Juneau ordinance would restore sales tax break on agents' commissions for goods

Juneau Assemblymembers Greg Smith and Neil Steininger will introduce an ordinance Monday, Nov. 16, that would restore the city sales tax exemption on commissions agents earn negotiating the sale or lease of someone else's tangible personal property. The Assembly repealed that exemption in July, with both sponsors taking part.

The exemption covers only the commission, and only when it is the agent's sole pay. It never covered the retail price of the item. The tax on those commissions took effect Oct. 1, according to a city notice on the repeal. If the Assembly adopts the new ordinance, the exemption would return Jan. 1, 2027, so the commissions would have been taxed for one quarter, October through December.

The ordinance calls the commission process "an important tool for fostering the growth of the local arts industry." The meeting agenda says it addresses "community concerns regarding the impact on local artists and businesses."

The repeal began with an April 20 memo from Mayor Beth Weldon, Assemblymember Alicia Hughes-Skandijs and Steininger, members of a working group reviewing the city's tax breaks. It recommended "eliminating this exemption completely," cited multi-level marketing sales as an example and said the Assembly should discuss whether the exemption serves a public purpose. Finance Director Angie Flick estimated the repeal would raise $15,000 to $22,000 in the first nine months of fiscal 2027 and $20,000 to $30,000 a year after that.

On May 13 the Assembly Finance Committee forwarded the repeal on Smith's motion. The full Assembly adopted it July 27 by unanimous consent, and the minutes record "No public comment received."

A separate repeal covering travel, lodging and tour agent commissions failed 4-5 on June 8, after a travel agent and three others testified against it. Smith and Steininger both voted no. That exemption, estimated at $400,000 to $500,000 a year, still stands. The city attorney told the Assembly that night that no record explains why the exemption was first enacted in the late 1970s.

The city manager recommends holding a public hearing, where residents can testify on the proposed restoration, at a special meeting no later than Nov. 30. A date for that meeting has not been set. Monday's meeting starts at 6 pm in the Assembly Chambers and by Zoom.