Juneau Assembly shelves a plan to make nonprofits charge the city's sales tax
The Assembly of the City and Borough of Juneau voted 6 to 2 on Sept. 14 to table indefinitely an ordinance that would have ended the sales tax exemption for most nonprofit sales from Jan. 1, 2027. City staff had put its yield at $3.3 million a year.
Juneau. Nonprofits in Alaska's capital will keep selling goods and services without charging the city's 5 percent sales tax, after the Assembly of the City and Borough of Juneau voted 6 to 2 on Sept. 14 to table indefinitely an ordinance that would have required most of them to collect it.
Assembly members Nano Brooks and Neil Steininger voted against tabling, and Maureen Hall was absent, KTOO and the Juneau Independent reported. More than a dozen nonprofit leaders testified against the measure before the vote.
What the ordinance would have done
Juneau's code exempts sales, services and rentals to or by organizations that hold a 501(c)(3), 501(c)(4) or 501(c)(19) ruling from the IRS and an exemption certificate from the city manager. Ordinance 2026-32(b) would have kept the exemption for what those nonprofits buy and ended it for most of what they sell, from Jan. 1, 2027.
Two exceptions would have remained. Social services, defined as direct services meeting the basic needs of vulnerable, disadvantaged or distressed people, such as food and housing assistance or disability support, would still have been exempt. So would intermittent fundraising events such as galas, auctions and bake sales, if each ran no more than 14 consecutive days and no more than four times a year.
The proposal was one of 11 ordinances on tax exemptions that the Assembly Finance Committee took up in May, as the city looked for revenue after voters cut taxes in the 2025 municipal election. Finance Director Angie Flick put its yield at $3.3 million a year, based on the version the committee first saw. It was introduced June 8, sent back to the committee after a July 27 hearing, and amended there on Sept. 2.
Why it was tabled
Nonprofit leaders told the Assembly the change would add bookkeeping costs for small, often volunteer-run groups and push up their prices. Kevin Burns of Perseverance Theatre said its raffles raise $20,000 to $60,000 a year over several months, too long for the 14-day limit, the Juneau Independent reported. Josh Fortenbery, president of the Alaska Folk Festival and an attorney, called the ordinance "extremely confusingly drafted," KTOO reported.
Mayor Beth Weldon said it was the confusion that troubled her, and that talks with city finance staff suggested the measure would raise less than first projected.
“It's the confusion this seems to be creating and that's what's troublesome to me because I don't like any legislation that's confusing in many different ways to interpret it.”
A tabled ordinance lapses if the Assembly does not take it up at its next meeting, so any new proposal would have to start over, City Attorney Emily Wright told the Assembly, according to the Juneau Independent.
About this story
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