Petersburg voters could be asked a sales tax question on October’s municipal ballot. The borough assembly on June 1 took another step in getting the issue to voters.
The question is whether the single-purchase sales tax cap should increase. Currently, any local purchases above $1,200 are tax-exempt. The borough is asking for the cap to be raised to $5,000. This would raise the maximum sales tax collected per transaction from $72 to $300.
Although the assembly approved the change for a second time, opinions varied.
“Everybody wants a tax break,” said Assembly member Bob Martin. “Why should some people get a tax break and some people don’t?”
He said the current sales tax cap amount is outdated and supported the increase. The cap was established in 1959 and has been adjusted only once since then. The borough says it’s the lowest cap among major towns in Southeast.
And that was a sticking point for Vice Mayor Jeigh Stanton Gregor.
“We are so grossly far below either communities that don’t have one or have a much higher one, even if the voters do approve this, it’ll be three times lower at minimum in Juneau,” he said. “So, I’ll be voting yes to put this on the ballot.”
But assembly member Scott Newman thought otherwise.
“I think this is a step in the wrong direction,” Newman said. “I just envision commercial fishermen, every time they go to the fuel dock, being taxed additionally on fuel that is exorbitantly priced, that’s going to affect their ability to run around, look for fish, it’s going to affect their bottom line. We have declining fishing revenues, so it’s kind of like we’re, you know, squeezing blood from a turnip on these poor guys.”
According to the borough, a lot of the exempt sale purchases are from the visitor industry. But Assembly member Rob Schwartz pushed back on that, agreeing with Newman that raising the cap would affect locals the most.
“It doesn’t matter what business, whether it’s fishing gear or equipment or machinery or fuel or whatever it is, the burden of this is going to fall on the local businesses in town, not so much the visitors to town,” Schwartz said.
Assembly member Jeff Meucci said revisiting the sales tax cap is long overdue, and voters should weigh in.
The assembly approved the motion to proceed to a third and final reading by a 5-1 vote, with Scott Newman the only no vote. James Valentine was not at the meeting.
If the assembly approves the question a final time on June 15, it will be in front of voters this fall.
