Homer to Tax Cake, Chips, and Soda Year-Round

Since 2008, the city of Homer, Alaska has provided a seasonal sales tax exemption for non-prepared foods. Such foods were exempt from sales tax during the winter, which in Homer lasts from September 1 through May 31. Not any more.

Effective January 1, 2016, the exemption for certain categories of non-prepared foods is repealed and those foods are redefined as prepared foods. Sales tax will therefore be reinstated at the full 4.5% rate, year-round.

According to Ordinance 15-19(A-2), enacted on July 27, 2015, the exemption has caused a noticeable drop in sales tax revenue “and has required the almost complete elimination of all non-essential City services.”

Sales of the following food products, now defined as prepared rather than non-prepared, are therefore to be subject to tax 365 days a year:

• "Beverages containing less than 50% fruit or vegetable juice, including soft drinks, energy drinks and sports drinks, but excluding dairy and dairy substitute beverages;
• Candy;
• Potato and corn chips, pretzels, crackers and other ready-to-eat snack foods
• Ready-to-eat baked products, including cookies, cakes, donuts, Danish, and muffins, but excluding bread;
• Ice cream, sherbet and other frozen desserts;
• Prepackaged or made to order sandwiches, wraps and salads."

Items still defined as non-prepared foods, such as fresh fruits and vegetables and uncooked pasta, remain exempt from sales tax during the winter months.

Additional information on local sales tax in Alaska is available through the Office of the State Assessor.

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