KODIAK, Alaska (AP) – The Kodiak City Council has voted to raise the city’s sales tax cap by 300 percent to address a $2.8 million budget deficit.
The Kodiak Daily Mirror reports that the raise means sales tax will be collected on the first $3,000 of a transaction, up from $750. The increase lifts the maximum amount of sales tax that can be paid in a single transaction from $52.50 to $210.
The City Council on Thursday also approved an exemption for residential and commercial property rentals from the tax cap increase.
In addition to slashing at the budget deficit, the council says the cap increase will fund future capital needs, including vehicle and equipment replacements, sewer lift stations and the St. Herman Harbor replacement.
Some community members are concerned that the increase will depress retail sales.
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