A sign directs voters at Soldotna City Hall on March 5, 2019. (Photo by Brian Mazurek/Peninsula Clarion)

A sign directs voters at Soldotna City Hall on March 5, 2019. (Photo by Brian Mazurek/Peninsula Clarion)

Understanding the ballot: Proposition 2

Voters will decide on whether or not to increase the sales tax cap.

Voters will decide on Oct. 1 on whether to increase the cap on the borough’s sales tax.

Under current Kenai Peninsula Borough code, sales tax is only applied up to the first $500 of a purchase. This cap has been in effect in the borough since 1965. According to the Alaska Department of Labor, $500 in 1965, adjusted for inflation on the Anchorage Consumer Price Index, would be worth about $3,195 in 2018.

The Borough’s sales tax of 3%, when applied to a purchase of $500 or more, adds an additional $15 to the cost of the purchase.

Proposition 2, if passed by voters, would raise that cap to $1,000. If applied under the current tax rate, the maximum amount paid on any given purchase would be $30.

Residential rentals are exempt from the potential cap increase because “it would disproportionately affect tenants of residential property who would pay the higher rate every month,” according to the language of Proposition 2.

The Kenai Peninsula Borough Finance Department estimates this increase in the sales tax cap would generate approximately $3.1 to $3.4 million annually in additional revenue.

On the Oct. 1 ballot, Proposition 2 will read:

“Shall Section 1 of Ordinance 2019-15, increasing the maximum amount of a sale subject to the borough sales tax, other than residential rentals, from $500 to $1,000, be ratified? The maximum amount of residential property rentals subject to the sales tax would remain at $500 per month.”

A “yes” supports increasing the sales tax cap. A “no” opposes the increase.

If enacted, the increase would go into effect Jan. 1, 2020.

More in News

Raymond Bradbury preserves his salmon while dipnetting in the mouth of the Kenai River on Saturday, July 10, 2021. (Camille Botello / Peninsula Clarion)
Kenai River dipnetting closed; Kasilof to close Sunday

The Kasilof River dipnet fishery is reportedly slow, but fish are being caught

Silver salmon hang in the Seward Boat Harbor during the 2018 Seward Silver Salmon Derby. (Photo courtesy of Seward Chamber of Commerce)
Seward Silver Salmon derby runs Aug. 13-21

Last year’s derby featured 1,800 contestants competing across eight days

Rayna Reynolds tends to her cow at the 4-H Agriculture Expo in Soldotna, Alaska on Aug. 5, 2022. (Jake Dye/Peninsula Clarion)
Animals take the stage at 4-H expo

Contestants were judged on the quality of the animal or showmanship of the handler

Emily Matthews and Andy Kowalczyk pose outside the Center for Alaskan Coastal Studies headquarters on Friday, July 29, 2022, in Homer, Alaska. (Photo by Charlie Menke/Homer News)
AmeriCorps volunteers aid Center for Alaskan Coastal Studies

The 10-month commitment pushed them outside of comfort zones

People gather in Ninilchik, Alaska, on Friday, Aug. 5, 2022, for Salmonfest, an annual event that raises awareness about salmon-related causes. (Camille Botello/Peninsula Clarion)
All about the salmon

Fish, love and music return to Ninilchik

Alaska State Veterinarian Dr. Bob Gerlach gives a presentation on Avian Influenza Virus at the 4-H Agriculture Expo in Soldotna, Alaska, on Aug. 5, 2022. (Jake Dye/Peninsula Clarion)
State looks to outreach, education amid bird flu outbreak

Highly Pathogenic Avian Influenza is spreading in Alaska

Fencing surrounds the 4th Avenue Theatre in Anchorage, Alaska, on Wednesday, Aug. 3, 2022. Demolition will begin in August 2022 on the once-opulent downtown Anchorage movie theater designed by the architect of Hollywood’s famed Pantages Theatre. The 4th Avenue Theatre with nearly 1,000 seats opened in 1947, and it withstood the second most powerful earthquake ever recorded. (AP Photo/Mark Thiessen)
Efforts fail to save historic Anchorage theater from demolition

Anchorage entrepreneur Austin “Cap” Lathrop opened the 4th Avenue Theatre, with nearly 1,000 seats, on May 31, 1947

Mimi Israelah, center, cheers for Donald Trump inside the Alaska Airlines Center in Anchorage, Alaska, during a rally Saturday July 9, 2022. Two Anchorage police officers violated department policy during a traffic stop last month when Israelah, in town for a rally by former President Donald Trump showed a “white privilege card” instead of a driver’s license and was not ticketed. (Bill Roth/Anchorage Daily News via AP, File)
Alaska officers violated policy in ‘white privilege’ stop

The top of the novelty card reads: “White Privilege Card Trumps Everything.”

Ashlyn O’Hara / Peninsula Clarion file 
Alaska LNG Project Manager Brad Chastain presents information about the project during a luncheon at the Kenai Chamber Commerce and Visitor Center on July 6.
Local leaders voice support for LNG project

Local municipalities are making their support for the Alaska LNG Project known

Most Read