Adak Banks on More Business with New Fish Tax

Wednesday, January 16 2013

Voters in Adak approved the first raw fish tax in the city's history just before the end of last year. City manager Layton Lockett says the new, 2 percent tax will bring the city in line with the rest of the region.

“We want to create an environment where operating in Adak is the same as operating in Unalaska, and Sand Point, and Kodiak, and Southeast, where you have a raw seafood or a fish tax, and this is how it’s administered, this is how it’s collected, you have a rate for it, and boom, done.”

Previously, Adak taxed seafood at 4 percent -- the same rate as other goods bought and sold within the city. But Lockett says that administration of the sales tax was complicated, and that fishermen balked at the higher tariffs.

The city stands to lose a quarter million dollars, or almost 15 percent of its annual budget, with the new tax, but Lockett says that shouldn’t impact city services. And he hopes at least some of that money will come back in the form of increased offloads to the port.

“You know, last year was a great year, so the mindset is ‘this is still new revenue.’ So, we’re taking it from the standpoint of ‘let’s do this now, revenues are coming back from this type of industry, and so let’s not be too expectant of it? Let’s take the hit now and then get in the volume and start working that route.’”

The city is still trying to figure out exactly how it will measure the correlation between lowering the tax rate and attracting new fisheries business, but Lockett says generally speaking, it should be pretty easy to gauge.

“There’s not too much that we don’t know about in this town, so if we start seeing more boats, you know, and fishermen talking about how they came because it’s cheaper, or it’s closer and the owners say [the fishermen] can come in.”

The revised tax rate will impact fishermen delivering to Icicle Seafoods, which has a shore-based processing plant in Adak, and also boats delivering to any processing or transport vessels that tie up within Adak city limits. Total fish tax revenues are projected to be $250,000 annually.

Thirty-five voters turned out for the special election on December 18, and Lockett says all but three of them were in favor of lowering the tax rate.

Realist on Saturday, January 19 2013:

that apparently didn't work out for them didn't it?

John Schroeder on Saturday, January 19 2013:

The fishermen are already taxed regionally by the stste.

The original thought behind the sales tax was to tax the sales of the fish processor. As value added product, that would have been more beneficial to the community than taxing the fishermen a raw fish tax in addition to the state tax they are already assessed. The thought being that the processors pretty much escape paying any production taxes and the fishermen get nailed every place they deliver.

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