Assembly halts proposal requiring nonprofits to charge sales tax on purchases

Mayor cites confusion about changes in moving to table proposal after organization leaders express wide range of objections

Juneau Assembly Member Neil Steininger, right, talks with local scouting leader Scott Ferguson while Mayor Beth Weldon talks with Emily Ferguson following the Assembly’s vote to table a proposal requiring nonprofits to charge sales tax on purchases on Monday, Sept. 14, 2026. (Mark Sabbatini / Juneau Independent)

By Mark Sabbatini

Juneau Independent

Requiring nonprofits to charge sales tax on purchases was tabled by the Juneau Assembly on Monday, after concerns about fairness, financial burdens and confusing aspects of the proposal were voiced by a range of local nonprofit leaders.

Assembly members spent months considering the proposal as part of a series of tax changes intended to boost revenues after voters passed two tax-cut measures in last year’s municipal election. But Mayor Beth Weldon sought to effectively kill the proposal indefinitely after 17 nonprofit officials all testified against the proposal for a wide range of reasons.

"It's not the pleas that are getting me — you guys did a really good job, though," she told the audience. "It's the confusion this seems to be creating and that's what's troublesome to me because I don't like any legislation that's confusing in many different ways to interpret it."

Also, Weldon said, discussions with the city’s finance manager suggest the change as being discussed likely won’t raise close to the $3 million a year originally projected.

The Assembly voted 6-2 to table the ordinance, with Nano Brooks and Neil Steininger casting the dissenting votes. Assembly Member Maureen Hall was absent from the meeting.

The tabled ordinance will lapse if not considered at the next Assembly meeting, meaning the process for a new proposal will have to begin anew, City Attorney Emily Wright said.

The change would have required nonprofits to charge local sales tax — currently 5% — for goods and services, with some exemptions. Nonprofits would still have been exempt from paying sales tax on purchases.

The proposal was previously put on hold in July by the Assembly when concern was expressed by numerous nonprofit officials about anticipated administrative and financial difficulties if they were required to charge sales tax. Juneau Symphony Executive Director Charlotte Truitt told Assembly members at a July 27 meeting it would cost $2,000 to modify their bookkeeping process and $500 a month afterwards to charge customers the city’s 5% sales tax.

The change contained an exemption for social services, which was altered at a Sept. 2 Finance Committee meeting to specify the exemption refers to "the provision of direct services to vulnerable, disadvantaged, or distressed individuals to meet basic life needs such as food assistance, housing assistance, disability support, day services, or senior and assisted living support."

Another exemption was adopted at that meeting for "intermittent fundraising events," defined as "any discrete campaign, gala, auction, bake sale, or temporary market drive conducted by a non-profit entity for the primary purpose of raising organizational funds, provided the physical selling window does not exceed 14 consecutive days and occurs no more than four times per calendar year."

But some organization leaders and Assembly members on Monday said the changes added additional uncertainties to an already questionable policy change.

Kevin Burns, the grants development specialist at Perseverance Theatre, told Assembly members that in addition to the extra accounting work the theater would have to do, it would suffer further financial harm if ticket prices aren’t raised to factor in the 5% sales tax increase.

"Most of us will lower our prices to hold the (bottom) line for our constituents," he said.

The 14-day fundraising event limit means Perseverance will have to drastically shorten certain efforts such as raffle tickets, Burns said.

"That's a pretty sizable revenue line for us and we can raise anywhere from $20,000 to $60,000 a year," he said. "But it takes us months to do that. We can't do that in the 14-day window. And having again to pivot like this to reach an exemption causes undue burden on us."

Additional concern about fundraising event restrictions was expressed by Niamh Diardis, president of Juneau Skating Club, who noted that essential foods such as bread are exempt from sales tax due to a measure voters passed last year, but items sold at a nonprofit’s bake sale could be subject to the tax.

"These unanswered questions create stress, confusion, expense and the potential for costly mistakes," she said. "And please consider the unintended consequences. These costs land on families already struggling with rising prices. They land on volunteers already giving hundreds of hours, and they force many of us to raise our fees, reduce scholarships, cut programs, and ask even more of our volunteers."

After public testimony concluded, Assembly Member Paul Kelly proposed sending the proposal tax change back for further review by Assembly committees, but he withdrew the motion when Weldon and other members said they didn’t see a way to craft a workable proposal that adequately addressed the concerns raised.

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.