Sullivan kills cruise tax, Murkowski adds tax help for ANCs

Photo: Carrie Braes

Alaska’s two U.S. senators not only helped Republicans pass their tax cuts early Saturday. They made a pair of 11th-hour additions: one kills a new tax on the cruise industry, another helps Alaska Native Corporations.

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Sen. Dan Sullivan offered the cruise ship amendment. It erased a section of the bill that would have taxed foreign cruise lines for the time they spend in U.S. waters. The tax would have raised an estimated $70 million a year.

John Binkley represents the industry as president of Cruise Lines International Association Alaska. He says the tax would have specifically hurt Alaska routes because they spend so much of their time in U.S. waters.

“We were concerned when we saw that come up in the Senate version,” Binkley said. “And so we contacted Sen. Sullivan, his office, and also Sen. Murkowski’s office.”

Sullivan’s spokesman says the senator had already noticed the tax in the bill and quickly moved to ditch it, to help Alaska communities that benefit from cruise ship visitors.

Sen. Lisa Murkowski added her own last-minute amendment to the bill. It provides favorable tax treatment for Alaska Native Corporations that put land or other assets into Alaska Native Settlement Trusts. Congress created these trusts in 1988, in part to allow Native Corporations to help “after borns” – Alaska Natives born after the 1971 settlement act — too late to be allotted shares in the corporations.

Old Harbor Native Corporation CEO Carl Marrs testified at a U.S. Senate hearing last month on the need to change tax law for settlement trusts. He said, by law, a corporation’s duty is to its shareholders.

“We need a mechanism to be able to move assets over to take care of the whole (community), not just those born before 1971,” Marrs said.

Marrs said the tax changes would, among other things, allow a corporation to put pre-tax funds in a settlement trust. The trust would be taxed on the income, but the rate is much lower. Marrs described it as a way a community’s corporation can help its tribe.

“I think corporations are now realizing our job should be there supporting the tribal efforts, because those are the important programs to our indigenous people,” Marrs, a former CEO of Cook Inlet Region, Inc, said.

Friday night, the cruise-ship and Native corporation amendments appeared on a list of 30 changes Republicans had decided to make. The list emerged while Democrats were on the Senate floor complaining they still had not seen the final language of the tax-cut bill. Democratic Minority Leader Chuck Schumer groused that his side had to get the list from lobbyists.

“My Republican friends allowed lobbyists to see amendments, and likely the text of this bill, before their fellow U.S. senators,” Schumer said.

The tax bill, including a provision to open the Arctic National Wildlife Refuge to oil drilling, will be sent next to a conference committee with the House version so lawmakers can write the final bill.