Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

In a 5-1 vote, the Haines Borough Assembly repealed the $5-per-ounce excise tax on marijuana in an unconventional way, by reducing the tax to $0 per ounce, and will soon consider an ordinance that would ask voters if they want a special sales tax on retail marijuana.

The borough hasn’t collected any marijuana taxes on cultivators because staff were confused as to whether or not the assembly wanted to tax only local growers, or all growers who sell to local retailers. Borough manager Debra Schnabel asked the assembly to clarify its intent in August.

The assembly later voted to add language to the tax ordinance to levy an excise tax on growers within the borough.

The issue was later rehashed in multiple committee meetings. Based on discussions in those meetings, the majority of assembly members decided they didn’t want to tax local growers, but rather place a sales tax on marijuana at the retail level—a tax that would require a vote.To keep local growers from being taxed in the meantime, staff asked the assembly to reduce the excise tax to $0.

“The only way that we can see to do that expeditiously, i.e. without starting the whole process all over again, was for you to amend this ordinance to levy an excise tax of $0 per ounce,” borough manager Debra Schnabel said at Tuesday’s regular meeting. “If you amend it to $0 per ounce you basically eliminated the excise tax for the local grower.”

Assembly member Heather Lende voted against the amendment. She thought it was always clear the assembly intended to tax all cultivators who sold marijuana to local retailers.

“I voted against it because another option besides the sales tax is to basically charge an excise tax on all growers selling into the Haines Borough,” Lende said. “I just struggled with the idea that we were going to give up a tax on marijuana for probably a year now until people can vote on it when I believe that was the promise of legalizing it, when there would be some [additional] revenue.”

Local retail and cultivation marijuana industry representatives argued against an excise tax at a finance committee meeting in October.

Fairbanks, Juneau, Anchorage Mat-Su and Ketchikan have sales taxes on marijuana products instead of excise taxes.

Other cities in Alaska that charge an excise tax are Petersburg, at $25 an ounce, and Houston at $10 an ounce, according to an informal CVN survey. The state keeps no records on such taxes.