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Business/Economy

Kenai Peninsula hospitality businesses oppose plan for bed tax

KENAI - Members of the Alaska hospitality industry have spoken out against a proposed bed tax, a report said.

Hospitality property operators on Kenai Peninsula spoke against the plan at a Kenai Peninsula Borough Assembly meeting Tuesday, The Peninsula Clarion reported.

The 12% bed tax introduced at a May 7 assembly meeting would exempt temporary lodgings including motels, hotels and bed-and-breakfast businesses from the general sales tax rate, officials said.

In Alaska, 49 cities and boroughs have a bed tax ranging from 4% to 12%, the newspaper reported.

The tax was proposed to close budget shortfalls and would generate more than $1 million in additional revenue in fiscal year 2020 and more than $4 million in the next two fiscal years, officials said.

"These additional sales taxes would be used to support education," Assembly Vice President Dale Bagley wrote in an April 25 memo. "They would also make other revenues available for services funded by property taxes and help to sustain the general fund."

The ordinance unfairly targets an industry already exempt from the borough's general sales tax, business operators said.

“To single out the largest property tax payers is blatantly unfair,” Mike Warburton said.

Others expressed frustration with a proposal during peak hospitality season.

"Here we are in June, we're all trying to get ready for our season, we're all trying to train employees," Adriene Sweeney said. "We are exhausted and tired of this."

The assembly postponed a vote for two weeks to gather more input from municipalities.

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