Juneau Assembly members move to undo a tax on agents' commissions they helped pass

Two Juneau Assembly members who helped pass a sales tax on agents' commissions this summer want to undo it starting Jan. 1.

Greg Smith and Neil Steininger will introduce an ordinance Monday that would bring back the exemption. The city's agenda says it responds to "community concerns regarding the impact on local artists and businesses."

The tax applies when someone sells or leases goods on behalf of the owner and keeps a commission. Buyers pay sales tax on the item's price either way. Until Oct. 1, the agent's commission was exempt as long as it was the agent's only pay. The tax on commissions took effect that day, according to the city.

The new ordinance calls the commission process "an important tool for fostering the growth of the local arts industry," saying it creates opportunities for artists to show their work and build careers. If the Assembly adopts it, the exemption would return Jan. 1, and the commissions would have been taxed for just one quarter.

The tax grew out of a city working group reviewing Juneau's tax breaks. An April memo from Mayor Beth Weldon, Assemblymember Alicia Hughes-Skandijs and Steininger recommended "eliminating this exemption completely." It gave multi-level marketing sales as an example of what the exemption covered. Finance Director Angie Flick estimated ending it would raise $20,000 to $30,000 a year.

Smith moved the repeal forward in the Assembly Finance Committee in May. The full Assembly adopted it July 27 without objection, and the minutes record "No public comment received."

The Assembly kept a much bigger break. A proposal to end the same kind of exemption for travel, lodging and tour agents, worth an estimated $400,000 to $500,000 a year, failed 4-5 in June after a travel agent and three others testified against it. Smith and Steininger both voted no. The city attorney told the Assembly that no record explains why that exemption was created in the late 1970s.

The city manager recommends a public hearing at a special meeting by Nov. 30, so the change can take effect at the start of the next quarter. No date has been set.