Kenai Borough ponders tax increase on fishing charters
HOMER - The Kenai Peninsula Borough Assembly is considering a plan to tax charter fishing businesses on a daily, per-passenger basis.
The plan would eliminate tax advantages for selling charter packages to groups.
Charter fishing businesses voiced their opposition to the plan last week when Borough Assembly members met in Homer to take public comment on 15 new sales tax proposals.
With a borough tax cap of $500 now in place, groups pay a maximum of $27.50 in tax on the first $500 of the purchase price. If charter tickets are taxed individually, the tax amount could escalate to hundreds of dollars for large groups on large boats.
"I would have you remember that failed businesses do not pay sales tax," said Leah Jenkin with Seaflight Sportfishing Charters.
In 2001, recreational sales taxes, mostly coming from charter fishing sales, accounted for $390,321 in boroughwide revenues.
Borough Sales Tax Committee members said the tax will bring equity with other sectors of the economy.
"I'm feeling a little out of the loop," said Derotha Ferraro, director of the Homer Chamber of Commerce. "Equity means equal ... equal to what else?"
Maryann Rowe, with the chamber's legislative committee, said the additional taxes "potentially could bear some severe effects on our members and our derbies."
The annual Homer Jackpot Halibut Derby is the chamber's largest, single fund-raising event.
Homer Charter Association secretary Bob Ward compared the plan to mandating that lodging guests be taxed per person, rather than per room. He said rental car agencies do not tax per person, but per car.
Sales tax committee member Chris Moss asked residents if they thought it would be better to just raise the tax cap across the board, on every retail and service sector. The $500 cap was instituted in the 1960s, and by today's standards, said Moss, that would equal about $2,000.
"I think it's equitable. I don't think it's called for at this time," said resident Gary Ault, of a higher tax cap. "I think a seasonal sales tax is more equitable."