Ketchikan’s local governments are pursuing a new sales tax on cruise ship passengers, potentially generating hundreds of thousands of dollars in new revenue. On Monday, the Borough Assembly voted to move ahead with taxing goods and services sold aboard ships while docked within the borough.
Borough attorney Glenn Brown told the assembly that many other Alaska cruise destinations already collect these taxes.
“We’re actually a little bit behind the curve,” Brown said. “Hoonah, Haines, Juneau, Sitka have all done this. Juneau did it in 2022.”
Brown said the first year Juneau began collecting these taxes, they saw something in the realm of $200,000 in additional revenue.
The sale of goods sold aboard ships within Ketchikan borders have been exempt from sales tax since 2003. This new measure would repeal that exemption. The sale of onboard services have been subject to tax, but according to the borough, have historically been treated as though they were also exempt. Only two of the several major cruise lines that visit Ketchikan are registered and have been submitting taxes for services sold. If passed, the measure would confirm that all goods and services sold in places like onboard salons, boutiques and restaurants are taxable.
The assembly will hold a public hearing and a final vote on the new sales tax during their next meeting Feb. 24, with the intent of enacting the taxes in time for the beginning of the cruise season in April. The proposal came from a cooperative committee with the city, and the City Council will consider a similar measure during their Thursday meeting.
