NOTN- Juneau residents will soon see changes at the checkout counter as the city moves to implement Proposition 2, which exempts food and utilities from sales tax starting November 20.
Barr said the goal is to make the transition “as seamless as possible” for both residents and businesses.
“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.
The measure, approved by voters earlier this year, eliminates the city’s 5% sales tax on groceries and household utilities. Barr said some exceptions apply, “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.” said Barr.
He said most utility vendors already have systems in place to differentiate between the two.
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.
CBJ released an official statement that clarifies some concerns on extra steps; 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. It may take time for providers to apply the new exemptions to their many thousands of accountholders.
