Legislature(2015 - 2016)

2016-01-19 House Journal

Full Journal pdf

2016-01-19                     House Journal                      Page 1445
HB 252                                                                                                                        
HOUSE BILL NO. 252 by the House 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                                                        
was read the first time and referred to the Labor & Commerce and                                                                
Finance Committees.                                                                                                             
The following fiscal note(s) apply:                                                                                             
1.  Fiscal, Dept. of Revenue                                                                                                    
The Governor's transmittal letter dated January 15, 2016 follows:                                                               
"Dear Speaker Chenault:                                                                                                         
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.                                                                                                           
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                                                               

2016-01-19                     House Journal                      Page 1446
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.                                                                        
Bill Walker