Public's turn to weigh in on sin taxes


July 20, 2017

The Haines Borough Assembly last week advanced a new tax on tobacco and marijuana products.

The 4-2 vote levies a $2 excise tax on each pack of cigarettes brought or transported into the Haines Borough after Dec. 31, 2017. The ordinance also levies 45 percent of the wholesale price on other tobacco products.

The excise tax ordinance levies $5 per ounce of marijuana grown by local cultivation facilities.

Excise taxes are charged before a product reaches a retailer as opposed to a sales tax, which is charged at the point of sale between a retailer and a purchaser.

A handful of communities across Alaska have instituted what are sometimes known as “sin taxes,” excise taxes on products viewed as harmful to society. Of the 164 municipalities, 16 towns tax tobacco and 10 tax alcohol.

Assembly member Tom Morphet voted against the ordinance because he didn’t want to add an additional tax on marijuana on top of the $50 per ounce charge the state levies on marijuana cultivation facilities.

He cited state law requiring any additional tax on alcohol to be paired equally with another tax.

“It makes most sense, if we’re going to consider sins or luxuries, that alcohol and marijuana would be paired as sales tax and tobacco…alone as an excise tax,” Morphet said.

Assembly member Sean Maidy made an amendment to remove marijuana. He said the assembly could consider a tax later after more is known about the local marijuana market.

Assembly member Stephanie Scott wanted to see alcohol included in the ordinance. “I think to isolate marijuana or tobacco away from alcohol just doesn’t make any sense to me in terms of the health and safety of this community,” Scott said.

Maidy’s amendment to remove marijuana failed, 4-3, with Mayor Jan Hill breaking the tie. Hill said she’d like to see what the public has to say during a public hearing on the ordinance during the assembly’s July 25 meeting.

Morphet, Maidy and Tresham Gregg voted for Maidy’s amendment.

The ordinance passed, 4-2, with Morphet and Scott voting against it.

The ordinance will go through two public hearings before it comes before the assembly for final approval.

Petersburg, Sitka, Ketchikan and Juneau all have excise taxes on tobacco. Similar to the proposed Haines ordinance, Petersburg taxes $2.02 for each pack of cigarettes and 45 percent of wholesale for other tobacco products. Petersburg coffers earned $248,000 last fiscal year from tobacco tax revenue.

Petersburg also levies $25 per ounce on cultivated marijuana.

Haines Borough staff has not received direction from the assembly to work on language that would tax alcohol, borough manager Debra Schnabel said.


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