<figure class="wp-caption aligncenter" id="attachment_345676" style="width: 830px;"><figcaption class="wp-caption-text" id="caption-attachment-345676">Phil Gouvey checks out groceries at Foodland IGA on Wednesday, Nov. 19, 2025. (Photo by Clarise Larson/KTOO)</figcaption></figure>

Before Thursday, when you would grab some groceries or pay your utility bill, Juneau’s city government taxed most residents at 5%. But now, that tax has dropped to zero percent for everyone, regardless of their income or age.

That’s because of a ballot measure that was approved by voters during this fall’s election to remove the local sales tax on essential food and residential utilities.

Phil Gouveia was buying groceries at Foodland IGA on Wednesday afternoon. He said he’s excited for the changes and to see some extra cash back in his pocket. 

“Yeah, it’s gonna help me. I’m 70 years old. I’m on a pension, so groceries keep going up, but my pension doesn’t,” he said. 

The exemptions officially take effect on Thursday, 30 days after the fall election results were certified. The proposition passed with nearly 70% of voter approval. 

Deputy City Manager Robert Barr said the roll out of the exemptions should be pretty hands-off for most residents. He said the city is working with businesses on implementing it, but it may take some time before all retailers are under the new system. 

“Our goal was to implement this in a way that was as easy for residents as possible, so most residents shouldn’t have to do much, if anything,” he said. 

The exemptions apply to the same food items that qualify under the Supplemental Nutrition Assistance Program, also known as SNAP or food stamps. That includes foods like fruits and vegetables, meat and dairy, bread and cereals — and cookies and ice cream. But it doesn’t cover hot food — like a rotisserie chicken — or meals from restaurants.

“What qualifies as food is largely groceries, things that you would buy from the grocery store and prepare at home, or things that are intended to be consumed off-site,” he said. 

The utilities exemptions apply to residential electricity, heating oil or propane, water and sewer and garbage and recycling. 

Alec Mesdag is the CEO of Alaska Electric Light & Power, or AEL&P, Juneau’s sole electricity provider. It serves more than 16,000 customers. Mesdag said the logistics of rolling out the exemptions are challenging and complex due to AEL&P’s large number of customers and having to verify which accounts are for residential use versus commercial. 

Despite that, he said the company is actively working with customers to ensure those who are eligible receive the exemption as soon as possible. 

“What we intend to do is go through our list and apply the exemption as broadly as possible, but excluding certain accounts that appear to us to be highly likely to be not eligible to receive the exemption,” he said.

Mesdag said AEL&P is sending out letters to customers to inform them which accounts have received the tax exemption and which have not.

While the exemptions are expected to put some extra cash back into residents’ wallets, it in turn means the city is expected to face a $6.4 million hole in its budget this fiscal year. And, each year moving forward, the city will face an estimated $12 million revenue loss from both the tax exemption on food and utilities and the separate cap on the city’s property tax rate that voters also passed.

City officials and the Juneau Assembly will be grappling with potential service cuts in the coming months.