Editor’s Note: Following a community forum, the Homer Chamber of Commerce board of directors voted to oppose a boroughwide bed tax. The following is the letter the board sent to the Kenai Peninsula Borough Assembly.
Kenai Peninsula Borough Assembly Members,
The Homer Chamber of Commerce board of directors, on behalf of more than 500 members, would like to express its opposition to Ordinance 2014-25, which would establish an areawide transient accommodations tax (bed tax).
The Homer Chamber hosted a forum on Thursday June 26, 2014. The purpose of the forum was to provide an opportunity to educate ourselves, our members, and the public regarding this Bed Tax ordinance. Those in attendance were offered an opportunity to comment on this proposed ordinance. During the comment segment, that was about one hour, individuals representing multiple industries spoke. One hundred percent of the testimony was opposed to this ordinance.
Due to the fact that this ordinance targets the lodging industry, lodging owners and guests will disproportionately be burdened with an additional tax.
The lodging industry is not subject to the current sales tax cap. This means that 100 percent of sales generated by the lodging industry are taxed at the current sales tax rate.
It is very likely that lodging owners contribute higher than average property taxes due the increased value of these types of properties.
Another fact that is of significant concern is that the funds collected from this tax can be reallocated at any time. There is no guarantee that these funds will be used to promote tourism and there is no guarantee that these funds would return to the cities in which they were generated.
The Homer Chamber of Commerce is dedicated to keeping the Kenai Peninsula a highly competitive destination in Alaska. We understand the importance of marketing our community in Alaska, other U.S. states and the world. However, the bed tax proposed in Ordinance 2014-25 is not the method to achieve these goals.
Mike Barth, president
Homer Chamber of Commerce