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Date Posted: 11:24:10 02/28/05 Mon
Author: Don Johnson
Subject: Bed Tax & Sales Tax Cap.

Below are some responses to the Kenai Peninsula Borough proposed new taxes.

From: ccpwow@gci.net
Sent: Monday, February 28, 2005 8:01 AM
Subject: Ordinance 2005-05

Below are two responses to the KPB's proposed new Bed Tax.
Please feel free to post your response to the proposed Bed Tax & Sale Tax Cap.
Both will be brought up at the KPB's March 1, 2005 meeting.
--------------------------------

Dear Editor:

I see that Kenai Peninsula Borough Representative Betty Glick has proposed a bed tax
for our Borough. I have a few questions. Why would we want or need a Bed Tax?
Why is Representative Glick attempting to call a Bed Tax a Transient Accommodation Tax?
Is the KPB in such desperate financial need that it needs to dream up new taxes?
I would like to know why we have not also seen Representative Gick's list of unnecessary KPB
spending which may be eliminated?
I would like to know why she has not also proposed a Transient Electric Tax, Transient Restaurant Tax,
Transient Laundry Tax, Transient Food Tax, Transient Transportation Tax or a Transient Gas Tax?
Do I really need to continue?

I can assure you that no person appreciates being singled out for special taxation.
I can also assure you that Kenai Peninsula visitors will not appreciate being singled out in this way.
Please try thinking about it; you are in the lower 48 and are hungry so you order a burger and the
restaurant tacks on an 18% Transient Restaurant Tax to your bill because the city believes a lot
of visitors eat burgers. I don't care who you are, nobody would enjoy paying an 18% sales tax on a burger.
People desiring fishing and lodging services within Soldotna have already had their sales tax doubled
but a Bed Tax would instantly double it again.
If Representative Glick really believes this type of sales tax practice is "ok", why doesn't she just ask the
Borough to triple the Borough's current general sales tax?
The reason is pretty plain, the entire Borough would never stand for tripling its general sales tax.
The thought here is that the Transient World is not here and will never say a word about it.

There are tens of thousands of KPB residents who are paying their bills from sales to the Transient World.
Anything the Borough does to make those sale more difficult reduces their income and therefore reduces
the sales tax they send into the Borough. This discriminatory Bed Tax would greatly impact our
businesses and reduce the sales tax we send to the KPB. The city of Kenai discovered this when it
started a "Room Tax". I believe most will agree that Kenai has made some very bad mistakes regarding
taxes and their Bed Tax ended up costing them money as many people just avoided it by lodging in Soldotna.

Our local businesses are still attempting to recover from the MANY 2004 tax increases which
have been dumped on them from our state and city governments.
In Soldotna we historically only paid 5% on our fishing & lodging sales with a max. sales tax of $25 on
the $1,000 combined sale. This sale would have been only charged a total of a $25 max. tax before but with the
recent sales tax increase, now is doubled to $50. This same sale must now be broken down into a $500 fishing sale
and $500 lodging sale thus charging $25 + $25 = $50 maximum sales tax for the same sale.
Sport fishing packages are now charged an effective 10% sales tax. An 8% Bed Tax would
in effect almost double it again to 18%. Is this really what Representative Glick is attempting to do?
Is it her personal mission to drive lodging business out of the KPB?

Why lodge down on the KPB when you can stay somewhere else for less or even zero tax?
$1,000 worth of lodging could receive as much as a $180 discount if booked somewhere else.
That discount could mean a free day trip fishing or sightseeing. Do you really believe that people
are not smart enough to figure out how to get more value out of their vacation dollar?
I have been marketing within the sport fish industry for over 20 years and it is a fact of life, a guest can
actually be directed towards or away from a business for as little as 5%.

I understand that some may see an area visitors with a giant bulls-eye on their backs when it comes to paying
for the Borough's latest need for instant cash. I see our visitors as the goose which keeps lays the golden eggs.
It is not logical to create things which motivate visitors to vacation somewhere else.
I believe Representative Glick's Bed Tax idea will cost the Borough money and if there is a real financial problem
I would rather see our Borough figure out a few things which can be pulled out of its latest budget.

Respectfully Submitted

Don Johnson
P.O. Box 876
Soldotna, Alaska 99669
ccpwow@gci.net

---------------------------------------------

----- Original Message -----
From: Agil4u2fish@aol.com
To: ccpwow@gci.net
Sent: Sunday, February 27, 2005 10:59 AM
Subject: Ordinance 2005-05


Sir:

We are totally opposed to this 8% sales tax (Bed Tax) that has been proposed by a member of the Borough Assembly.

This is a direct attack on a small group of small businesses in the Borough, who may not be able to protect themselves from this devastation. It is very possible that some of the bed and breakfast businesses may close and surely no new ones will open. This will present a loss to the Borough, just as it did to the city of Kenai when they started a "Room Tax" that ended in devastation to Kenai.

A short time ago, most bed and breakfast places sold a vacation package that included lodging and sport fishing and charged a 5% sales tax. Recently the Borough Assembly forced these small businesses to split these package sales and pay 5% sales tax on sport fishing. This doubled the sales tax. This latest ordinance will again increase the lodging sales tax by another 8%. That's 5% lodging sales tax, 5% sport fishing sales tax plus the proposed 8% sales tax on lodging. This is an unbelievable 18% sales tax.

These small business owners have to compete with Mexico, Canada and many places in Alaska and the United States where there is little or no sales tax at all. We just can not compete. We need some help.

To this writers knowledge, the sponsor of this ordinance will never have to collect, file or pay this extravagant sales tax. The sponsor will not lose one paying customer and will not have to spend one dime of personal money to damage and/or destroy these small business owners through out the Kenai Peninsula Borough.

These small businesses have brought many millions of dollars into the Kenai Peninsula Borough economy. The "Trickle Down" from this money has put millions of dollars into the Borough's bank account.

On the other hand, we have owned and operated a bed and breakfast business in the Borough for 22 years and we have never received one reservation or one dollar of help from the Borough for our business.

Our group of small businesses are asking for help from the voters and tax payers of the Kenai Peninsula Borough. Enough taxes is enough and we don't need anymore.

Herman & Irene Fandel
Irene's B & B
Kenai, Alaska 99611
Agil4u2fish@aol.com

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