Juneau groceries to remain taxable
- Jun 29, 2016 | Gail Cole
Should the local sales tax on grocery items be eliminated or reduced in Juneau, Alaska? If so, should the local tax rate be increased to guarantee revenue neutrality? The City and Borough of Juneau (CBJ) has been deliberating these questions for weeks, and on June 27, it decided to keep sales tax as it is.
“Quit complicating things”
Feedback from grocery retailers was one reason the Assembly decided against any sales tax changes. A senior sales tax exemption was narrowed beginning January 1, 2016, and more than one store told the CBJ it “needs to quit complicating things for merchants and the community.” They said it was costly to change their point of sale (POS) systems at the start of the year and additional changes would mean additional costs.
Other stores said that if rates were to change, “there was a chance that customers would need to separate their carts by tax rate” until the POS systems could be updated. That would be fun.
A stable source of revenue
Retailer complaints aside, the CBJ Sales Tax Office spoke of a need to maintain stable sources of sales tax revenue: “Removing these stable revenue sources … would make CNJ more reliant on less stable categories of sales such as sales in the tourism industry and goods that could also be purchased online, tax free.”
Had the Juneau Assembly approved the motion to increase the local sales tax rate by 1% and eliminate the tax on groceries, the issue would have been decided by a vote of the people this fall. As it is, the people will be asked to vote on the following:
- Extending a temporary 3% sales tax for another five years
- Extending a temporary 3% sales tax permanently
- Increasing the sales tax on marijuana products from 5% to 8%.
Several members of the Assembly and Mayor Ken Koelsch have voiced concerns that having three sales tax measures on one ballot will confuse voters. Others defended the intelligence of the electorate: “I just don’t believe they’ll have a hard time with three questions. … They’re not a hard three questions” (Juneau Empire).
Additional information is available in the June 27 Committee of the Whole Agenda.
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