KETCHIKAN — Residents of the Ketchikan Gateway Borough could see an increase next year in the borough’s $1,000 sales tax cap that was put in place nearly 40 years ago.
Borough Assembly member Stephen Bradford said Friday he plans to introduce an ordinance that would raise the cap to $3,000 for the city of Ketchikan and the borough, The Ketchikan Daily News reported.
“I think this is an extremely important issue that (the assembly and Ketchikan City Council) need to take a serious look at,” Bradford said. “ … I will be presenting it (to the assembly) unless I hear strongly from the city that I would be beating my head against the wall. There are only some issues that I regularly beat my head against the wall over, and this is would not be one of them.”
The current sales tax cap, established in 1978, means that only the first $1,000 of a single purchase is taxable. If today’s cap were adjusted for inflation, it would stand at more than $3,600, according to a memo from borough Manager Dan Bockhorst.
The call for an increased sales tax cap in Ketchikan comes after Juneau raised its cap from $7,500 to $12,000 and Sitka doubled its cap to $3,000 in the last year, according to the memo. Juneau’s cap on taxable sales does not apply to jewelry sales, and Juneau exempts residential rent from sales taxes.
Bradford said he would also like to exempt the city and borough of Ketchikan’s first $500 of residential rent per month from sales tax.
“It will cost us some money, it will not be revenue neutral,” Bradford said. “But I think that it would be beneficial to those who live here.”
Borough officials estimate that borough sales tax revenues would increase by almost $640,000 annually if the cap was increased to $3,000, while the city of Ketchikan’s sales tax proceeds would grow by $875,000 annually.
