The Haines Borough Assembly is considering changing the tax code. The change would require nonprofits to collect sales tax on the merchandise they sell.

Mayor Tom Morphet explained the reasoning behind the proposed change.

Morphet: “The discussion that we’ve had in the past few days is to target essentially places where there are nonprofits’ sales that are directly competing or seemingly competing with the private sector. And my own thoughts on that wawa to direct this tax towards merchandise and food and beer. Because that’s where there is the competition. I think there was a legitimate fairness question.”

Morphet emphasized the borough ultimately needs revenue.

Morphet: “We can’t run this government on air and noodles.We need cash, just like you need cash.”

Many residents working and volunteering for nonprofits came to push back against the proposed changes. Haines’ Friends of Recycling’s Melissa Aronson, spoke.

Aronson: “This ordinance, if passed, will place a bookkeeping burden on the nonprofits and wont raise enough money to make a difference to the borough.”

Chuck Mittman is involved with many nonprofits, he cited the example of the senior village.

Mitman: “Does that mean, because it’s a nonprofit, but we collect rents, that the rent is going to go up on that, there are a lot of variables that I don’t understand.”

The Fair’s Amanda Randles asked that the matter be delayed.

Randles: “Please allow us to get through our current year with the budgets that we have. The fair is a month away, give or take, and due to various logistics, if we had to charge sales tax this year, our budget would take a huge hit, I don’t see any other way around it. We are just not prepared for this, but given time, we could be.So I’m asking that it please be put of until the 2025 calendar year.”

Jila Stuart, who oversees the borough’s finances, said that code is already written such that some critical services would remain tax exempt,   

Stuart: “There are a lot of exemptions in code,and one of them is and exemption on long term rentals longer than nine months, and also medical and veterinary services performed by a licensed physician are exempt from sales tax.”

Assembly member Debra Schnabel pushed back against the view that the borough is setting out to tax nonprofits.

Debra: “Tonight, the tax on nonprofits that was stated out by nine people that testified, nobody is talking about taxing nonprofits. We are talking about asking consumers, me, you, everyone who buys stuff, to pay a sales tax.”

Mayor Morphet said many other communities around the region already request nonprofits to charge a sales tax. The assembly then voted 4 to 1 to send the matter to the finance committee.