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Assembly clears first reading to raise single-purchase sales-tax cap to $5,000
Summary
On first reading the assembly approved sending a ballot question to voters that would raise the borough's single-purchase sales-tax cap from $1,200 to $5,000; supporters cited capturing visitor and local business revenue, while one member opposed.
The Petersburg Borough Assembly voted 6'to'1 on May 18 to advance Ordinance 20 26-10 on first reading, asking voters at the Oct. 6, 2026 election whether to raise the borough's single-purchase sales-tax cap from $1,200 to $5,000.
Vice Mayor Stan Greger, who sponsored the measure, said the change would capture visitor dollars and help the borough modernize a cap last changed decades ago: "It would capture, in particular, so many visitor dollars," he said, pointing to recent festival traffic.
Member Valentine, who said he works in tourism, also urged approval for a ballot measure that would keep the borough's cap competitive in Southeast Alaska. Finance staff said that eliminating or raising the cap would have produced substantially more taxable sales—for calendar year 2025 they estimated $25 million in purchases were exempted because of the cap and that removing any cap could have yielded about $1.5 million in additional revenue; raising the cap to $5,000 would capture a portion of that amount.
Member Newman opposed the first reading and noted prior voter rejections of similar measures; the roll-call vote on first reading was 6 in favor, 1 opposed.
What happens next: If the assembly passes later readings as required, the measure will appear on the October ballot for voter approval.
