The Juneau Assembly is moving forward with a plan to ask voters this fall whether to implement a new seasonal sales tax system next year.
The proposed change is meant to capitalize on the 1.7 million cruise ship visitors that come to town each summer. The new structure would raise sales taxes in the summer months and lower them in the winter.
Assembly members voted at a finance committee meeting on Wednesday to take public comment on the proposal later this month before deciding whether to put it on the October municipal ballot.
Assembly member Alicia Hughes-Skandijs said she thinks the idea will be well-received by many in the community.
“In what is an increasingly seasonal economy, it makes sense to capture maximum yield when you have all these folks in town,” she said.
Seasonal tax structures aren’t uncommon in tourism towns in the state. Other Southeast Alaska towns like Ketchikan, Sitka and Skagway have similar seasonal tax structures in place already.
Right now, Juneau levies a 5% local sales tax. 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 approve 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.
Members decided on Wednesday to remove a part of the original proposal that would have used the additional revenue from the new system to offset the cost of removing local sales tax on food and utilities. That’s because it would have basically mirrored another ballot measure that’s going before voters this fall.
Earlier this month, an advocacy group called the Affordable Juneau Coalition successfully gathered enough signatures to put two questions on the local ballot this fall. Both aim to lower the cost of living for residents, including whether to remove local sales tax on food and utilities.
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