Tax dispute could have far-reaching implications

A tax dispute between a single fishing company and the state of Alaska could have far-reaching consequences for fishing towns across the state, according to a story by KTOO Juneau public broadcasting.

Each year, fleets of factory trawlers and offshore processors catch millions of tons of fish in the North Pacific and Bering Sea. It is not practical to offload fish caught outside the 3-mile limit in open ocean, so it is almost always done in an Alaskan port or onto a transport ship anchored in state waters.

That is where the State takes a cut. The state levies a 3 percent landing tax on the value of the catch; half goes to state coffers, half is shared with local governments.

“It is very important to most all fishery-dependent communities in this area,” said Unalaska Mayor Frank Kelty.

His city is by far the largest recipient of the landing tax. It’s about 15 percent of the city’s revenue.

“If this tax went away, it would be a major hit to the community and would have repercussions on a lot of things that we do,” Kelty said. “But also, it’s the hit to the state of Alaska.”

The landing tax brought in $9,968,676 to the State in fiscal year 2017. A tax dispute between a Washington state-based catcher-processor recently went before an administrative law judge and is the latest effort to dismantle the 24-year-old landing tax.

Fishermen’s Finest Inc. operates two catcher-processors in Dutch Harbor. In a legal brief obtained by KTOO, it argued that the tax violates at least two provisions of the U.S. Constitution. Company representatives, citing the confidentiality of tax appeals, declined to comment.

The Alaska Attorney General’s office is defending the tax. In its own filing, it argues that throwing out the landing tax would reopen a giant tax loophole that would allow the Alaska fleet to catch fish in international waters, bring the catch into Alaska and export it abroad while stiffing the state.

Legal observers say it is an interesting and important case.

Other fishing companies will try to also avoid the tax, said Joe Geldhof, a commercial attorney in Juneau, who upon KTOO’s request reviewed the legal briefs.

“That’s the real fight here.”

He agrees that if the company prevails in the hearing, it would likely be appealed.

It’s not clear when the administrative judge will rule.

Cristy Fry can be reached at realist468@gmail.com.

More in Opinion

Willy Dunne is a member of the Kenai Peninsula Borough Assembly. (Courtesy photo)
Point of View: Vote By Mail makes it easy to vote and hard to cheat

Voting is the most important responsibility we have to ensure a government… Continue reading

Point of View: Foreign exchange experience leads to a more open mind

Bonjour ! Or, in English, hello. Sitting in my garden, during this… Continue reading

Letters to the Editor

Thank you, Mr. Hooker I followed my third grade teacher to Homer.… Continue reading

Point of View: Oil taxes, what oil taxes?

Five years ago, through Senate Bill 21 (SB21), Alaskans were asked to… Continue reading

Point of View: COVID-19 harms children in seen and unseen ways

COVID-19 harms children in seen and unseen ways In this historic pandemic… Continue reading

Letters to the Editor

Community support We’ve all been missing Gary during these stressful months from… Continue reading

Point of View: Homer’s Beluga Slough — A special sandhill crane nesting and viewing area

In the heart of downtown Homer, Alaska, just below the Sterling Highway… Continue reading

Letters to the Editor

Masks also stifle unkind words To the gentleman at the Homer Post… Continue reading

Point of View: Big and small, UA campuses need our support in the recall of governor

“I wonder what the Kachemak Bay Campus will become.”

Most Read