2016-01-19                     Senate Journal                      Page 1602
SB 136                                                                                                                        
SENATE BILL NO. 136 BY THE SENATE RULES COMMITTEE                                                                               
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
                                                                                                                                
      "An Act requiring electronic submission of a tax return or                                                                
      report with the Department of Revenue; repealing the tax                                                                  
      reduction for local levies for the commercial vessel                                                                      
      passenger excise tax; amending the definition of 'voyage';                                                                
      and providing for an effective date."                                                                                     
                                                                                                                                
was read the first time and referred to the Labor and Commerce and                                                              
Finance Committees.                                                                                                             
                                                                                                                                
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, Department of Revenue                                                                                       
                                                                                                                                
Governor's transmittal letter dated January 15:                                                                                 
                                                                                                                                
Dear President Meyer:                                                                                                           
                                                                                                                                
Under the authority of Article III, Section 18 of the Alaska                                                                    
Constitution, I am transmitting a bill relating to the commercial vessel                                                        
passenger excise tax.                                                                                                           
                                                                                                                                

2016-01-19                     Senate Journal                      Page 1603
Under the commercial vessel passenger excise tax, all commercial                                                                
passengers pay $34.50, irrespective of what ports they visit in Alaska,                                                         
because AS 43.52.255 provides an offset to the state passenger tax to                                                           
passengers whose voyages include one or more stops in a municipality                                                            
that collects its own local passenger tax. The offset is limited to local                                                       
passenger taxes that were in effect on December 17, 2007. In essence,                                                           
the result is that passengers who stop at Juneau or Ketchikan pay a                                                             
lower statewide passenger tax because they are paying one or more                                                               
qualified passenger levies. My bill proposes to repeal AS 43.52.255,                                                            
which reduces the state tax on cruise ship passengers by the amount                                                             
the passenger pays in local borough taxes. This change would result in                                                          
additional revenue of approximately $15,000,000 annually.                                                                       
                                                                                                                                
In addition, the bill would amend the definition of "voyage" to remove                                                          
language requiring that a vessel be in the state for 72 hours to be liable                                                      
for the tax. The language, added in 2010, has generated some                                                                    
unintended consequences of companies attempting to avoid paying the                                                             
commercial excise passenger vessel tax through route adjustments.                                                               
                                                                                                                                
To increase administrative efficiency for the Department of Revenue                                                             
and state taxpayers, the bill would require the electronic submission of                                                        
tax returns with an exemption available upon request.                                                                           
                                                                                                                                
The bill is an integral component of the New Sustainable Alaska Plan                                                            
to provide a balanced and sustainable budget for Alaska's long-term                                                             
fiscal stability.                                                                                                               
                                                                                                                                
I urge your prompt and favorable action on this measure.                                                                        
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Bill Walker                                                                                                                     
Governor