Recently, a select group of the CBJ Assembly made a move to amend Juneau’s ordinances to exempt the cruise lines from collecting city sales tax on goods sold aboard their ships while moored or anchored in Juneau. This proposed exemption deserves careful attention.
Currently, according to the CBJ attorneys, sales tax is required to be collected when goods are sold on vessels moored in Juneau; it’s required by local law. Some vessel owners follow the law. All should.
Why a group of our elected officials are bent on giving the large cruise lines a break on collecting the required sales tax is mystifying.
The proposed change would eliminate the requirement to collect and remit sales taxes; penalties for not paying the required sales tax would also be removed. The reason cited by proponents of the cruise ship tax exemption is “to be a good neighbor” with the cruise ship industry, an argument that seems woefully unbalanced. First, these large cruise ships are not our “neighbors.” Second, should we also eliminate all sales tax on commercial sales made aboard boats from Angoon, Haines, Hoonah and Skagway in order to meet the “good neighbor” standard?
Another reason offered by supporters seeking to gut the tax on tourists is that the potential $100,000 in revenue to CBJ treasury is insignificant.
Hardly.
The existing tax is slated to collect roughly a million dollars in the next decade, a significant amount of revenue given Juneau’s difficult financial future.
Chopping the tax required to be collected by large cruise lines making sales within Juneau is ignorant and, put simply, not fair.
Is it fair to collect sales tax from Alaskans working in the local fishing fleet who routinely sell their catch at the dock and collect the sale tax, while letting the cruise lines skip payment? Local consumers pay sales tax when buying seafood at the dock. Why give cruise passengers a pass on the tax when buying something while visiting Juneau?
Local residents and other visitors to Juneau pay sales tax on goods and services delivered in Juneau. Tour operators operating from city-leased broker stands on the docks collect sales tax from tourists during their operations. With this in mind we don’t believe it makes sense to give the large cruise lines a pass from collecting and paying sales tax for goods sold while conducting commerce in Juneau.
The Law Department of the City and Borough of Juneau has determined that goods and services sold aboard cruise ships within CBJ boundaries are subject to sales tax under the current CBJ sales tax code — the same sales tax code regulating every other business in Juneau. Some of the smaller cruise vessel operators actually follow the law. And so should the big operators.
Not long ago some assembly members told us that spending $35,000 on an election was a very significant expenditure of CBJ money. Our community was embroiled in a nasty little political dustup over a local election where part of the argument centered on spending $35,000 on a special election. So how, exactly, is walking away from collecting roughly $100,000 each year no big deal?
Being a good neighbor works both ways. The cruise ship industry is currently suing the city over collecting the head tax fees. Some of these same large cruise operators now refuse to collect sales tax. From our perspective, this kind of corporate hypocrisy should not be sanctioned, much less rewarded.
The cruise industry provides tremendous benefits and significantly impacts our community. The industry is welcome, of course, but also needs to help pay for the services they depend on when they arrive in our port.
The demand for Alaska tourism, including cruise vessel bookings, has steadily increased over the last 30 years, except for a small dip following the great recession of 2008. Requiring cruise passengers to pay the local sales tax for commercial transactions taking place on vessels while in Juneau is not going to negatively impact cruise tourism.
Juneau provides spectacular opportunities for cruise ship passengers. Requiring cruise ship passengers to pay the local sales tax when they buy goods or services during their stay in Juneau will not diminish the positive experience our community has to offer visitors.
Juneau’s Assembly should insist that all visitors, whether they arrive on cruise vessels, planes or kayak pay the same rate of local sales tax. Juneau can offer better services and experiences to the cruise industry if that industry in turn lives up to the responsibilities they have to the community. Anything less than equal treatment is unfair.
• Empire Readers’ Council editorials are written by members Joe Geldhof, Abby Lowell, Tom Rutecki, and Alex Wertheimer. Member Lisa Weissler is on a leave of absence.
