Juneau voters may be asked whether to implement a new seasonal sales tax system next year to take advantage of the roughly 1.7 million summer cruise ship tourism visitors that come to town annually.
The proposal would raise sales taxes in the summer months and lower them in the winter.
Some Assembly members say the change would allow residents to exempt food and utilities from local taxes while keeping the city’s overall sales tax revenue mostly intact.
Juneau currently charges 5% in local sales taxes. That’s made up of both permanent and temporary taxes that help pay for general government costs, some specific voter-approved projects and community priorities.
But, if voters pass the proposed seasonal sales tax system, consumers would instead pay a 7.5% tax in the summer from April through September and a 3.5% tax in the winter from October through March.
Neil Steininger proposed the new system alongside two other Assembly members. At an Assembly finance committee on Wednesday, he said it will help lower the cost of living for Juneauites, while also taking greater advantage of the number of tourists who come to town.
“That just makes the most sense, setting the seasons as winter and summer as the most kind of logical for what we’re trying to accomplish here, which is shifting tax burden between year-round residents and summer visitors,” he said.
Steininger said boosting the amount consumers pay in taxes during the summer means the city would take in more money during that period. Then, that extra money could be used to offset the cost of exempting food and utilities from taxes.
Other Southeast Alaska towns like Ketchikan, Sitka and Skagway have similar seasonal sales tax structures in place already.
The proposal comes as the Assembly also looks to increase residential water and sewer rates by 5% annually over the next five years to fund critical repairs to the city’s water and sewer systems.
The proposed food tax exemption would be applied to items under the same definition as the Supplemental Nutrition Assistance Program, better known as SNAP or food stamps. But, unlike SNAP, anyone would be eligible for the tax exemption — regardless of income. The Assembly considered removing sales tax on food in 2022, but ultimately decided against it.
Many economists say that taxes on food hit low-income people the hardest. Assembly member Alicia Hughes-Skandijs agreed.
“At the end of the day, when someone’s paying their grocery bill and their utility bills, those are just the real cost of living expenses — that’s what it costs to exist in the community,” she said.
But not everyone is on board with the idea. Assembly member Wade Bryson was concerned it would negatively impact local business owners like himself.
“One business has many things that service it, and if you raise the cost of every single one of those services, you get a greater increase in cost on that business,” he said.
He found a particular issue with how large the tax jump between the seasons would be.
“We’re going to mess up the tax rate. We’re going to make it complicated. We’re going to make a burden on the local businesses,” he said. “I don’t see how raising the cost for 99% of our businesses in our community doesn’t have a negative consequence for the cost of living.”
Even if the Assembly doesn’t move forward with bringing the seasonal sales tax question to voters, a new Juneau advocacy group called the Affordable Juneau Coalition is currently collecting signatures to exempt essential food and residential utilities from sales tax, among other measures to lower the cost of living.
But that proposal doesn’t have a mechanism for recouping that loss in sales tax revenue to the city’s budget, meaning the city would likely have to cut back on spending to make up for the lost revenue.
The proposed seasonal rates aren’t final. The Assembly has until late July to take public testimony and decide whether to put the question on the ballot for voters.
Copyright 2025 KTOO