Juneau grocery and utility taxes drop this week

Published 9:30 am Wednesday, November 19, 2025

Juneau residents should see slightly lower grocery and utility bills beginning tomorrow, Nov. 20, as the City and Borough of Juneau rolls out new sales tax exemptions. Essential foods and household utilities will no longer be subject to Juneau’s 5% sales tax.

The change stems from a ballot measure approved during last month’s municipal election, which passed with more than 70% support.

What counts as essential food?

Grocery receipts should no longer include sales tax on essential food items starting Thursday.

The exemption applies to food defined essential by the Supplemental Nutrition Assistance Program, or SNAP. That includes fruits and vegetables, meat, dairy products and snacks. Hot prepared foods, restaurant meals, pet food, alcohol and tobacco remain taxable.

Residents do not need to take action to get the tax exemption — vendors will exempt eligible sales from the local tax.

CBJ noted it may take time for merchants to update their point-of-sale systems, so senior sales tax exemption cardholders should continue carrying their cards for now.

How do utility tax exemptions work?

Exemptions for utilities are more complicated.

The measure defines “essential utilities” as services sold for non-commercial use at a resident’s principal residence.

Because vendors already distinguish between residential and commercial customers, each utility provider will implement the exemption through its own system. Robert Barr, deputy city manager, said each utility’s approach will be “similar, but not identical,” especially during the first year as the exemption is phased in.

Distinguishing residential from commercial can be nuanced. Short-term rentals, for example, are often considered commercial even if the owner lives there part-time. Home offices and businesses operated from a residence add another layer of complexity.

If customers encounter conflicting decisions from different utilities, Barr said the city will step in to resolve them.

“We were trying to avoid a scenario where everyone has to come in, and everyone has to fill out a form … because it would have been the whole community having to do that,” Barr said.

Essential utilities include electricity, water and wastewater services, garbage and recycling collection, and heating sources such as wood and propane.

Residents do not need to apply for an exemption for billed utilities like electricity or water. An exemption card is needed for exemptions on retail purchases of home-heating fuels such as propane or wood pellets.

Barr hopes residents will be patient with vendors as they put the exemptions in place.

“This is new for them,” Barr said. “They haven’t had to implement a big, broad-based exemption like this, for pretty much the whole community, on a dime. It’s a not insignificant amount of work for them operationally to make it happen, and it might take them a minute to get it done.”

Clear budget implications are still unknown

Although the exemptions kick in tomorrow, city officials say it will take months before they fully understand the budgetary impact.

The city estimates that tax exemptions for essential food and utilities will result in an $11 million annual loss for the general funds budget. The city won’t have concrete data until after gathering merchant reports.

Barr says the city won’t have a clear picture of the budget effects until well into next year.

Earlier this month, the Assembly voted against making any broad service reductions or formal operating budget reductions for the current fiscal year. But the loss of revenue will complicate the next budget cycle.

“The Assembly will not have the benefit of actual data while they’re building the FY27 budget. They will only have estimates,” Barr said. “They will be faced with challenging budget questions and challenging questions about which programs and services we continue to do versus not do, while only being able to rely on estimated loss, instead of what they will actually lose.”