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Some city sales tax exemptions may go

Posted: Monday, February 07, 2000

The city aims to tax citizens for its own goods and further tax its services with an ordinance scheduled for introduction at tonight's Juneau Assembly meeting.

``The ordinance increases revenues to the city by about $36,000 for the rest of this fiscal year,'' said Finance Committee Co-chair Dwight Perkins. ``Yearly revenues from sales taxes will go up by about $120,000.''

The measure repeals the exemption for sales or rentals to or by the federal and state governments and sales or rentals by the city.

Many government sales will remain exempt by force of federal and state law, but the ordinance makes some transactions subject to taxation, according to the city manager's office.

``Some of the sales by governments are the most likely candidates because the sales tax falls on the private buyer and not the government seller,'' City Attorney John Corso said.

Repeal of the exemptions applies to the city enterprise funds as well as to Parks and Recreation and other departments, Perkins said.

``But the change with food and rentals at Eaglecrest Ski Area and with Capital Transit, for example, won't start until June 30. It'll give them time to make the transition.''

To date, sales and rentals - such as of food and ski equipment at Eaglecrest, or swimming pool rental from the city's Parks and Recreation - have not been taxed.

The ordinance originally set for public hearing tonight has been replaced with a proposal that amends the blanket exemption that had been on the table.

``We're fixing some drafting problems we didn't originally see,'' such as lifting the exemption for ambulance service, said Assistant City Manager Donna Pierce.

The ordinance also leaves the exemption for other cities in place ``in order to maintain Juneau's role as a regional leader and a good neighbor,'' according a city manager's report. Sales to the city remain exempt because it would be a pointless expense for the city to tax itself.



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