rowing up in California, I never gave it a second thought when I went to the grocery store and did not pay taxes on my fruits, veggies, eggs, milk, meats and packaged foods. Over four years ago, I moved to Anchor Point. When I went to buy food at our local grocery store, I was shocked to see that the food I purchased was taxed.
Not just my paper towels and shampoo, but my actual food. Then several years ago, when I started my natural foods store, I was setting up my cash register and was reminded once again that our groceries were taxed.
In researching the local tax structure, I found that groceries, also known legally as “non-prepared foods,” were taxed during the summer months, but not taxed from September through May because of a citizens’ initiative on the 2008 borough-wide ballot. The initiative had been approved by 60 percent of the voters and was known as the “Grocery Tax Exemption.” When that was passed, the Kenai Peninsula Borough’s 3 percent sales tax was removed from our winter grocery purchases.
The city of Homer also removed their winter sales tax at the time, per the 2008 Grocery Tax Exemption. In doing a little more research, I found that the city of Soldotna still charged people a 3 percent city tax on groceries during the winter. I wondered why that was, because I thought there was supposed to be no tax during that time. Upon further reading on the Internet, I found that back in 2008, just several weeks before that 2008 vote, our borough assembly passed an ordinance that allowed the general law cities to continue to tax groceries in the winter. The assembly had provided a work-around to the cities to counter the voters’ 2008 Grocery Tax Exemption. The Homer City Council had honored the voters’ 2008 exemption at the time, but the city of Soldotna did not.
In studying the history further, James Price, a local borough resident who brought the 2008 citizens’ initiative to the voters, had tried to repeal the borough’s ordinance that was passed by the assembly, which allowed the cities to continue to tax our food. Our borough denied him the right to repeal it and he took the dispute all the way to the Alaska Supreme Court. Just last year, the judge ruled in his favor and the borough had to accept his repeal application. Numerous local volunteers and I worked with Mr. Price to collect well over the required 1,600 local voter signatures to put it on the ballot.
That repeal is now Proposition One on the Oct. 6 ballot. Prop 1 would repeal the borough assembly’s 2008 work-around that disenfranchised voters. It would restore the people’s 2008 vote and require Soldotna to remove its winter grocery tax.
The city of Homer also would not be allowed to tax winter groceries which they currently do not, but the city council passed an ordinance about a month ago that would start to tax some of your winter groceries beginning in January, unless Prop One passes. It has been a long time coming, but that decision will finally be up to the borough voters once again and we hope that Prop One will pass and correct the wrong that the borough assembly did back in 2008.
Tara Kain lives in Anchor Point and volunteers for Alaskans For Grocery Tax Relief Now in Kenai. She was the owner of Anchor Point Natural Foods in Homer.