Chamber asks for fuel tax relief

Assembly moves to draft resolution to include oil, propane and wood fuel

Posted: Tuesday, November 27, 2007

The Juneau Chamber of Commerce asked the Juneau Assembly at Monday night's meeting to consider bringing back a temporary sales tax exemption for fuel oil sold during a 90-day window.

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"We're asking on behalf of the chamber," member Don Habeger said. "Small business could use the break."

In a draft letter sent to the city, Chamber CEO Cathie Roemmich said the heating oil tax break was not a new concept. She asked that a new ordinance mirroring a 2006 sales tax exemption be recommended immediately.

A similar temporary exemption was enacted when the Assembly agreed to provide fuel oil tax relief from Jan 1 to March 31, 2006.

By Habeger's "back of the napkin figuring" his personal fuel oil costs have increased 21 percent since fall 2005.

The previous exemption cost the Juneau tax base $414,000 during the first quarter of 2006, said Kim Kiefer, deputy city manager.

If renewed, she expects the relief to equal a $450,000 subsidy to residential and business customers during a 90-day window.

Kiefer found oil prices this year average between $3.18 and $3.22 per gallon compared to $2.88 and $3.09 the same time last year.

"Fuel prices have increased by 20 cents," she said.

"We feel like people need relief," Roemmich said.

Assembly member Randy Wanamaker moved to have the city attorney draft a new resolution for consideration that also included propane and wood fuel.

The Chamber's request comes too late for implementation by the first of the year. Kiefer said there was no chance a new ordinance could be pushed through for the New Year.

The soonest the Assembly could introduce a new ordinance is Dec. 3. From introduction to implementation an ordinance takes at least six weeks, she said.

Roemmich said the Chamber hoped the exemption would be retroactive to Jan. 1.

Crafting a retroactive tax break is not a problem for the city, but it gets more complicated for fuel vendors, assembly member Jeff Bush said.

"It's complicated because it's already collected," he said. "They would have to figure out how to return it."

Whatever mechanism the assembly develops, Habeger favors the tax break coinciding with the first quarter of the business year.

"I believe it is prudent," he said.

• Contact Greg Skinner at 523-2258 or greg.skinner@juneauempire.com.



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