Retailers ask for reconsideration of sales tax free days
Petersburg Chamber of Commerce Retail Committee Chairperson, Savann Guthrie, requested that the Petersburg Borough Assembly reconsider their decision on tax free days Monday evening during the regular meeting.
Guthrie gave the Assembly an alternate date of Oct. 5 for consideration in the future.
“I was quite shocked when there wasn't even a motion made on the ordinance for the sales tax free day,” Guthrie stated. “I believe the Assembly made a mistake in not approving the sales tax free day.”
Guthrie explained that she was there representing the 97 retailers that make up most of the businesses in Petersburg, especially in the downtown area.
“These same businesses that collect and account for the Borough's sales tax day by day, month by month and year by year,” Guthrie said. “I always believed that because of the sales tax, the retailers and the Borough had a symbiotic relationship and within this relationship the retailers have not asked anything of the City.”
She explained to the Assembly that this ordinance was the first item that would help and support the businesses of the Borough.
“In Petersburg, we as retailers, not only have to compete with Juneau and Seattle, but with online shopping as well,” Guthrie stated. “This causes the businesses of our community to have to work harder to keep the money local.”
Guthrie took the Assembly on a visual tour of Main Street and asked them to consider what downtown would look like without the many retail businesses that line the street.
“As retailers we deserve respect for what we do,” Guthrie stated. “In 2012 alone, my business donated to over 14 local causes and that is not all that asked and I am only one business. As retailers, we support the community that supports us.”
Guthrie explained that the Borough did not lose $28,000, which was stated at the May 6 meeting but, in fact, lost exactly $23,979.85.
“That may sound like a lot, but with the loss of taxes, here is how much money went through our community on that one day in May last year, $227,358.65 is what actually passed through the businesses that day and in October $172,305.50, which means that in just those two sales tax free days $399,664.15 went through our community,” Guthrie stated. “It has been stated that every dollar that is spent in our community will circulate five to seven times before it leaves town. That is a lot of money.”
Guthrie referred to the exclusion of sales tax free days as putting a finger in a dam to stop a leak. The problem isn't being fixed it is just one of the most obvious and easiest fixes and eventually another problem or leak will arise.
“These days have been voted on by the constituents,” Guthrie stated. “These are the same people that voted for you to sit on this Assembly. One year of tax free days is not enough to see the true outcome of them.”
According to Guthrie, the retailers downtown are being affected daily by the construction and sales have been affected by this.
“We are asking that you set Oct. 5 as the next sales tax free day,” Guthrie requested. “We are hoping you will find the value in what the rest of us see.”
Petersburg Chamber of Commerce President Fran Jones wrote a letter to the Assembly stating that retailers reported that the last two sales tax free days have proven to be a success by increasing store traffic, and more importantly, by increasing sales.
“Their ability to discount merchandise along with the waiver of sales tax, has given retailers a more competitive edge with e-commerce and stimulated the economy in Petersburg,” Jones wrote. “On-line purchases are exempt from local sales tax and in many cases, free shipping is also offered.”
Petersburg Borough Assembly member Sue Flint agreed that the people of the borough did vote for this but it is only their job to consider it.
“I did consider this ordinance,” Flint said. “I could not support this sales tax free day for the middle of May.”
Flint explained that she would like the Chamber of Commerce members and Retail Committee to come prepared, months in advance, with a date in order for the Assembly to discuss it.
“I still believe it is a terrible idea,” Flint stated. “But when voters are given a chance to not pay taxes, they will jump on it.”
Flint provided a report to some business owners stating that sales tax holidays may be politically expedient but are poor tax policy.
“These days don't really help any of the low-income people because they don't have the money to hoard up for that one day as the more wealthy people do,” Flint said. “As far as losing businesses, we just passed a budget with $2 million in community services. Isn't that good will?”
Flint asked where the loss should be cut from the budget.
“My request to the Chamber of Commerce is to come early, set your dates early and don't set a date for the middle of May,” Flint said. “I think you could have a sale in February or March. Work with us here, folks.”
The Assembly has decided to form a Sales Tax Review Committee in order to look at the current sales tax ordinance as it relates to changing commerce and changing economic needs in Petersburg.
The Petersburg Borough Assembly is looking for volunteers to sit on the committee.