Lower taxes: Four days until Juneau’s food, utility sales tax exemptions kick in

The voters in Juneau spoke: Proposition 2 passed in October to exempt essential food and utilities from the city’s sales tax. Prop 2 was a citizen’s initiative petition to amend the City and Borough of Juneau Code to create the tax exemptions; it passed with 7,099 YES votes to 3,100 NO votes.

Now, the City and Borough of Juneau has released its implementation plan for the new sales tax exemptions on essential food and non-commercial utilities, as approved by voters.

The exemptions officially take effect Nov. 20, and city officials say the rollout will be phased in as merchants and utility providers update their systems.

Essential Food Exemption

Under Proposition 2, “essential food” follows the same definition used by the federal Supplemental Nutrition Assistance Program (SNAP), as outlined in the Food and Nutrition Act of 2008. Juneau residents do not need to sign up for anything, obtain a card, or receive an exemption number to benefit from the food tax exemption.

Foods that will now be tax-exempt include:

• Dairy products

• Fruits and vegetables

• Meat, poultry, and fish

• Bakery items and cereals

• Snack foods

• Cold sandwiches intended for off-premises consumption

• Seeds and plants that grow food

• Any item with a Nutrition Facts label

Items that will not be exempt include:
Hot prepared meals, restaurant food, items eaten on-site, pet food, vitamins, cough drops, alcohol, tobacco.

The city noted that cash registers and point-of-sale systems may take time to reflect the new rules. Seniors who currently use a senior sales tax exemption card are encouraged to keep it handy until the transition is complete.

The new exemption also applies to household utility costs for Juneau residents. Proposition 2 defines “essential utilities” as those sold to individuals for non-commercial use, including:

• Electricity

• Heating fuel

• Water and wastewater services

• Refuse and recycling collection at a resident’s primary home

• Non-commercial use of CBJ landfill facilities

Because most utilities already distinguish between commercial and residential accounts, city city is working directly with providers to apply the exemption using their existing definitions. For utilities that do not already make that distinction, supplemental city guidance will fill the gaps.

Residents will generally not need an exemption card or number for billed utilities such as electricity or water. However, those purchasing eligible utilities at retail, such as propane, wood pellets, or heating fuel, may choose to apply for a utility exemption card.

Residents who believe they have been incorrectly categorized as commercial customers may also apply for an exemption card and present it to their utility provider.

Application details will be posted at juneau.org/finance/sales-tax and at the CBJ Sales Tax Office ahead of the Nov. 20 start date.

The city is coordinating with local utilities to update billing systems and ensure the exemptions are applied correctly. With thousands of accounts across multiple providers, officials caution that full implementation will take time.

CBJ said it is moving “as quickly as possible” to put the new voter-approved exemptions in place while ensuring consistency with the intent of Proposition 2.