Tax legislation would boost revenue for fishing towns

Northern Southeast towns could gain additional $98,000

Posted: Friday, January 21, 2005

More money could go to some Alaska fishing communities and a little less could go to others under a proposed bill to redistribute revenue from the state's raw fish tax.

Which communities will benefit, which will lose and by what margins remain unclear. But if passed, the tax revision could reap an additional $98,000 for northern Southeast Alaska communities as a whole, based on 2003 tax returns, according to an Alaska Department of Revenue analysis.

The measure, proposed by Rep. Paul Seaton, R-Homer, is an effort to overcome a tax definition that prevents fishing communities from reeling in raw fish tax revenue from fish landed in their ports but processed out of state.

Ports in Homer, Juneau and Wrangell handle a large amount of halibut, troll-caught salmon and black cod that is considered unprocessed by the Department of Revenue - in most cases because the fish is shipped head-on or unfrozen.

"The community loses its tax base," Seaton said at a House Resources Committee hearing on Thursday. The committee is holding the bill for additional analysis.

Communities like Homer, Juneau and Wrangell are among the likeliest to see a major benefit from the proposed bill.

In terms of new revenue, "I'd say this is a winner for Juneau, without having the specific information," said Bill Rolfzen, a local government specialist with the Alaska Department of Commerce, Community and Economic Development who administers its shared fishery business tax program.

Rolfzen said it is nearly impossible to estimate the potential impact on tax revenue for many cities, due to confidentiality requirements at the Department of Revenue.

To make the tax adjustment, Seaton's bill would redirect about $743,000 in raw fish tax revenue that now goes to the Commerce Department's fish tax revenue sharing program to another revenue sharing program at the state Department of Revenue.

"I can tell (a city) how much it will lose from our program but not how much it will gain from (the Revenue Department)," Rolfzen said.

Rep. Woodie Salmon, D-Beaver, who serves on the committee, said he thinks raw fish tax revenue shouldn't be targeted at fishing communities because it discriminates against Interior Alaska.

Southeast Alaska and statewide fishing groups said Thursday they support the concept of the bill but are waiting for more information before they throw their weight behind it.

"It's a complicated bill," said Kathy Hansen, executive director of the Southeast Alaska Fishermen's Alliance. "I need to know who is going to be harmed on the back side of it."

"I don't think any community is going to lose a lot of money," said Jerry McCune, a board member of the United Fishermen of Alaska. "The state won't really lose any money," he said.

"We're still waiting for the negatives," McCune said.

• Elizabeth Bluemink can be reached at elizabeth.bluemink@

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