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Press Release

Cruise Industry Lawsuit Dismissed with Prejudice

July 1, 2010

Anchorage, Alaska - Attorney General Dan Sullivan today announced that the Alaska Cruise Association (ACA) has officially terminated its lawsuit against the state's excise tax on cruise ship passengers.

A stipulation filed with the U.S. District Court for Alaska dismisses with prejudice the lawsuit that was filed against the state last September.  In a settlement agreement reached between the state and ACA in April, ACA agreed to dismiss its lawsuit if the governor signed into law a bill passed by the Legislature that reduced the commercial passenger excise tax from $46 per passenger to $34.50 and also provided an offset for passenger taxes paid to local governments. 

On June 24, Governor Parnell signed into law Senate Bill 312, passed by the Legislature in April, that contained the elements necessary to trigger dismissal of ACA's lawsuit. The stipulation filed today permanently resolves the legal issues.

"The issues in this case were factually and legally complicated, and without this settlement this case could have been tied up in federal court for years to come," Sullivan said.   "Beyond that, the tax cut introduced by the governor and enacted by the Legislature should spur economic growth, particularly among small businesses that will benefit from increased tourism traffic."

SB 312 also requires a review and report to the Legislature every three years regarding passenger visits, use of tax proceeds and community needs, so that the Legislature has current information on the industry and visitor trends.

"This report will provide the Legislature with the information they need to ensure that this passenger excise tax remains commensurate with the costs of safely and efficiently hosting passengers in Alaska," said Assistant Attorney General Chris Poag, who led the state effort to defend against the lawsuit and to negotiate the settlement.

"I'd like to specifically thank Chris Poag, Mike Barnhill and their colleagues in the Department of Law who have worked tirelessly on this matter for months and who have provided a great public service for the citizens of Alaska," Sullivan said.

For more information, contact Assistant Attorneys General Chris Poag or Mike Barnhill, (907)465-3600.

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