Legislature(2001 - 2002)
2002-02-13 House JournalFull Journal pdf
2002-02-13 House Journal Page 2234 HB 412 HOUSE BILL NO. 412 by the House Rules Committee by request of the Governor, entitled: "An Act relating to taxes regarding certain commercial passenger vessels operating in the state; relating to apportionment of business income; and providing for an effective date." was read the first time and referred to the Transportation, State Affairs, and Finance Committees. The following fiscal note(s) apply: 1. Fiscal, Dept. of Revenue The Governor's transmittal letter dated February 11, 2002, appears below: "Dear Speaker Porter: The cruise ship tax I propose in this legislation is part of a three-year sustainable budget plan designed to help fill Alaska's $1.2 billion budget gap. Failure to act this year to address this gap threatens Alaska's economic good health and the jobs Alaska's families depend on. 2002-02-13 House Journal Page 2235 This cruise ship tax is part of my year-one proposal to raise $400 million in new revenues in each of the coming three years. The other revenue elements in this first year are a reinstatement of a tax on income earned in Alaska and an increase in Alaska's tax on alcohol. Every year Alaska welcomes more than 600,000 visitors to our state to tour Alaska's pristine waters on cruise ships. Our visitors enjoy the amenities we offer: clean air and water, a safe and healthy setting, and a supportive business environment. The vast majority of the companies operating cruise ships we welcome here pay no tax to Alaska, to any other state, or to the federal government on their income from cruise ship operations. A tax based on the number of cruise ship passengers imposes the least administrative burden on the industry. A small tax on visitors who stay overnight on a cruise ship is a reasonable way for a state to recoup some of its expense in maintaining the infrastructure that helps serve the visitor industry. The tax proposed in this bill, $30 per visitor who stays overnight in Alaska on a passenger vessel, is comparable to a hotel bed tax. Indeed, it is a smaller percentage than the bed tax charged per night in many visitor destinations. This tax would apply to all passengers who stay overnight in Alaska on commercial vessels. It exempts government-owned vessels, such as the state ferries and military vessels, because these vessels are in a different industry and the government already contributes to the state infrastructure. It does not apply to vessels with less than 12 berths because these vessels are not in the cruise industry. In sum, it is a broad-based nondiscriminatory tax. Some oppose a passenger tax because they argue it is unconstitutional, yet my Administration is confident this measure is constitutional. I have included a fair share protection provision in the bill, however, that would impose a corporate income tax on the same vessels should the passenger tax be struck down. 2002-02-13 House Journal Page 2236 I urge your prompt and favorable consideration of this legislation. Sincerely, /s/ Tony Knowles Governor"