The Celebrity Millennium sails into the Port of Juneau early on the morning of July 26, 2021. During this voyage, onboard purchases were exempt from the City and Borough of Juneau's sales tax. However, a new ordinance winding through the City Assembly could change that for next year. (Dana Zigmund/Juneau Empire)

City seeks to tax onboard purchases

“An issue of tax fairness”

Next summer, cruise ship passengers sailing through Juneau’s waters may not be able to sail past the tax collector.

Currently, the City and Borough of Juneau require cruise ship operators to track and report all sales of goods and services inside the borough’s boundaries. However, the sales are exempt from the city’s five percent sales tax—leaving $21 million worth of on-board sales untaxed.

At Wednesday night’s finance committee meeting, Assembly members agreed to move forward on an ordinance that would end the exemption and potentially net an additional $1 million for city coffers.

According to Jeff Rogers, finance director, the Finance Committee looked at the measure last year, but progress was thwarted by the COVID-19 pandemic response.

[Docks and Harbors to buy land]

Rogers said the tax would apply to food sales, such as specialty dining, alcohol purchases, spa services, gifts and artwork.

“The early morning hours are probably not a rich time for cruise ships,” Rogers said. “But, in the evening there’s specialty dining, alcohol and spa services. The ship is selling all kinds of things all day long.”

Rogers said that cruise ship companies already track sales, so he didn’t see the ordinance as a barrier for operators.

He said that other jurisdictions, including Miami, Florida, assess sales tax, so the technical mechanism is already in place on most cruise ships.

“This is an issue of tax fairness,” said Assembly member Greg Smith pointing out the disparity created when a ship sells goods that are not taxed while a local provider on the dock must collect and remit sales tax.

Rogers and City Manager Rorie Watt said that the tax would not apply to ships passing through the city’s waters but not docking.

[Study sheds lights on electrifying cruise ship docks]

The ordinance will move forward for a public hearing.

Rogers acknowledged that collection details—such as determining the boundary or timeframe for assessing the tax—still need to be addressed. He said work on those aspects will continue as city leaders consider the ordinance.

• Contact reporter Dana Zigmund at dana.zigmund@juneauempire.com or 907-308-4891.

More in News

Jasmine Chavez, a crew member aboard the Quantum of the Seas cruise ship, waves to her family during a cell phone conversation after disembarking from the ship at Marine Park on May 10. (Mark Sabbatini / Juneau Empire file photo)
Ships in port for the week of May 18

Here’s what to expect this week.

Rep. Sara Hannan (left) and Rep. Andi Story, both Juneau Democrats, talk during a break in floor debate Sunday, May 12, at the Alaska State Capitol. (Mark Sabbatini / Juneau Empire)
Juneau’s legislative delegation reflects on lots of small items with big impacts passed during session

Public radio for remote communities, merit scholarships, fishing loans among lower-profile successes

Gov. Mike Dunleavy speaks about his vision for Alaska’s energy future at the Connecting the Arctic conference held in Anchorage on Monday. Next to him is Alberta Premier Danielle Smith, invited to Anchorage to speak at this week’s Alaska Sustainable Energy Conference. (Yereth Rosen/Alaska Beacon)
Gov. Dunleavy examining energy bills passed by Alaska Legislature

Expresses optimism about carbon storage bill, pondering next steps on royalty relief that failed.

(Michael Penn/ Juneau Empire file photo)
Police calls for Sunday, May 19, 2024

For Sunday, May 19 Assault At 8:20 p.m. on Sunday, 32-year-old John… Continue reading

(Michael Penn / Juneau Empire file photo)
Police calls for Saturday, May 18, 2024

This report contains public information from law enforcement and public safety agencies.

Fay Herold, a delegate at the Alaska Democratic Party’s state convention, expresses concerns about a proposed change to the party’s platform on Saturday at Elizabeth Peratrovich Hall. (Mark Sabbatini / Juneau Empire)
Alaska Democrats gather in Juneau to make party plans for national convention in Chicago

Peltola, national party chairman among speakers; delegates get advice from protester at 1968 event.

A lamb-decorated headstone lays half hidden in a cemetery section in Douglas on Monday, Aug. 13, 2018. (Michael Penn / Juneau Empire file photo)
Shaky deals from past haunt efforts to preserve Douglas cemeteries today

As volunteers struggle to clear brush at historic sites, city leaders say they have limited options.

(Michael Penn / Juneau Empire file photo)
Police calls for Friday, May 17, 2024

This report contains public information from law enforcement and public safety agencies.

(Michael Penn / Juneau Empire file photo)
Police calls for Thursday, May 16, 2024

This report contains public information from law enforcement and public safety agencies.

Most Read