal vote in Sitka since 2018.

Sitka Sound Cruise Terminal Owner Chris McGraw told a local radio station: “I think it shows that the community understands the benefits of cruise tourism and that the proposed ballot initiative wasn’t the right answer at this time,” he said.