Haines voters also considering seasonal sales tax

A price tag at a grocery store in Haines. (Chilkat Valley News photo)

By Will Steinfeld

Chilkat Valley News

Voters will decide whether to adopt a seasonal sales tax and cash in on the tourists who visit Haines each summer. 

Currently, the borough’s sales tax rate stands at 5.5 percent in town. It would jump up to 7% from April 1 through Sept. 30. In the rest of the borough, the 4% sales tax rate would increase to 5% during that same time period. Then, from Oct 1.- March 31, the sales tax rates would drop to 4.5% and 3% respectively and groceries would be exempted from sales tax. 

While the amount of money that comes in from sales taxes changes based on the volume of sales,  according to projections from borough finance director Jila Stuart the proposed 7%/5% split could generate more than $280,000 annually for the borough.  

Supporters of the concept of a seasonal sales tax point out that it will generate more revenue for Haines without asking year-round residents to bear the brunt of the costs. 

Sales tax revenue is split between several funds including areawide general fund – that includes things like the school, and other community needs including utilities and building maintenance. It also goes to the townsite service area – which funds the police force, public works and animal control – and an account that primarily funds ambulance service, another that promotes tourism and economic development and capital improvement projects.

Many other towns in Southeast Alaska already have a seasonal sales tax, including Skagway. Voters there turned down a proposed increase in 2023, and now will be voting again this fall on whether it should increase from 5% to 7% from April to September. 

Taylor Ashton, owner of Moose Horn Laundry in Haines moved to the Chilkat Valley from Skagway where she managed the Glacial Coffeehouse. 

Ashton said the community seemed to have adjusted well to shifting the tax burden. 

“Nobody complains about it because they see that money from the seasonal tax increase going directly towards upgrades and things that make a difference to the city,” she said. “They see the direct benefit.” 

It changed shopping behavior among year-round residents, she said. 

“It’s funny because on March 31 the locals all like to go to the grocery store and do their last big grocery store hauls. A lot of stores will even put an ad out that’s like ‘don’t forget to do your big hauls before tax season,’” she said. 

But for visitors, Ashton said they didn’t really seem to notice. 

“They didn’t realize it was seasonal,” she said. “How are they supposed to know?”

But some look at Skagway, which gets more than a million cruise ship passengers a year, and worry that Haines’ tourism mix is different and independent travelers could be deterred by higher prices. 

Mike Ward, who owns several downtown stores and a restaurant, said he worried that implementing a seasonal sales tax structure could cause travelers to choose to go elsewhere. Another potential drawback highlighted by borough staff is that businesses which operate primarily in the summer – like tour operators – may have to charge higher prices, making them less competitive.

The idea of a seasonal sales tax is one that has come up repeatedly in Haines in the past decade, but has not gained the traction to be implemented. Borough charter requires that any changes to the sales tax have to be voted on. 

And opinions seem to be split pretty evenly among business owners in town. In Juneau, where a seasonal sales tax is also on the ballot, its chamber of commerce released a statement opposing the measure as it would cost businesses more to alternate between two tax rates. 

But in Haines, chamber of commerce director Amanda Brandon said the organization doesn’t intend to weigh in on Haines’s proposition. There was a split on its board of directors over supporting or opposing the measure and “there wasn’t enough member input for us to get behind it.”

During a candidate forum last week, the current longest-running assembly member and incumbent Gabe Thomas said it has come up time and time again. 

“Every time we take a crack at it, we throw something together at the last minute and hope that it’s good .. [that] voters are going to buy into it. This current one, I feel like we’ve worked really hard on it, and we tried to make sure that the impacts were as low as we can for the locals,” he said. “But it still seems to me like it’s just not gaining the steam that we need for it to be able to get passed.” 

• This story originally appeared in the Chilkat Valley News.