The Fairbanks Fair Tax Association

Frequently Asked Questions - Proposed 3% General Sales Tax

How much is the proposed sales tax?
3% on all non-exempt sales, rentals and services made in the City, which must first be used to reduce the City base mill levy to zero, then used to provide additional street maintenance and public safety services.

What is the maximum I will pay on a single transaction?
$30.00. Only the first one thousand ($1,000) of the total price of each transaction shall be subject to the sales tax.

How do I know what stores are in the City and what is out of the City?
FNSB Property Data Base »
City of Fairbanks Map »

How much additional staff will it take for the City to implement a sales tax?
We estimate it will require two additional employees and perhaps contractual audit services which normally pay for themselves.

Won't the huge box stores and vacant commercial property owners get a huge break by not paying property taxes?
A reduced base mill levy will encourage construction of improvements to real property in the City - residential and commercial. Given how competitive the local retail scene has become, a lower property tax will allow price reductions that are not possible now.

Will the alcohol and tobacco tax decrease to 3%?
No.

What about the Tax Cap?
The current tax cap allows new taxes that pay for additional services. This proposal only allows base mill levy reduction and then additional street and public safety services up to a maximum of 8 million dollars after property tax revenue is realized.

I am a builder, are the materials exempt?
Yes, if you are a licensed contractor in the State of Alaska.

I own a business, how often do I have to file a report to the City?
Monthly. This may be reduced to quarterly once we have a good track record of proceeds.

What will the sales tax money be used for?
Only for the following: to reduce the base mill levy to zero mills, then for additional street maintenance and public safety services to a maximum of $8 million, adjusted for inflation.

What if there is excess revenue from the sales tax?
Each year, once the maximum allowable tax is received, the sales tax would be suspended. Any excess amounts may not be spent but must be carried over to the following year subject to the same limitations.

What is a mill?
millage is a unit of measurement. A mill is the rate at which tax revenue generated from assessments expressed in terms of 1/1000th of assessed value.

Does the sales tax apply to gaming?
Yes. The tax applies to the operators proceeds minus prizes.

Isn't this a dedicated tax which is unconstitutional?
No. The cities of Juneau and Wasilla limit the use of sales tax revenue in a simillar manner. City Attorney Herb Kuss has approved this approach.

How do we know the sales tax will stay at only 3%?
In order for the sales tax to increase it would have to be voted on by the residents of the City of Fairbanks.