Borough considers fishing charter tax plan

Posted: Friday, November 15, 2002

HOMER (AP) -- The Kenai Peninsula Borough Assembly is considering a plan to tax charter fishing businesses on a daily, per-passenger basis.

The plan would eliminate certain tax advantages given by selling charter packages to groups.

Charter fishing businesses voiced their opposition of the plan last week when borough assembly members met in Homer to take public comment on 15 new sales tax proposals.

With a borough tax cap of $500 now in place, groups pay a maximum of $27.50 in tax, on the first $500 of the purchase price. If charter tickets must be taxed individually, per person, the tax amount could escalate to hundreds of dollars for large groups on large boats.

''I would have you remember that failed businesses do not pay sales tax,'' said Leah Jenkin with Seaflight Sportfishing Charters, who, along with other charter operators, felt the proposal was inequitable and was intended ''just to bleed more sales tax revenue,'' the Homer Tribune reported.

In 2001, recreational sales taxes, mostly coming from charter fishing sales, accounted for $390,321 in boroughwide revenues. For a single city, Homer accounted for the majority of this, with $72,322 being garnered in taxes.

Seward, which also has a large charter market, brought in the next highest amount at $64,363. Anchor Point, Ninilchik and all other unincorporated areas accounted for $227,542 combined.

Borough Sales Tax Committee members realize that the ''per person, per day'' plan will increase revenues, but they say it will bring equity among other sectors of the economy.

''I'm feeling a little out of the loop,'' said Derotha Ferraro, director of the Homer Chamber of Commerce. ''Equity means equal ... equal to what else?''

Ferraro says charters may feel ''penalized'' unless it is made clear where any existing inequities are in place, that would merit their clients being taxed more.

''We don't know what we are currently 'not equal' to,'' said Ferraro.

Maryann Rowe, with the chamber's legislative committee, said the additional taxes ''potentially could bear some severe effects on our members and our derbies.'' The annual Homer Jackpot Halibut Derby is the chamber's largest, single fund-raising event.

In terms of inequities, Homer Charter Association secretary Bob Ward compared the plan to mandating that restaurant customers be charged and taxed per person, per meal as well as lodging guests being taxed per person, rather than per room. He said that rental car agencies do not tax per person, but rather for the entire car. Ward further illustrated his point in that a dump truck is taxed per service transaction, and not for every individual yard of gravel that it hauls.

''It seems like the recreational users on the Kenai Peninsula are being singled out for a huge price increase,'' said resident Gary Ault.

Sales tax committee member Chris Moss asked residents if they thought it would be better to just raise the tax cap across the board, on every retail and service sector. The $500 cap was instituted in the 1960s, and by today's standards, said Moss, that would equal about $2,000.

''I think it's equitable. I don't think it's called for at this time,'' said Ault, of the raised tax cap. ''I think a seasonal sales tax is more equitable.''

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