By Associated Press - Wednesday, March 8, 2017

JUNEAU, Alaska (AP) - Goods sold on docked cruise ships will no longer be subject to Juneau sales taxes.

The City and Borough of Juneau Assembly on Monday voted 7-1 to approve an ordinance that exempts the sales tax on goods and services sold strictly on cruise ships, such as food, alcohol and salon services, The Juneau Empire reported (https://bit.ly/2lDO22V).

The issue arose in April when the Cruise Line International Association asked for a determination from the borough on its sales tax code.

According to the borough, the cruise industry generates about $20.5 million in annual revenue for Juneau, including $8 million from sales tax charged on onshore purchases. That onshore sales tax will not be affected by the change.

The borough sales tax administrator determined that the city and borough could gain an estimated $50,000 to $100,000 by taxing docked cruise ships.

Supporters of the ordinance worried taxes would discourage ships from stopping in Juneau, but detractors say states such as Florida institute a sales tax and see no ill effects.

“The longer the ships stay tied up, the more revenue flows into the town of Juneau,” Mayor Ken Koelsch said.

Assembly member Jesse Kiehl was the only person to vote against the sales tax exemption.

“I object to carving out another exemption for an industry that I think is a great, great benefit to Juneau’s economy and Juneau’s community,” Kiehl said, “but that is not in need of a new-found exemption that would differ from (Florida) the very state where they’re headquartered.”

The Ketchikan Gateway Borough is the only southeast Alaska community that has an exemption in place for cruise ships in port. However, no community currently collects sales tax from sales aboard cruise ships.

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Information from: Juneau (Alaska) Empire, https://www.juneauempire.com

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