|Photo by Freeimages.com/Abby Lowell|
Cruise Lines International Association (CLIA) and its Alaska affiliate are challenging the legality of head tax fees by cruise passengers in Juneau, the Fairbanks Daily News-Miner reports. Juneau charges a $5 entry fee per cruise ship passenger and a $3 port development fee, which are collected by cruise lines and passed on to the city. CLIA said it estimates Juneau has collected over $35 million in entry fees over the past four years.
The lawsuit contends that the city has used part of the proceeds from those fees to fund projects that do not directly benefit cruise ship passengers, which would violate federal restrictions on entry fee taxes. At issue are a proposed $10 million project to add a 50-foot whale sculpture set in an infinity pool, along with other upgrades, to the city's waterfront more than a mile from the cruise dock, as well as $22 million in government operating expenses, $2 million for city bus services and $447,000 for upgrades to a private dock that cruise ships and cruise passengers can't use.
In a statement provided to Travel Agent, CLIA Alaska said that the legal challenge is intended to resolve a disagreement between the industry and Juneau regarding the interpretation of the U.S. Constitution and federal restrictions on the use of passenger entry fee taxes.
“Cruise line passengers currently pay approximately 18-20 percent of all sales taxes generated in Juneau. The industry certainly does not have an issue with paying taxes or contributing to local services,” said John Binkley, president of CLIA Alaska, in the statement. “However, the U.S. Constitution is clear that per passenger entry fees are prohibited unless they meet a very narrow list of exceptions, none of which applies to this situation. For example, Juneau’s $10 million artificial island, whale sculpture foundation and bridge park project fall well beyond those legal limits.”