Cordova raises its tax on rooms, rentals and alcohol to 14 percent

Cordova will charge 14 percent tax on hotel rooms, rental vehicles, rental watercraft, marijuana, tobacco and alcohol, after the City Council voted 5-1 Wednesday to raise the rate from 13 percent. It takes effect immediately. The general sales tax on everything else stays at 7 percent.

The change also pulls rental boats and water taxis into the higher rate, which had previously excluded watercraft.

Council member Wendy Rainey cast the lone no vote, with one seat absent. The tally briefly came out wrong: Mayor Kristin Smith announced it as 4-1 when Mike Mickelson's vote did not register during the roll call, and the clerk went back to him later in the meeting to record his yes.

One resident testified against it. He said he opposed raising any tax, and that a marijuana store still under construction in town is facing a higher rate before it has opened a single day, which he called unfair. He also predicted neighbors would just buy alcohol at Costco instead, leaving local businesses with less. He did not object to the bed tax portion.

Council member Kasey Kinsman, participating remotely, said the increase spreads the burden across a wider group and lands "probably even a little heavier on folks who come to visit our town."

The council held the property tax rate steady in June, and when this ordinance came up for first reading last month, collections were running about $250,000 behind last year. Council member Miles Smith said then that he would support it but warned "we cannot tax our way out of issues." Alaska has no statewide sales tax, and municipalities around the state have been reworking local tax structures under similar pressure.

Budget season is next. Kinsman said the council takes it up Oct. 7 and expects to finish by early December, and urged residents to show up for it.