Sectional Analysis of HB 132

An Act relating to a municipal taxation of alcoholic beverages.

Section 1 AS 04.21.010(c) (2). Is an addition to the current exceptions regulating the municipalities ability to tax alcohol. It states that municipalities will have the ability to impose a sales tax on alcohol that is equal to, higher, or lower than an existing sales tax. This section removes the existing requirement that a general sales tax be in place before a sales tax can be placed on alcohol.

Section 1 AS 04.21.010 (c) (3). Was a "grandfather" clause that allowed municipalities that had an existing sales tax in effect prior to July 1, 1985 to tax alcohol. This section will be deleted, as this legislation will allow all municipalities to place a sales tax on alcohol.

Section 2 AS 29.45.650 (a). This section states that a borough may levy and collect taxes within the borough's jurisdiction with three exceptions, AS 04.21.010 (c) and AS 29.45.650 (f) and (h). Since AS 04.21.010 (c), this bill no longer restricts a municipality's ability to place a sales tax on alcohol, the presence of AS 04.21.010 (c) will be deleted.