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Work session on the agenda: Assembly to talk jewelry sales tax

Daily News Staff Writer

The Ketchikan Gateway Borough Assembly has scheduled a work session during its upcoming regular meeting on Monday to discuss the potential of removing an existing single-unit sales tax cap on jewelry within the borough.

The topic comes to the Assembly on the recommendation of the joint borough and City of Ketchikan Cooperative Relations Committee, which, during a discussion on ways to potentially raise local revenues, voted on March 11 to propose removing the single-sales tax cap on jewelry.

At present, local municipal sales tax rates are applied to the first $1,000 of a single-unit purchase. Capping the sales tax rate is thought to assist local retailers in staying competitive with outside marketers of the same goods, in addition to easing the tax burden on buyers locally.

Other revenue-generating topics discussed at the March 11 Cooperative Relations Committee included the potential of increasing the overall single-unit sales tax cap to $2,500 (with an intent to exclude rent), the potential of raising the cap specifically for jewelry to $3,500, and the potential of increasing the sales tax rate by up to 1% for from May to September.

The only concept to receive adequate committee support was the full removal of the sale tax cap on jewelry — something that the City and Borough of Juneau already does, according to borough information.

The agenda materials for Monday’s meeting show gross sales of jewelry lumped in with sales of curio and other variety items for calendar year 2018. Taken together, the category had gross sales of about $122.77 million, with the single-unit exemption being applied to about $29.6 million. At the current borough sales tax rate of 2.5%, that represents foregone revenue of about $740,700.

In other regular meeting business Monday, the Assembly is scheduled to hear an update from the Alaska Department of Transportation about the Gravina and Revillagigedo island airport ferry facility improvement projects, and hold two public hearings.

One of the public hearings is on an amended proposed ordinance to increase the Ketchikan School District’s request for increased spending authority and funding for the current fiscal year.

The district has requested an increase in its spending authority for the current fiscal year, going from about $42.7 million to about $45.15 million. It also requested about $1.04 million in additional funding from the borough’s Local Education Fund.

On April 1, the Assembly directed borough staff to bring back an ordinance reflecting reductions of $511,704 from both the spending authority and funding requests.

The amended Ordinance 1884 would increase the School District's FY 2019 spending authority to $44,638,274 and appropriate $534,364 from the Local Education Fund for the district.

The other public hearing on Monday’s agenda pertains to proposed Ordinance 1885, which would authorize a variety of funding appropriations.

The meeting is scheduled to start at 5:30 p.m. on Monday in the Assembly chambers at 1900 First Ave. There is time for public comment at the start of the meeting.