Juneau Considers Seasonal Taxes During Busy Cruise Season
With 1.7 million cruise guests sailing to Juneau, Alaska, every summer, the Juneau Assembly has identified a way to increase the city’s revenue.
The local government is moving forward with a proposal for a new seasonal tax that would be put in place from April through September annually, which coincides with the peak cruise season.
During those months, the sales tax would be hiked up to 7.5%. For the remainder of the year (October to March), the tax would then drop to 3.5%.
For context, the sales tax is currently set at a flat 5% year-round, so this would be a fairly significant change.
If the proposal makes it to the ballot and is passed, lawmakers have suggested an implementation date of January 1, 2026.
The proposal is ultimately meant to try to balance the overwhelming impacts of cruise tourism on the local community during the high season with the opportunity for economic gain that could be put back into maintaining and improving Juneau.
“In what is an increasingly seasonal economy, it makes sense to capture maximum yield when you have all these folks in town,” Assembly Member Alicia Hughes-Skandijs told KTOO.
Assembly Member Neil Steininger has also previously stated that the plan would ultimately lower the cost of living for the more than 31,000 people who reside in Juneau.
This also wouldn’t be the first time a system of this nature has been implemented in Alaska, as other popular cruise ports like Ketchikan, Sitka, and Skagway all use a seasonal sales tax system.
The city of Ketchikan has a sales tax rate of 8% from April to September, which drops to 5.5% between October and March.
Sitka’s seasonal tax increase is more moderate, with taxes set at 6% from April 1 to September 30 and 5% for the rest of the year.
Finally, Skagway has a sales tax of 5% for these same peak months, which decreases to 3% from October to March.
Later in July, the finance committee will hear public comment on the proposal before making the final decision on if it should be added to the ballot for the 2025 municipal election in October.
How Will Seasonal Taxes Impact Cruisers?
Many people, between cruisers and locals, may not be happy with this news.
Since a partial exception was revoked in 2022, the cruise lines have been on the hook for sales tax in Juneau, Alaska, for transactions occurring within the Gastineau Channel.
This is a key waterway in southeastern Alaska that separates the mainland from Douglas Island near Juneau, and many cruise ships do use this channel to reach the Juneau Cruise Port.
If the cruise lines have to pay greater sales tax, they may then pass the expense onto their passengers through increased prices on new reservations.
Additionally, this means that shore excursions, shopping for souvenirs, and even buying food or drinks while visiting the port would become a bit more expensive for passengers.
Read Also: Alaska Cruise Ports: What Are Your Options?
All that said, future guests shouldn’t worry too much about the seasonal tax, as we won’t know if it will pass for several months.
The proposal may also be revised or might not pass at all depending on the public reception, which hasn’t been entirely positive.
Some locals expressed that they felt they were being penalized for an over abundance of cruise tourism.
It’s worth noting that there is currently a daily limit of five large cruise ships in the port, with the number of passengers capped at 16,000 on Sundays though Fridays and 12,000 on Saturdays.
“It will lower the cost of living during the winter. In the summer it screws us over if we have to buy anything,” one resident said.
“Why not just up the docking fees for the cruise ships and not burden the people who live here,” another questioned.
Others who rely on tourism for their livelihoods felt that this was an “anti-tourist” push that went a step too far.