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Boro to weigh revision to senior tax exemption: Ordinance would eliminate exemption for alcohol, tobacco, pot

Daily News Staff Writer

If an ordinance introduced at Tuesday’s Ketchikan Gateway Borough Assembly meeting passes, senior citizens might need to start forking over a few extra cents the next time they have a beer.

The Assembly voted to introduce Ordinance 1840, which would eliminate the senior sales-tax exemption for alcohol, tobacco, tobacco products, marijuana and marijuana products.

Borough Clerk Kacie Paxton told the Daily News that the elimination of the exemption would require those over 65 to pay a sales tax on all of the products listed in the ordinance.

“The seniors over 65, if they qualify for the sales-tax exemption card, they don’t pay tax on anything,” Paxton said. “So the ordinance would remove the exemption from products such as alcohol, tobacco and marijuana.”

The newly introduced ordinance is set for an Oct. 2 public hearing. During public hearings the Assembly has an opportunity to hear from residents about the issue. Following public comments, the Assembly members will discuss the issue and vote.

A similar ordinance failed to be introduced back in April. Some issues that were brought up with the earlier ordinance were possible complications with implementation.

Assembly Member Glen Thompson had opposed the ordinance previously, noting that there might be problems calculating sales tax for things like alcohol when purchased with other tax-exempt goods.

According to borough documents, $22,435,635 in sales within the borough were not taxed because of the senior exemption. That equates to $560,891 in lost theoretical tax revenue.

If the Assembly eliminates the senior sales-tax exemption for alcohol, tobacco, tobacco products, marijuana and marijuana products, a small portion of that $560,891 would be able to come back to the borough’s coffers.

According to the agenda item: “Precise data on alcohol, tobacco, and potential marijuana sales is not available, but estimates extrapolated from borough records suggest a conservative estimate of additional tax revenue at the current 2.5 percent tax rate might be $25,000 to $30,000.”

That estimated chunk of tax money would go into the borough’s general fund, where the Assembly could then reallocate the cash wherever they wish.

The public hearing on this issue will be held during the Assembly meeting at 5:30 p.m. Oct. 2 in the Ketchikan Gateway Borough Assembly chambers, 1900 First Ave.

There will also be time for public comment at the beginning of the meeting.