Juneau weighs taxing nonprofit sales to help close its budget gap

Juneau is weighing whether its nonprofits should start paying sales tax like everyone else — and the debate is pulling the city's symphony, its charities and its budget hole into the same fight.

The idea is straightforward: tax the sales nonprofits make, with carve-outs for government and social service groups, and bring in an estimated $3.3 million a year. For a city staring at a projected $687,000 deficit next year — even after cutting $736,000 from its operating budget — that's real money. The catch is who pays it.

Assembly Member Christine Woll made the case that nonprofits shouldn't get a break small businesses don't. "I don't really understand why I would not pay sales tax if I went to one nonprofit and bought something and they made less than $300,000 in sales versus one that made over," she said Sept. 2, as the Assembly debated whether to let smaller nonprofits keep their exemption. She didn't dodge the cost: "I know this will be a burden on our nonprofits, but that's not a good reason to enact a policy."

That burden showed up in person. Charlotte Truitt of the Juneau Symphony testified the change would cost her organization about $2,000 up front and $500 a month — the kind of hit that lands hard on a group running on ticket sales and donations.

For now, no one's decided anything. The Assembly kicked the ordinance back to its Finance Committee for another look, with no vote taken.