Fairbanks assembly debates tax on pot sales

FAIRBANKS — Fairbanks North Star Borough Assembly members are set to vote on a tax proposal on marijuana sales next week, but members can’t agree on how much to charge.

The assembly is having a special meeting on Aug. 20 to vote on a tax proposal about what tax rate to put before the voters on the Oct. 6 ballot, the Fairbanks Daily News-Miner reported.

One measure calls for an 8 percent tax, the same rate applied to wholesale tobacco. Another, for a 5 percent tax, the same rate applied to alcohol.

Assembly member Guy Sattley pushed for the higher amount alongside assemblywoman Diane Hutchison.

“Mostly, I want to make very sure that we have enough revenue to cover the costs of this new operation,” Sattley said. “I don’t want to pay for this new business out of property taxes. I want to pay for it out of new revenue.”

Assemblyman Van Lawrence said he’s worried 8 percent is high enough that consumers might turn to the black market to avoid the tax.

“That’s what the initiative was about, treating marijuana like alcohol,” Lawrence said.

The tax going forward to voters in the city of Fairbanks is 5 percent. 

The city of North Pole has a retail sales tax of 4 percent. If the borough adopts a higher tax, it would collect its portion before remitting to the cities their portions.