Measure to eliminate jewelry tax cap shot down

Posted: Wednesday, November 10, 2010

An attempt to amend a city ordinance that would have removed the sales tax cap on jewelry failed by a 5-3 vote at Monday's Assembly meeting.

The ordinance currently places a sales tax on the first $7,500 of a single item, with anything above that being tax exempt. The City and Borough of Juneau has exempted more than $2 million over the past four years in jewelry gross sales. Ninety-nine percent of those sales happened in the second and third quarters - tourist season.

The recommendation from the finance committee was to eliminate that cap and allow no exemptions on sales tax for high dollar jewelry items.

Wade Bryson, small business owner and Chamber of Commerce member, said he and the Chamber are opposed to eliminating the cap. He understood the city was trying to be fiscally responsible by trying to increase revenues in a tough economy, but said this is not the way. Bryson said the city would be making the same mistake as they did with the cruise ships head tax. He said the tax, combined with a poor economy, drove away millions in revenue. Bryson said that endeavor cost the city more than it gained.

Bryson said the same would happen if they passed the amendment on jewelry taxes. He said if downtown lost even one jewelry business it wouldn't gain the city what it expects.

"We will lose more in this industry by implementing this," he said, calling the amendment prejudicial to one type of business. "They're not even here to defend themselves. At least give the jewelry industry in our community a chance to speak up. We know we want the tourism industry to pay its fair share. This is a time when Juneau needs to be attracting new business. This sends a message - if we don't like your type of industry we will penalize you for it."

Assemblyman Jonathan Anderson said he was opposed to the motion in finance committee and remained opposed.

"This is singling out an entire industry, and not for a public purpose," he said. "We increased tax on cigarettes and alcohol for a public purpose. ... We've got a mention of how much money has been forgone on jewelry. We haven't heard how much has been forgone on vehicles or other large items. It's discriminatory and I oppose it."

Assemblywoman Ruth Danner supported the amendment. She said she has a friend who works as a clerk at one of the jewelers in town and knows the mark up is significant. She added that she doesn't believe they would be singling out a business unless they left the cap intact.

Assemblymembers Anderson, Mary Becker, Bob Doll, Johan Dybdahl and Merrill Sanford were opposed, while Mayor Bruce Botelho, Assemblymembers Karen Crane and Danner voted in favor.

• Contact reporter Sarah Day at 523-2279 or at sarah.day@juneauempire.com.



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