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Commerce committee recommends Assembly consider sales tax on onboard cruise-ship purchases
Summary
The Haines Borough Ports and Harbors Advisory Committee recommended that the Assembly take up ordinance 25-10-723, which would clarify and authorize collection of Haines Borough sales tax on retail and service transactions made on board cruise vessels while the ship is in Haines. The committee carried the recommendation by voice vote and asked staff to gather implementation and legal details before the Assembly meeting.
The Haines Borough Ports and Harbors Advisory Committee on a voice vote recommended that the Assembly consider ordinance 25-10-723, which would expressly allow collection of the borough sales tax on retail and service transactions conducted on board cruise ships while they are in Haines.
Tourism director Reba told the committee the change is intended to align Haines with other Southeast Alaska ports and to make the borough’s code clearer. “If you’re going to the spa and getting a massage or getting your nails done, you would pay the Haines Borough sales tax for that,” Reba said, arguing the proposal is not a tax increase but a clarification of existing practice.
Committee members questioned the practical and competitive effects. One member raised implementation concerns: “If I was running the shop on the ship and I had to keep track of sales tax for every different port, that would drive me nuts,” which reflected a broader worry about administrative burden for ship retailers and potential marketing implications for Haines compared with neighboring ports.
Members also discussed the interaction with the existing head tax and whether raising or restructuring the head tax might be a simpler alternative. Some said the borough should gather data on net economic effects — whether additional local sales tax revenues would outweigh any potential loss of passengers or calls. The committee asked staff to provide examples from ports that have implemented similar rules, to summarize legal challenges other ports have faced, and to check with the Cruise Lines International Association (CLIA) for industry feedback.
After discussion, a member moved that the committee recommend the ordinance as presented and the motion carried by voice vote; the chair announced the motion carried unanimously. Staff will present the committee’s recommendation and the additional implementation information to the Assembly at its November 18 meeting.
