Petersburg voters will decide this fall whether to raise the town’s sales tax cap to collect the 6% tax on the first $5,000 of each sale — which is the same taxable limit as Wrangell.

Currently, sales and services in Petersburg are only taxed on the first $1,200, which means tax on a single purchase is capped at $72 max. The borough wants to raise the taxable amount to $5,000, which would generate a $300 sales tax collection.

Borough officials say Petersburg has the lowest cap among major towns in Southeast Alaska. The cap has been adjusted only once since it was established nearly 70 years ago, raising it from $1,000 to $1,200 in 2002.

Petersburg’s borough assembly passed the proposal at a meeting on June 15 with a contested 4–2 vote. Assembly members Rob Schwartz and Scott Newman voted in opposition. Mayor Bob Lynn was absent from the meeting.

Assembly members on both sides of the vote said the change, if adopted, would affect the community’s businesses.

“I understand that, you know, the borough needs money to maintain things and infrastructure and all that,” said Newman. “I just feel like this is not the right move at this time.”

Newman said he believes local government should be “incentivizing business” instead of “taxing the ones that are supporting us.”

Assembly Member James Valentine agreed that raising the cap would affect businesses in town. But he said it doesn’t help to keep putting off changes like this that would generate revenue for the borough.

“Eventually, the Band-Aid needs to be ripped off,” Valentine said. “I don’t think that just continuing to defer this really helps anything. I think that we need to move forward.”

He said he liked that the proposal will go before the voters decide. It will be on the Oct. 6 municipal ballot.

The measure was on the 2024 ballot but failed by five votes.

This story was first published at http://www.kfsk.org and is reprinted here with permission.