City and Borough of Juneau
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Office of the City Clerk
October 26, 2005, at 5:00 PM
I. Call to Order
II. R oll Call
III. Approval of Minutes
IV. The 1% Temporary Sales Tax Levy and Project Appropriation
The following funding priorities and financing schedule are recommended for your consideration:
Included with the packet is a report to the Assembly Finance Committee from the Tax Policy Subcommittee. The Subcommittee was formed by the Finance Committee in response to a Juneau Chamber of Commerce resolution presented in September 2004. The resolution contained several taxation recommendations and was a follow-up to a report from the ad hoc Tax Depreciation Task Force Report presented in September 2003. Both the Chamber and Tax Depreciation Task Force requested the Assembly Finance Committee (AFC) consider an increase in the Business Personal Property assessment exemption from $2,000 to $100,000. When reviewing this request, the Finance Committee felt that it would be more appropriate to review taxation issues on a broad basis. The Finance Committee formed the Tax Policy Subcommittee on November 1, 2004 and tasked them with reviewing CBJ’s property assessment and sales tax codes and policies. The Tax Policy Subcommittee members are Jeff Bush, Chair, Bruce Botelho, Randy Wanamaker and Stan Ridgeway. The Subcommittee held twelve meetings and reviewed eighteen different property assessment and sales tax issues. Several of the Subcommittee’s recommendations are time sensitive to January 1, 2006. As such, it will be necessary to move these items ahead quickly if the Finance Committee wishes to implement these recommendations within the recommended time frame. The time sensitive recommendations include-
Although not as time sensitive, the Finance Committee may also wish to consider the following additional recommendation.
VI. Proposed Temporary Sales Tax Exemption for Heating Oils
Over the last few months, we have experienced a significant increase in the cost of heating fuel, placing a financial burden on local residents just prior to winter. The City and Borough places a sales tax levy on the retail sale of all fuel (heating oil, motor fuels, etc). Assemblymember Dybdahl requested we provide information regarding a temporary sales tax exemption on heating fuel during the winter months. Sales tax requirements and exemptions are provided by CBJ code. If the Assembly wishes to provide an emergency exemption, it will be necessary to do so by ordinance and I would recommend making such code change effective at the beginning of a month and/or ideally at the beginning of a calendar quarter. In addition, I would recommend, if a heating oil exemption is approved, including both commercial and residential sales. In many cases, heating oil from one storage tank is used for both commercial and residential heating. As such, it would be impractical to require merchants to allocate their sales between commercial and residential. The estimated loss of a sales tax for the first quarter of 2006 (January-March) would be approximately $440,000. This amount is a very rough estimate based on the current price of heating oil. The Sales Tax Office is unable to provide precise information, due to the nature of how merchants report gross and taxable sales.
VII. Executive Session
The Finance Committee may adjourn into executive session to receive an update on the status of contract negotiations with MEBA.