Juneau committee weighs seasonal sales tax, visitor-tour tax rules and permit-fee options

The Assembly Finance Committee on April 16 received an overview of possible visitor-industry revenue strategies, including clarifications about sales tax on visitor tours, potential permit and fee changes, and several illustrative seasonal sales-tax scenarios intended to shift some tax burden from year-round residents to summer visitors.

Director Flick told the committee staff had prepared scenarios and clarifications so members could “seed ideas” and ask follow-up questions. On visitor tours she said operators must estimate the portion of a ticket attributable to activity inside the City and Borough of Juneau and remit sales tax on that portion; some operators simplify administration by collecting tax on the full ticket price. Flick said federal rules restrict taxation of transportation itself — “we're not to collect sales tax on transportation” — but activities performed inside borough limits (for example scenic operations at a site inside the borough) can be taxable.

Flick also described the scale of sales-tax revenue and potential targets for exemptions. She said roughly $5–$6 million of the current sales tax can be attributed to food sales and another $5–$6 million to utilities (water, wastewater, electricity, heating oil, waste disposal). She gave context on the city’s 5% sales-tax regime and temporary/expiring portions: “In FY '24, 1 percent of a 1% sales tax was about $13,000,000,” and CBJ currently uses a mix of permanent and temporary sales-tax percentages for operations and capital projects.

Staff provided example seasonal models (using calendar-year 2024 data) that illustrate how changes in winter/summer rates and exemptions would shift revenue. Examples in the memo show visitor-contributed sales-tax figures under different regimes: under a large seasonal differential (summer 7.25% vs. winter 1%) visitors could be shown contributing about $26.6 million with an $8.2 million shift from residents to visitors; smaller differentials would produce smaller shifts. Flick noted these scenarios are illustrative and that the team did not model behavioral changes (how customers might alter purchases in response to tax differences).

Committee members pressed staff on legal and administrative questions. Assemblymember Bryson said some platforms (a peer-to-peer car service example was raised) do not remit tax to merchants, and said the city’s current practice asking the merchant to remit a fixed share can be inconsistent with operators’ realities. Flick said she would consult the law department about whether the city could collect tax on transactions that take place partially outside borough limits and follow up on exemptions and collection enforcement. Several members asked whether additional auditing capacity could pay for itself; Flick said auditing and delinquency work “likely could” recover revenue but that staffing/time are limited.

On policy preferences, members expressed a range of views. Some favored a modest seasonal uplift to protect small business (Bryson suggested a small, simple summer increase); others supported a larger seasonal swing combined with targeted exemptions for basic food and utilities to reduce cost-of-living impacts on residents (Atkinson, Steininger, Kelly, and others expressed interest in exemptions for food and utilities). Multiple members said they want more granular modeling (including comparisons with other Southeast Alaska municipalities that have implemented seasonal taxes) before moving forward.

The committee did not take action. Staff said they will compile follow-up items, including legal analysis on taxing tours that cross jurisdictional lines, examples and outcomes from other municipalities with seasonal taxes, additional mill-rate and revenue modeling and more detailed impacts by business sector.

No vote was taken; members asked staff to return with refined numbers, legal guidance and comparisons ahead of future budget and ballot discussions.