Paying more sales tax on big purchases set to be part of Assembly’s final budget considerations

Juneau’s 5% sales tax currently applies to the first $15,000 of a purchase; change advanced Wednesday raises that to $30,000 as a way to avoid some proposed spending cuts

Juneau Assembly members discuss possible reductions to next year’s municipal budget during a Finance Committee meeting at City Hall on Wednesday, May 13, 2026. (Mark Sabbatini / Juneau Independent)

By Mark Sabbatini

Juneau Independent

Clarification: This story has been updated to note the current cap is $15,000, which took effect Jan. 1. The ordinance advanced by the Assembly refers to raising the previously defined $14,300 cap to $30,000.

Charging sales tax on the first $30,000 of a purchase, with the rest exempt, rather than the current cap of $15,000 got an initial go-ahead from the Juneau Assembly at a special meeting Wednesday as it nears passage of a final budget for next year.

Raising the cap would provide significant additional revenue — but far less than eliminating the cap entirely — which could help the Assembly avoid some program and other cutbacks proposed in the budget for the fiscal year that starts July 1. The Assembly is scheduled to take public testimony on the final budget draft and possibly vote to approve it June 8, and is legally required to pass it by June 15.

City leaders are looking to plug a $16 million gap in a draft budget of $550 million, of which roughly $140 million is for municipal government functions, with most of the deficit resulting from two tax-cut measures passed last year by voters.

Among the notable cuts being considered are $261,000 cut that would result in skeletal operations at the Juneau-Douglas City Museum, a $400,000 reduction for Travel Juneau and $300,000 cut to the Juneau Economic Development Council, and closing the Mount Jumbo gym at a savings of $60,000.

A city memo to Assembly members states removing the cap entirely could generate up to $6.75 million during the coming fiscal year and up to $9 million the following year. City Finance Director Angie Flick said Thursday an estimate of how much revenue would result from the cap being raised to $30,000 is not known.

Opposition to that possibility was voiced during Wednesday’s meeting by Steve Ball, general manager of Couer Alaska’s Kensington Mine. He said it eliminating the cap would cost his company about $5 million extra in taxes annually — nearly triple what the company pays now — while lifting the cap to $30,000 would cost about $250,000.

"We understand and respect the city's fiscal challenges," he said. "However, eliminating the sales tax cap would have a disproportionate and significant impact on a very small number of taxpayers, primarily the mining industry. Unlike most businesses, we cannot pass these costs on to customers."

Also, Ball said, while Kensington is among the biggest taxpayers in Juneau, the company "receives limited direct services from CBJ."

"We operate off the road system, off the grid, and fully fund and operate our own infrastructure, utilities and emergency response," he said, adding the company has also "invested millions in local nonprofits, schools, and community facilities, including CBJ facilities."

His parent company, Coeur Mining Inc., reported in February that revenue for its North America operations in 2025 nearly doubled to $2.1 billion on record production and prices, and net income increased more than tenfold to $586 million.

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