The Haines Assembly is considering ‘sin taxes’ on tobacco, marijuana and alcohol. But the assembly members are not on the same page about which of those products should be taxed.
The initial excise tax proposal deals with tobacco and marijuana.
Borough staff looked at the taxes municipalities like Juneau and Sitka have in place.
Using that information, manager Debra Schnabel suggested a $2 excise tax on packs of cigarettes and a tax equivalent to 45 percent of the wholesale price on other tobacco products. She recommended a $5 per ounce tax on marijuana.
Recently-appointed Assembly member Sean Maidy was fine with the tobacco tax, but he said a pot tax could inhibit a new local industry.
“I don’t want to tax a small business to death before we give them a chance to grow,” Maidy said.
Three Haines residents have applied for five marijuana business permits with the state. Three are for cultivation and two are for retail.
“What I’m suggesting for you to think about is to give the people that are going into this new industry, maybe consider a two-year tax waiver until we find out if we’re going to make any money,” Waldo said. “I mean, there’s no point in killing the goose before it’s laid the golden egg.”
The State of Alaska already imposes a $50 per ounce excise tax on marijuana cultivation businesses.
The assembly also debated whether to levy an additional tax on alcohol. The most plausible mechanism is a sales tax, which would require a public vote. That was not added to the excise tax ordinance.
The pot excise tax would be charged on the sale or transfer of marijuana from a cultivation facility to retail store. The tobacco tax would be paid by the distributor who brings the product into the borough. Those expenses would likely affect how much consumers pay.
The assembly was split on whether to remove marijuana from the excise tax ordinance. Mayor Jan Hill broke a tie vote in favor of keeping pot in the proposal. She said she wants the public to have a chance to comment.
Residents will have the opportunity to voice their opinions on ‘sin taxes’ during public hearings at assembly meetings on July 25 and Aug. 8.
There is also a committee meeting to discuss marijuana businesses and whether Haines should impose any restrictions on the new industry. That meeting is set for July 24.