Alaska Fish Tax Increase Challenged

Legislation requested by Alaska Gov. Bill Walker that would boost fish taxes – some say as much as 33 percent – prompted the seafood industry this week to tell legislators that the measure is unacceptable in its present form.
In advance of the Alaska House Special Committee on Fisheries’ hearing on Feb. 23, the Pacific Seafood Processors Association, Alaska Longline Fishermen’s Association and the Alaska Trollers Association submitted written comments noting the international marketing challenges already facing their industry, and calling for new or increased taxes to be balanced and equitable to all industries.
Alaska is facing huge fiscal challenges due to the drop in oil prices and oil production, and the state is looking at every option for lowering that budget deficit.
Vince O’Shea, a vice president of Pacific Seafood Processors Association, told legislators that deciding how and where to implement increased taxes on the seafood industry is a complicated issue, and that House Bill 251 is an over-simplified approach. While some have said it is a 1 percent tax increase, in fact it increases our taxes on different fisheries from 20 percent to 33 percent, he said.
O’Shea said that new or increased taxes must be balanced and equitable to all of Alaska’s industries, and must consider the total contribution they make including taxes paid, total employment, sustainability, and economic opportunity. Moreover, he said, they must consider the impacts on the economic viability of the industries being taxes.
Linda Behnken of the Alaska Longline Fishermen’s Association and Dale Kelley of the Alaska Trollers Association also testified in opposition to the bill in its current form. Behnken noted that under the current tax structure, fisheries that are labor intensive, high value and Alaska-based, such as longline halibut and sablefish fisheries or the troll salmon fishery, pay a disproportionate share of the tax burden.
She suggested that the committee review and revise the tax policy for state fisheries, and that the committee consider establishing a minimum or floor fee based on pounds harvested, rather than finished value.

Based on data provided to the committee, this revision to the tax basis would increase returns to the state and remove existing penalties to value added onboard procedures, she said.