NOTN- The City and Borough of Juneau is preparing to implement major sales tax changes as a result of Ballot Proposition 2, which exempts food and utilities from local sales taxes starting Nov. 20.
Deputy City Manager Robert Barr says the city wants the transition to be as seamless as possible.
“Residents won’t have to do anything. You just simply won’t see sales tax on your receipts or your bills for food and utilities.” He said, “There’s a couple of exceptions for utilities that you buy in person, like wood or wood pellets or the retail purchase of fuel. For those specific exemptions folks will have to come downtown or go online and get a card number from us, because, while food is exempt for everyone, utilities aren’t.”
Barr said the city’s utility vendors are working to ensure that most billing adjusts automatically, though Barr noted some cases may require clarification between residential and commercial customers.
Below is the summary of what residents can expect, posted by CBJ;
Essential Food
Proposition 2 follows the same definition of “essential food” utilized by the Supplemental Nutrition Assistance Program (SNAP) and defined by the federal Food and Nutrition Act of 2008 (7 U.S.C. § 2012(k). No action is required by residents to receive the essential food sales tax exemption. Residents do not need to obtain an exemption card or number.
Examples of exempt foods include dairy products, fruits and vegetables, meat, poultry, fish, bakery items, cereals, snack foods, cold sandwiches for off-premises consumption, seeds and plants that grow food, and items with a Nutrition Facts label.
Non-exempt items include hot prepared foods, restaurant meals, foods intended to be eaten on-site, pet food, vitamins, cough drops, alcohol, tobacco and tobacco products, and items with a Supplement Facts label.
It may take merchants time to adjust point-of-sale systems to reflect the new sales exemption. For this reason, senior sales tax exemption cardholders are encouraged to continue carrying their card until this transition is complete.
Noncommercial Essential Utilities
Proposition 2 defines “essential utilities” as those sold to individuals for non-commercial use within the City and Borough of Juneau. This includes the sale of electricity, heating fuel, water and wastewater service, refuse and recycling collection at a City and Borough of Juneau resident’s principal place of abode, and the non-commercial use of landfill facilities by CBJ residents.
Because most, if not all, utilities already designate commercial and residential rates for billing purposes, and to ensure that the intent of the ballot sponsors and the will of the voters is honored, CBJ is working with utilities to utilize their definition of residential and commercial while maintaining the intent of the ballot initiative. CBJ also provided definitions for guidance where utilities do not already designate rates as commercial or residential.
In practice, this means that residents are not required to obtain an exemption number or card to receive the exemption for billed utility use (electricity, water, etc.). However, residents may choose to apply for an exemption card if they intend to make retail purchases of eligible essential utilities (wood pellets, propane, etc.). If residents believe they are mistakenly designated as commercial by billed utilities, they may also apply for a utility sales tax exemption card and submit their exemption card to the utility to receive the exemption. Essential utilities exemption card application details will be available at juneau.org/finance/sales-tax and at the CBJ Sales Tax Office prior to the November 20 enactment date.
CBJ is working with utility providers on the implementation process as quickly as possible. It may take time for providers to apply the new exemptions to their many thousands of accountholders.
