A possible move to improve sales tax compliance sparked a spirited debate at the borough assembly meeting on March 24, as residents and officials weighed the balance between regulatory fairness and small-scale entrepreneurship.

The discussion arose during the portion of the meeting reserved for persons to be heard, and it could lead to a change in how the borough handles business licensing and sales tax enforcement.

Borough Manager Mason Villarma said he intends to introduce an ordinance that would require all businesses to obtain a license to sell in the borough.

“The issue is that we have some vendors in the borough that do not have a business license, and the assembly will decide how they want to address it,” Villarma said during an April 3 interview. “We want to make it equitable for everyone.”

He said some vendors who sell their goods without a business license are in direct competition with Front Street businesses by selling the same or similar product(s). Those unlicensed vendors don’t charge sales tax for their goods.

“Is it fair to a business on Front Street to meet all the requirements with a business license and remitting sales tax, only to compete with someone that doesn’t do the same thing?” Villarma asked.

While a proposed sales tax ordinance could clarify the tax code and ensure a fair playing field for established storefronts, it has raised concerns among those who participate in the monthly Community Market at the Nolan Center and other infrequent sales events.

Donna Kuntz addressed the assembly to remind them of the borough’s historical support for small vendors. Kuntz, who sells items that she makes at the Community Market, argued that small-scale crafters already contribute significantly to the economy through their own spending.

“The people who make things and sell them at the Community Market purchase their materials locally,” Kuntz said. “They are contributing to the sales tax by doing that and they are supporting local business by doing that.”

Other residents, including Kathy Watkins and Charles Haubrich, expressed fears that new requirements might stifle the borough’s informal economy. Haubrich highlighted the potential financial burden on hobbyists.

“I think that’s going to kill our community market, and I’ve heard that it’s done that before in other communities,” Haubrich said. “I’d ask that you please consider that. I don’t think it’s fair to put the community market vendors in with this.”

The assembly’s move toward an ordinance was prompted in part by a letter from Kimberly Szczatko, owner of Cooper’s Corner, that was sent to all members of the assembly. Szczatko, who began her own career at the Community Market, advocated for a system where every seller follows the same rules to support the services provided by the borough.

“I want makers to succeed. I carry their work, I promote them, and I believe in keeping money circulating in Wrangell. But success as a maker also means accountability,” Szczatko said in her letter.

“If someone is selling to the public as a business, then they should be operating with the same basic requirements the rest of us follow — state and business licenses, and proper collection and remittance of sales tax. That’s not about making it harder for makers; it’s about fairness and respecting the system that funds our borough services.”

Villarma acknowledged that while some vendors make only a few dollars at a market, he said others generate tens of thousands of dollars a year in revenue through multiple venues, while selling products that compete directly with year-round storefronts.

“From a sales tax reform perspective, I appreciate the comments here tonight,” Villarma said. “Sales tax isn’t part of a company’s profit. So it’s not like it’s taking anything away from you; you’re supposed to charge in addition to that, so you don’t have to suffer anything on your bottom line.”

He emphasized that the assembly is looking for creative solutions to maintain equity without harming the culture of the market.