Juneau Assembly nixes sales tax break on high-value jewelry

The view of South Franklin Street from aboard a cruise ship June 20, 2011. (Creative Commons photo by Jasperado)
Jewelry stores along South Franklin Street are one of the first things many Juneau cruise ship visitors see, as in this June 20, 2011, photo taken aboard the Golden Princess. (Creative Commons photo by Jasperado)

The Juneau Assembly adopted an ordinance Monday in a 6-3 vote that eliminated a sales tax break on high-value jewelry.

Beginning in 2016, individual jewelry items that sell for more than $12,000 will be taxed at the same rate as everything else.

Assemblyman Jerry Nankervis objected to the ordinance.

“I think this unfairly targets one industry for something that we don’t target anybody else on.”

Assemblywoman Debbie White and Mayor Merrill Sanford joined Nankervis’ no vote.

Assemblywoman Kate Troll responded to Nankervis.

“This is not about singling out a single business, this is about getting our policy back to its original intent. The original intent was to ensure that large, expensive ticket items purchased by locals would have an incentive to purchase them here.”

She said records indicated the original break was intended for locals buying cars and electronics, not jewelry.

The city is home to about 50 jewelry stores, according to the city Finance Department. No one testified during the public hearing on the ordinance.

Until recently, the taxable value of all big-ticket items and services was capped at $7,500. In April, the Assembly raised that cap to $12,000. The cap will adjust automatically for inflation beginning in 2018.

Which means a $15,000 piece of jewelry sold in April would have $375 in sales tax, $600 if it were sold now and $750 next year when Monday’s ordinance takes effect.

Under the old cap, the city lost about $275,000 in jewelry sales tax revenue a year.­

Jeremy Hsieh

Local News Reporter, KTOO

I dig into questions about the forces and institutions that shape Juneau, big and small, delightful and outrageous. What stirs you up about how Juneau is built and how the city works?

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