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Alaska Governor Signs Bill to Cut Cruise Ship Head Tax

Alaska Gov. Sean Parnell signed legislation lowering the state's tax on cruise passengers - settling an industry lawsuit over the fee, and hoping to bring more ships back to Alaska. With Parnell's signature, the head tax will drop from $46 to $34.50, with deeper offsets for ships stopping in at least one of two popular ports, Juneau and Ketchikan. The tax was created by a voter referendum in 2006, with supporters saying it would help to cover the cost of infrastructure needed for large ships coming to port.

The Alaska Cruise Association said the $46 head tax, and the state regulatory climate, contributed to the loss of interest by the cruise industry. Three fewer ships - an estimated 140,000 passengers - came to Alaska this season. The cruise lines said the tax was unconstitutional and sued the state. The legislation signed Thursday calls for the cruise association to drop the suit.

Cruise lines have already made their Alaska cruise schedules for 2011 and three lines have announced plans to bring in new ships. The 2012 schedule should be determined before the end of the year and it is believed the number of ships will increase, but another significant factor is the individual port fees charged by each stop most cruise ships make.