Carnival Corporation's CEO Warns Alaska To Expect Lawsuit Soon

The cruise industry is on the verge of filing a lawsuit against the state of Alaska over the $50 per passenger cruise tax Alaska's voters approved three years ago.

"Our intention is to file the litigation relatively soon," Micky Arison, Carnival's chairman and CEO said this week. "I think we've pretty much exhausted all other outlets."

Arison said the industry always has maintained the tax is "illegal and unconstitutional" but has held off filing suit while it tried to reason with Alaskan officials. The days of trying to talk it out peacefully, however, are coming to an end, he says.

"We tried over several legislative sessions to convince the powers that be (it was illegal) and that it also was not in the interest of Alaska economically, (but) we have not been successful," Arison noted.

Arison had some harsh words for Alaska governor Sarah Palin, noting "she doesn't seem to want to focus, (nor does) anyone else in Alaska . . . (Palin) needs to concentrate on Alaska and stop running for president."

Arison added that this month's U.S. Supreme Court decision striking down a tax on oil tankers in Valdez, Alaska, supports the company's position that the cruise tax violates the "tonnage clause" of the U.S. Constitution.

"It came down exactly the way we anticipated, (saying) that states do not have the right to charge taxes on ships in that manner," he says.

Carnival and other cruise operators say that the $50-per-passenger tax is partly responsible for a drop in demand for Alaska cruises over the past year. Citing the falling demand, many lines in recent months have announced plans to reduce cruise capacity in Alaska for 2010.