Win Gruening: Closing sales-tax loopholes is good for Juneau

By WIN GRUENING

Sept. 10, 2026 – A significant vote in a recent City and Borough of Juneau Finance Committee meeting signaled long-overdue action that will make Juneau’s sales tax code fairer and more equitable – and bring in over $3 million to the city treasury.

For well over a decade, CBJ elected assembly members have considered modifications to the Juneau sales tax code to reduce or adjust some of the dozens of accumulated exemptions that no longer serve a public purpose. One of the most glaring and obvious examples is the exemption for non-profits from collecting sales taxes from customers on their retail sales and services.

Why tax visitors and residents at most local stores but allow competing non-profit retailers avoid collecting sales tax from their customers?

Not collecting sales tax for years are retailers like the downtown Sealaska Heritage store, Discovery Southeast at the Mendenhall Glacier Visitors Center and the DIPAC gift shop (and hatchery tours), all of which are heavily patronized by summer cruise ship passengers

Last month, I made the case for discontinuing this exemption, one that’s unusual and rare throughout the rest of the country,

Each time this inequity has been raised in the past, resistance from non-profit leaders has shut down the discussion. However, with budget pressures mounting due to projected flood mitigation expenses and properties coming off the tax rolls, this change is inevitable and long overdue.

The CBJ Assembly has debated this latest change since last April. An analysis by Juneau’s municipal finance director in May estimated that such a change could boost municipal tax revenues up to $3.3 million annually.

The proposed ordinance with modifying language presented at the Finance Committee September 2^nd meeting had been originally introduced in June and had a public hearing on July 27. After amendments, the ordinance eliminated the sales tax exemption for sales by a non-profit but continued it for social services provided by a non-profit. Examples that were given are services currently provided by non-profit organizations such as REACH, SAIL, and ORCA.

In an attempt to carve out an exemption for other smaller, largely volunteer, non-profits, an amendment offered by CBJ Assemblymember Maureen Hall was adopted that continued the sales tax exemption for “intermittent fund-raising events,” “discrete campaigns,” and “temporary market drives.” This would encompass exemptions for most fund-raising by smaller non-profits that included raffles, rose sales, and car washes, for example.

Concerns expressed about sales of Girl Scout cookies, Boy Scout popcorn, and similar food items may prove unfounded as they may be exempt under the current sales tax exemption for groceries.

Another amendment that passed unanimously changed the ordinance effective date from this October to January 1, 2027.

Amid a few final objections from some assemblymembers, Juneau Mayor Beth Weldon wisely reminded members that non-profit organizations would not be paying sales tax under this change, only collecting tax from their client or customer.

Fears that non-profits will suffer financially seem far-fetched.

When patrons spend $50 for an adult ticket or $15 for a student ticket to a concert at the Juneau Symphony, will they even notice tacking on another $2.50 or $.75?

When shopping at the Salvation Army and buying a $10 item, will adding $.50 stop someone from buying?

Will a cruise passenger acquiring a unique Native art piece for $500 at Sealaska’s gift shop downtown object to adding an additional $25?

The vote to move the amended ordinance to the full CBJ Assembly for final approval on Monday, September 14 passed on a 7-2 vote with Assemblymembers Hughes-Skandijs and Woll dissenting.

To their credit, the current CBJ Assembly has wrestled with this issue for months and finally reached a consensus that satisfied almost all assembly members. While not perfect, it follows the original intent of the Assembly’s goal to capture additional forgone revenue while addressing legitimate community concerns.

The proposed changes seem to ensure that the majority of non-profits will be unaffected and remain exempt from collecting sales taxes. This change would primarily affect larger organizations with regular, year-round retail sales revenue that often compete with private sector businesses.

There may still be modifications to the ordinance before (or during) the next Assembly meeting but the basic groundwork has been laid for this important step to make the CBJ sales tax code more equitable.

Win Gruening: Exempt the bake sales, not the retail stores from Juneau sales tax

Win Gruening retired as senior vice president in charge of business banking for Key Bank for the State of Alaska in 2012. He was born and raised in Juneau and graduated from the US Air Force Academy in 1970. After serving as a pilot in the US Air Force flying in the Pacific and Vietnam, Win began his banking career with Rainier Bank in Seattle and moved home  to Juneau in 1980. Win has been involved extensively in various local and statewide organizations such as United Way, Junior Achievement, and the Alaska Committee.