Skagway’s winter sales tax break begins Friday October 1st | KHNS radio
Skagway leaders have declared a tax vacation this winter starting this Friday, which runs through April 1st. This means the municipality doesn’t levy sales tax on retail goods sold within the county.
The state of Alaska does not impose sales tax on retail purchases, but does allow municipalities to impose sales tax to generate revenue. Skagway typically imposes a 5% tax on retail sales.
But this year they have a. explained Sales tax vacation for half the year. The concept of tax exemption is not new to Skagwegians, says CFO Jay Burnham.
“It’s something we’ve been doing for years. And it’s usually a community thing only for the community, ”Burnham said.
However, tax leave has not lasted all winter since 2016, and it did not even exist in 2020.
Orion Hanson, member of the finance committee, said during a recent meeting that the tax-free offer the community received earlier this summer was a breeze.
“I think we try to help the people here in winter as much as possible. And in this context we also received an unexpectedly large amount of money from the ARPA funds, which flowed into the revenue replacement. And that has changed our budgetary position significantly compared to the adoption of this budget, ”said Hanson.
During a typical summer, hundreds of thousands of avid cruise ship buyers come to Skagway. That year in Skagway that number dropped to less than 10% of a typical season.
That means there was less sales for local traders and less income for local workers.
Shawn Overstreet runs the Mountain Shop in Skagway and says the tax exemption is good for everyone.
“I think it definitely makes a difference. Especially in those years when it was financially difficult for many people. I think any little savings you can accumulate these days goes a little further, ”said Overstreet.
He also says that one of the only problems with the tax exemption this year is that he’s not sure most people know it’s happening.
“I just found out from an email that got to the store last week. I think I’m not sure what is being done to get it out to the public. “
Kristen Wagner runs Duff’s backcountry outfitters and says the vacation helps people who want to shop locally.
“I like to think that people are choosing to shop locally rather than online or something that they pay tax on now where there used to be no tax. I think it makes us more competitive. We’re already noticing that people come in during the tax break, ”said Wagner.
She also says that people tend to hold back on winter shopping until the tax exemption goes into effect.
“People stock up on bare bones, they come in and buy some underwear and socks and Levi’s,” said Wagner.
She said her parents are waiting until October 1 to purchase a new Toyo oven for one of her company’s employee apartments.
Jason O’Daniel, who works at the Skagway Hardware Store, says he expects more bulk orders after October 1st.
“Some people will be 100% waiting to do some of these special jobs until we know you on a VAT vacation. I know I handle furniture and appliances for myself, and that’s when I usually get most of the special jobs, ”said O’Daniel.
He recently ordered a new gift for his porch, but he’s waiting for the tax exemption to begin before paying for it.
“I just ordered a smoker, yes a porter. So I’ll buy this on the first, ”said O’Daniel.
It is not yet clear when the first rack of ribs will be ready. The sales tax vacation begins this Friday and lasts until April 1, 2022.