Wrangellites will be able to save a bit on sales on Saturday during this season’s Tax Free Day. For one day only local businesses will be exempt from the Borough’s seven-percent sales tax, so a number of shops will be offering special discounts and sales to coincide with the day.
“It promotes our local economy,” said Cyni Waddington, manager of the Wrangell Chamber of Commerce office. “The Chamber of Commerce petitions the city twice a year,” she explained, “asking for a day of no tax.”
This particular Saturday will coincide with other events, such as the city’s second-annual Pumpkin Festival and the Girls On Track 5K run.
“We did that on purpose because we figured families would be out and about already,” Waddington said. It also will give the local economy a boost between the summer and holiday seasons.
Similarly, another tax-free day was held in May to coincide with the annual Salmon Derby. “So people can load up on supplies for their fishing,” Waddington explained.
Other communities in the region also make use of the concept.
“We did one last year and it was a wild success,” said Chelsea Goucher, executive director of Ketchikan Chamber of Commerce. More recently, the borough held another this past Saturday to coincide more closely with the distribution of Alaska Permanent Fund Dividend on Oct. 1.
Feedback from Ketchikan-area businesses about the day have been good. Goucher recounted several business owners reporting tax-free day as being their best day of sales for the entire year.
“It inspires people to get out,” said Cindi Lagoudakis, director of the Petersburg Chamber of Commerce. The Petersburg Borough Assembly approved a tax-free day at its Monday meeting, setting it for Oct. 18.
According to the Alaska Department of Revenue, the state does not have a sales and use tax. Instead, municipalities and other local jurisdictions can elect to impose their own taxes. A comparative table at http://www.sale-tax.com shows rates across the state span from 0 to 7.5 percent.
Wrangell’s sales tax rate is at 7 percent, up to a purchase of $1,500. Unlike a number of other jurisdictions, the Borough has no additional taxes on boats or services. Four percent of the money collected through sales tax goes to fund the island’s roads, with another 28 percent going towards its schools and related programming. The rest goes toward the city’s general fund.
The Borough had last year looked at reducing its sales tax rate from 7 percent to 5.5, but in an October referendum the idea was soundly rejected by voters. Had the referendum passed, the tax-free days would likely have been discontinued.
Wrangell Borough Manager Jeff Jabusch explained the day had originally been developed to entice Inter-island ferry visitors from Prince of Wales Island to shop here, but after the line was discontinued the tax holiday stayed on.
“It gives business a boost,” he said, and “the community seems to get behind it.”
Be sure to check out the special advertisements pages in this week’s edition of the Sentinel for Tax-Free Day savings.
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