City and Borough of Juneau
Finance Committee Meeting
October 8, 2003,
at 5 p.m., Chambers

I. Call to Order

II. Roll Call

III. Approval of Minutes
- Minutes of September 10, 2003

IV. Mayor's Tax Depreciation Task Force
During last year’s (2002) Board of Equalization meeting it was pointed out that changes in the business personal property valuation tables had resulted in significant increases in some declared property values. The committee also noted that these increases placed significant tax burdens on some of Juneau’s merchants, specifically those merchants with long lived high cost equipment (contractors). In response, a motion was approved to appoint a committee to review the tables being used for valuing business personal property. A copy of the letter from the Mayor to the appointed committee members, a copy of the Committee’s report and a letter from Craig Duncan, Finance Director, is enclosed in the packet.

V. Investment Code
The Assembly Finance Committee (AFC), at its April 23, 2003, approved staff's recommendation to add a short-intermediate investment horizon to the CBJ investment portfolio and to have this investment horizon managed internally. In order to accomplish this change it is necessary to revise the CBJ's code and investment polices.

VI. Sales Tax Exemption
We have recently had some questions raised about the taxability of advertising services when the service is ordered from outside CBJ. In particular when a local merchant, with central accounting offices located outside CBJ, is ordering advertising services for their local business and requesting exemption from the sales tax. An exemption does exist for advertising services resulting from orders from outside CBJ.

The Assembly intent for providing an exemption for the sale of advertising services was for “National Advertising.” The wording of the exemption is very broad and encompasses more transactions than was intended by the Assembly when the exemption was adopted or re-instated. There is nothing in the exemption language that limits the exemption to “national advertisers.” The recommendation of the Sales Tax Office is to amend the exemption to exempt from the tax national advertising contracts that are entered into outside of the control of the local publisher of the advertising. All other advertising services, regardless of where the order may come from, would be subject to the sales tax.