Tax break for seasonal jewelry stores unfair

Posted: Sunday, November 14, 2010

The City Assembly is now in the process of voting to continue to provide the many seasonal out-of-town jewelry stores on South Franklin Street with a significant tax break. This is not fair and this is not good for Juneau.

Let's start at the ground level. The many stores on South Franklin Street today exist to reach travelers coming off a cruise ship. These travelers are the buyers in Juneau's visitor market. Every store along this corridor is a seller for these buyers. South Franklin Street stores are in competition with each other, all competing for the same bucks, those spent by Juneau's visitors.

Now, most of Juneau's travelers get taxed 5 percent on the sale of goods and services - everyone except those purchasing high ticket items at jewelry stores. This unfairly favors the sale of pricey diamonds to visitors over other goods and services. Thus the pricing and competition in the Juneau visitor market is skewed in the favor of seasonal jewelry stores. Is this fair for our local merchants?

Some of you will undoubtedly remember when there were no outside corporate jewelry stores downtown. This was during the time when the city gave the $7,500 tax break to auto dealers and other merchants to help foster growth and sustainability for those local businesses (For the tax code, see the municipal database site here: http://bit.ly/aE0xBI).

Since then, some things have changed, and as such our tax system should change too. The seasonal jewelry stores have comfortably nestled into a position intended to support local businesses. Currently our local tax system unduly elevates the Caribbean jewelry business model over the business model of our competing downtown businesses. Bottom line, does Juneau need to continue to support the development and sustainability of the seasonal jewelry business like we do for local merchants and local auto businesses? Keep in mind cars get purchased, maintained, gassed, repaired and resold here. Jewelry is not like that.

Please let the Assembly know we don't want them to give the seasonal jewelry stores a leg up on the locals. Ask them to weigh all the costs, and hold these jewelry corporations to paying their fair share (at least monetarily). In the long run, Juneau needs a vibrant community with opportunities for entrepreneurs on South Franklin, not more seasonal jewelry stores.

Jeremy Gieser

Juneau



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