The City of Wasilla may formally push back against a significant tax overhaul proposed by the Mat-Su Borough. On June 8, the Wasilla City Council is scheduled to consider a resolution opposing Borough Ordinance Serial No. 26-032. This borough measure, which has not yet been approved, seeks to enact a 6.5% areawide sales tax while repealing the existing areawide property tax.

If the borough assembly approves the ordinance by August, the issue would go before voters on Nov. 3.

The borough proposal aims to replace the areawide property tax – currently at 8.485 mills, or about $849 per $100,000 of assessed value – with a sales tax on most sales, services, and rentals within the borough, capped at the first $1,000 per transaction. If approved, it would take effect April 1, 2027, generating an estimated $125 million annually while spreading the tax burden more broadly to include visitors, tourists, and online shoppers.

Wasilla’s primary concerns center on the combined tax burden and economic impacts. The city already levies a 2.5% sales tax on non-exempt transactions, capped at the first $500 (a maximum of $12.50 per sale). Adding the borough’s 6.5% tax would create a combined 9% rate in Wasilla. For a $1,000 transaction, this results in a $77.50 combined tax cap: 9% on the first $500 and 6.5% on the next $500. City officials warn this could discourage retail activity, disadvantage local businesses, and drive consumers to shop outside the borough – particularly in Anchorage, which lacks a general sales tax.

The resolution expresses concern for other borough communities as well. Palmer’s sales tax would rise to 10.5% temporarily (then 9.5%), Houston’s to 8.5%, and Talkeetna’s to 9.5%. The City of Palmer has already passed its own opposing resolution.

Wasilla’s resolution requests that the borough amend its ordinance to impose the sales tax only in areas without existing city sales taxes. It also seeks explicit protections preserving cities’ authority to tax and administer their own levies.

Sponsor of the borough sales tax proposal, Assembly Member Michael Bowles, has emphasized fairness and property tax relief. Bowles, who represents District 1, introduced the measure on March 3, 2026, arguing that skyrocketing property assessments have created an “overwhelming burden” on homeowners.

“I hate property tax,” he stated. “Your home should never be infringed upon.”

Bowles sees the sales tax as a way to capture revenue from non-residents and recreation visitors from Anchorage who use borough services.

The borough website notes that the proposed sales tax plan would not completely eliminate all property taxes, because non-areawide, city, fire, road and special service mill rates would still be in place.

A public hearing on the proposed tax shift is set for June 16. Click here for more details.

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