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Bed tax proposal would drive away summer visitors

Posted: Monday, February 28, 2005

I see that Kenai Peninsula Borough Representative Betty Glick has proposed a bed tax for our Kenai Peninsula Borough. I have a few questions which require answers.

Why would we want or need a bed tax?"

Why is Representative Glick attempting to call a bed tax a "transient accommodation tax"?

Is the KPB in such desperate financial need that it needs to dream up new taxes?

I would like to know why we have not also seen Representative Glick's list of unnecessary KPB spending which may be eliminated?

I would like to know why she has not also proposed a transient electric tax, transient restaurant tax, transient laundry tax, transient food tax, transient transportation tax or a transient gas tax?

Do I really need to continue?

I can assure you that no person appreciates being singled out for special taxation.

I can also assure you that Kenai Peninsula visitors will not appreciate being singled out in this way.

Please try thinking about it; you are in the lower 48 and are hungry, you order a burger and the restaurant tacks on an eight percent transient restaurant tax to your bill because the city believes a lot of visitors eat burgers. That eight percent tax is added on top of the states regular 10 percent sales tax to give you an 18 percent sales tax on a burger. I don't care who you are, nobody would enjoy paying an 18 percent sales tax on a burger.

We currently have persons selling products and services outside Soldotna who are required to pay a two percent sales tax. This proposed eight percent bed tax would in effect jump them into a 10 percent sale tax overnight.

People desiring fishing and lodging services within Soldotna have already had their sales tax doubled, but a Bed Tax would instantly double it again.

If Representative Glick really believes this type of sales tax practice is "ok," why doesn't she resubmit it to triple the borough's current general sales tax?

The reason is pretty plain, she would never attempt to ask the entire borough to increase its sales tax like this because the entire borough would never stand for it. The thought here is that the transient world

is not here and will never say a word about it.

Well guess what, there are tens of thousands of KPB residents who are paying their bills from sales to the transient world. Anything the borough does to make those sale more difficult reduces our income and therefore reduces the sales tax we send into the borough. This discriminatory bed tax would greatly impact both our businesses and reduce the sales tax we send to the KPB.

Currently our local businesses are already attempting to recover from the many 2004 tax increases which have been dumped on them from our state and city governments. In Soldotna we historically only paid five percent on our fishing and lodging sales with a maximum sales tax of $25 on a $500 combined sale. A $1,000 combined fishing and lodging package was charged a total of a $25 maximum tax.

With these recent lodging sale tax increases, that same $1,000 package must be broken down into a $500 fishing sale and $500 lodging sale thus charging $25 plus $25 — a $50 maximum sales tax for the same sale.

In effect this sales tax increase doubled the sales tax charged on sport fishing packages. Sport fishing packages are currently charged an effective 10 percent sales tax with this lodging change. A bed tax would

in effect almost double it again to 18 percent. Is this really what Representative Glick is attempting to do?

Is it her personal mission to drive lodging business out of the KPB?

You really must start to think about this. Why lodge down on the KPB when you can stay somewhere else and pay zero sales tax? $1,000 worth of lodging would receive a $180 discount somewhere else.

That discount could mean a free day trip fishing or sightseeing. Do you really believe that people are not smart enough to figure out how to get more value out of their vacation dollar?

I have been marketing within the sport fish industry for over 20 years and it is a fact of life, a guest can actually be directed towards or away from a business for as little as five percent.

I understand that some may see an area visitor with a giant bulls-eye on their back when it comes to paying for the borough's latest need for instant cash. If there is a real problem I would rather see our borough figure out a few things which can be pulled out of its latest budget.

Don Johnson, Soldotna



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