A committee recommends that Haines explore the idea of having the Haines Borough administration – not the assembly – decide whether nonprofit groups should get local sales tax exemptions.
The concept is to review and nail down criteria for exemptions, and then let borough administration officials make those decisions. Disputed decisions could be appealed to the assembly. The assembly’s finance committee recommended that move 3-0 on Sept. 29.
The committee also flirted with the idea to raise the borough sales tax during the summer tourist seasons, and shrink the sales tax in the winter. But the committee took no action on that concept.
The finance committee tackled this issue because the full assembly recently voiced concerns about potential pitfalls with voting individually on each nonprofit’s sales tax exemption requests. One pitfall is the lack of specific criteria to make such decisions. That opens up the assembly to potential litigation if different reasons are used to make decisions on similar requests.
“The crux of it is to come up with clear criteria,” said assembly and committee member Ron Jackson.
In the past month the assembly spent significant time on in-depth discussions about exemptions for tour sales in the borough from out-of-state groups, such as several Boy Scout troops. Roughly 80 borough and non-borough nonprofits have sales tax exemptions.
Committee members could remember the assembly denying only one sales tax exemption request. It was a bear-related nonprofit tour firm that would have been direct competition to local tour businesses.
The committee favored using sales tax exemptions as a way to attract out-of-borough nonprofit groups to spend money in Haines.
“These guys are bringing hard currency into town that would not be available otherwise. … They are making a valuable addition to our economy,” said local tour business operator Sean Gaffney.
Currently, there are no nailed-down figures on how much money the borough government loses with the sales tax exemptions and how much those exemptions boost the Haines economy.
An attempt is being made to get a partial grasp on those numbers, said Jila Stuart, the borough’s chief fiscal officer. However, too many factors are involved, which prevent a complete picture, she added.