Although there is no state sales tax in Alaska, local governments are permitted to impose local sales tax. Many do, including Homer, Seward, and the Kenai Peninsula Borough. To date, Anchorage has remained staunchly anti-sales tax; residents have repeatedly voted against proposed local taxes, most recently in 2006 and again in 2011. That may soon change.
Anchorage Assemblyman Bill Evans has been working on a city sales tax proposal for more than a year. He argues that a 4% sales tax on many currently exempt goods and services can raise necessary revenue and help offset property taxes, which many in Anchorage believe are too high. According to Evans, a local sales tax could generate $100 million annually (KTUU).
Sales tax would not apply to child and adult care services, food for home consumption, or prescription medicines. Medical and legal services would also remain tax free, as would utilities and heating fuels. In addition, the sales tax would be capped at $200 (meaning no more than $200 would be due on a single sales transaction).
Evans hopes to place a proposal for the 4% sales tax on the April 2017 ballot, but it must first be approved by the Assembly. If it makes the ballot, at least 60% of voters must approve it. A public hearing on the issue is set for January 20, 2017 (additional information).
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