The Sitka Assembly approved a new ordinance Tuesday night (6-23-26) that clarifies the sales tax responsibilities of local business owners. 

City staff say current code doesn’t clearly reflect the full range of business ownership structures. The new ordinance expands the listed business types and makes business owners individually responsible for debts – or delinquent taxes. 

Municipal Administrator John Leach said when someone starts a local business, they have to get a business license from the State of Alaska. Then, they register their business in Sitka by getting a sales tax account. 

“When you get that sales tax account, the reason we need the personal guarantee is because we are essentially approving you to act as an agent on behalf of the city,” Leach said. “So we need that guarantee that you, acting on our behalf, are going to collect that sales tax, and you will then remit it back to the city, acting as our agent.”

Finance Director Brooke Volschenk said sales tax is unique since businesses collect it from customers and hold onto the funds until they give it to the city at a later date. A personal guarantee would provide an extra mechanism to hold business owners accountable for those funds if their business ceases operations or doesn’t have sufficient assets. 

Volschenk said this is essentially a “housekeeping” update that aligns city code with current practice and provides greater clarity and consistency for both staff and business owners. 

Mayor Steven Eisenbeisz said as a local business owner, he doesn’t like personal guarantees, but still voted in favor of the ordinance. He said it will only come into play if someone is a “bad actor” and doesn’t remit their sales tax to the city like they are legally obligated to do. 

“I could collect $30,000 in sales tax from our citizens, and then disappear, and there’s no recourse for the municipality,” he said. “What this does is make sure that if I disappear with that money, that the municipality can then use tools to come after me personally, not just my business, right? Because that is money that is collected and is supposed to be remitted to the municipality. It’s not my business’ money. Never has been, never will be.”

The issue will come back to the assembly table for a second and final reading at its next meeting.