Ketchikan, a thriving cruise port on Alaska’s southeast coast, will quickly start gathering a gross sales tax on gadgets bought onboard cruise ships whereas the vessels are docked within the harbor.
The favored port in 2003 exempted cruise ships from having to fork over the two.5% native tax, however on February 24, 2025, the Ketchikan Borough Meeting voted to rescind the exemption.
The brand new coverage places Ketchikan in keeping with different Alaska cruise ports that at the moment cost a gross sales tax, similar to Juneau, Sitka, and Skagway.
By voting to approve the ordinance that reverses the 20-plus-year-old coverage, the town expects to gather as much as $300,000 per yr from the gross sales tax.
Having the exemption in place meant that friends who purchased items from native, onshore retailers had been paying an area gross sales tax, however those that bought gadgets on their ship didn’t. The reinstatement of the tax ranges the enjoying area, supporters say.
The tax, which takes impact on April 1, 2025, formally suspends the exemption.
“Ordinance 2060 amends KGBC 4.50.230 (Exemptions) by eradicating subsection (y) which gives exemption [on] gross sales of products that are transported into the borough on a cruise ship, which don’t depart the cruise ship, and the place your complete transaction, each fee and supply, takes place on board a cruise ship,” states the Ketchikan Borough Meeting assembly agenda.
Again in 2003, when the exemption was authorized, Ketchikan acquired about 800,000 cruise passengers per yr. In 2024, the quantity was 1.5 million, which means that implementing the gross sales tax is at the moment a extra profitable enterprise.
Ketchikan’s gross sales tax fee of two.5% is decrease than that of others alongside the Alaskan coast. In Juneau, as an example, the gross sales tax collected from onboard purchases is 5% and there’s an extra 3% tax on alcoholic drinks, the assembly agenda famous.
Some cruise traces that don’t want to be in competitors with shoreside companies or that don’t select to gather an area tax shut down their retail retailers and eating places whereas docked. Native retailers usually applaud such motion, because it means cruisers will extra probably purchase meals, souvenirs, and different items from them.
The thought to reinstate the onboard gross sales tax got here to mild in January 2025, when the municipal Cooperative Relations Committee reviewed a workers report calling for the repeal of the 2003 coverage. The report shaped the idea of the ordinance that was simply authorized.
Gross sales Tax Income Will Be a part of Passenger Wharfage Payment
The return of the cruise ship gross sales tax assortment will add to Ketchikan’s cruise-tourism income stream, which already features a cruise arrival head tax.
Learn Additionally: What’s the Greatest Cruise Line for Alaska?
Since 2021, the native authorities has charged an arrivals tax, which it calls a “passenger wharfage payment.” The cost initially was $9 per passenger on any cruise ship that docks at a city-owned or leased dock. The payment was raised to $11 per visitor in 2024, and on April 1, 2025 it would rise once more to $13.
Passengers who arrive in Ketchikan by way of tender, from ships anchored offshore, had been charged a $6 payment when the coverage was carried out in 2021. That payment was raised to $8 per visitor in 2024, and on April 1, 2025, it rises to $10 per visitor.
Different Alaska cruise locations levy arrivals charges, too. Juneau fees $8 per visitor, for instance, whereas Haines fees $9.
Ketchikan is included on just about all Alaska cruises. It’s best identified for internet hosting the Totem Heritage Heart, which celebrates the artistry of the Tlingit, Haida, and Tsimshian native peoples.
The vacation spot can also be thought-about the salmon capital of the world since salmon spawn in Ketchikan Creek, which runs via the town.
