Juneau could introduce a new summer sales tax – could this affect your cruise?

• The town of Juneau is looking at introducing a seasonal sales tax structure.
• This would mean the towns current 5 per cent sales tax would bump up to 7.5 per cent in the busier summer months.
• The town will vote on the proposal at its next assembly.

The small Alaskan town of Juneau appears perpetually locked in a battle of searching for ways to better manage the huge flow of cruise ship traffic that it sees each summer. 

After a campaign financed by the cruise industry was successful in preventing Juneau’s ‘ship free Saturdays’ concept, the town is testing other strategies to limit cruise ship traffic.

It previously increased port fees and now appears to have a new strategy aimed at managing the cruise ship masses.

The Juneau Assembly will vote on a new seasonal sales tax system next year that would increase sales tax during the summer months, when most cruise ships arrive.

Juneau currently has a 5 per cent local sales tax, but this proposal would raise that to 7.5 per cent from April to September, and lower it to 3.5 per cent during the winter months, from October through to March.

Other Alaskan towns such as Skagway and Ketchikan already have tax structures like these.

Juneau assembly member Alicia Hughes-Skandijs said: “In what is an increasingly seasonal economy, it makes sense to capture maximum yield when you have all these folks in town.”

A local sales tax is simply a consumption fee for goods and services. For example, if this proposal went ahead, whether a cruise passenger is booking a local tour, buying lunch in a restaurant or buying a museum ticket, this would come with a 7.5 per cent sales tax. Compared to the current rate, this would equate to $2.50 more of taxes per each $100 spent.

The City and Borough of Juneau has previously clarified to Cruise Passenger, that the town is not anti-cruise. They just simply need to be able to control and manage cruise ship traffic in order to continue giving a satisfactory experience to visitors.

“I think it’s important to note that the limits we have put in place are to allow us to make infrastructure and other improvements to be able to handle the volume we are seeing today. Cruise tourism is vital to our local economy, and we are proud of the number of local businesses and year-round jobs that the industry supports.

“However, we want to make sure we are managing our visitation in a way that maintains our visitor economy while ensuring that the boom doesn’t turn into a bust.”

Cruise ship traffic in Alaska has seen a huge boost over recent years, and the small Alaskan towns that see thousands of cruise passengers dock nearly every day for half the year, have been struggling to keep up.The cruise industry is suing the small town of Skagway, for attempting to place a tax on cruise ship shore excursions.