An ordinance to increase the sales-tax cap on single-item purchases from $1,000 to $2,000 was introduced Monday by the Ketchikan Gateway Borough Assembly.
The measure will come back to the assembly for a public hearing and second vote on Aug. 19th.
If adopted, single items will be taxed only on the first $2,000 of the purchase price. Rent would be exempt from the increase.
Assembly Member Judith McQuerry notes that the City of Ketchikan also needs to be on board with the change. She said somebody had to go first, though, and she’s confident the city will follow suit.
“I have spoken personally to a number of city council members and they said, ‘If the borough passes this, in all likelihood, the city will also,’” she said. “I think that we need to step up and say, ‘Yeah. It’s time.’”
The community’s sales tax cap of $1,000 was set in 1978. There have been numerous failed attempts in recent years to increase it. Local business owners regularly object to the change, saying it will affect their ability to compete.
Paul Jarvi, owner of Julie’s Fine Jewelry and Gifts. He was the only member of the public to address the tax-cap issue during Monday’s meeting. He objected to the proposed increase, arguing that it’s already challenging for local businesses to make a profit.
“Sometimes when you negotiate a high-end sale, it comes down to the sales tax and how much is that going to be,” he said. “And is that going to be the pushing point, whether the sale is made or not?”
While the vote to introduce the ordinance was unanimous, Assembly Member Sue Pickrell said she’s not sure whether she’ll vote to adopt the new tax cap. She encouraged business owners and other members of the public to provide input before or during the Aug. 19th meeting.
Also Monday, the assembly unanimously approved a rezone of part of Surprise Beach Court off South Tongass Highway as a Planned Unit Development. The rezone will allow developer Harlan Heaton to build condos and small homes on a 5-acre lot.
The assembly also voted unanimously to introduce an ordinance establishing the Old Dairy Road Service Area. A public hearing and second vote will take place on Aug. 19th. If adopted by the assembly, a measure will be placed on the Oct. 1st local ballot for residents of that area to ratify the new service area.
In other matters, the assembly moved forward with a plan to allow food trucks in the Ketchikan area. The motion was proposed by Assembly Member AJ Pierce.
Assembly Member Judith McQuerry was the only “no” vote. She said the borough needs to support local brick-and-mortar restaurants.
Pierce said allowing food trucks gives entrepreneurs a chance to get started.
“I understand they would not necessarily be the staple, brick-and-mortar business, but our locals would have an opportunity for more affordable economic development by having the opportunity to have a start-up business that does not require heavy rent, and utilities and all of those overhead expenses for young folks to begin a business,” she said.
The motion passed 6-1. That starts a process that includes discussion between borough and city officials, and rewording of current regulations regarding mobile buildings.
Also Monday, Assistant Borough Manager Deanna Thomas told the assembly that the borough-maintained restrooms at Rotary Beach are closed. Thomas said a vehicle damaged an Alaska Department of Transportation-owned light pole in the parking area, which affected power to the facility.
Thomas said crews are waiting for parts before they can repair the problem.
