On Tuesday, the Mat-Su Borough Assembly approved a cap on the new Talkeetna sewer and water sales tax.
Voters registered inside the Talkeetna Sewer and Water District approved the year-round, three-percent sales tax in October. The funds from the tax are to be used on the sewer and water system.
When initially drafted, the tax ordinance would have included a maximum taxable amount per transaction of $1,000. Assembly Member Randall Kowalke says there was concern that large companies could exploit that cap by buying large numbers of things like flightseeing tours in bulk. That led to the cap being removed, a move Kowalke says was a mistake.
Later, it became clear that multiple types of business were caught up in unintended consequences of removing the cap. Mountain guiding companies, airplane maintenance shops, and bulk fuel deliveries to the Talkeetna State Airport often have bills in excess of $1,000, and paying the tax on the full amount would hurt business.
The ordinance passed on Tuesday reinstates the $1,000 cap. In addition, Assembly Member Kowalke added an amendment that explicitly states bundling bulk purchases to avoid the tax is not allowed. The ordinance passed without objection.