In raising the limit on purchases subject to sales tax to $5,000 — the current cap is $3,000 — the assembly removed a provision from the ordinance that would have raised the taxable limit on work at the Marine Service Center to $50,000.

Under the new rules that will take effect on Oct. 1, a $5,000 purchase of goods or services in town will be subject to $350 in sales tax at the 7% rate, an increase from the current $210 tax bill which shuts off after $3,000 in any one purchase.

The ordinance approved by the assembly on May 27 also extends the reach of the municipal sales tax to include sales aboard cruise ships while they are tied up at the City Dock or within three nautical miles of borough land.

The $50,000 cap on taxable work at the Marine Service Center — which was not very popular at the May 27 assembly meeting — would have produced a $3,500 sales tax bill on a $50,000 repair or rebuild job.

In removing the marine work provision from the sales tax ordinance, the assembly set a work session to discuss the economic value to the community of the Marine Service Center for 6 to 7 p.m. Tuesday, June 10, at City Hall.

Assembly Member Bob Dalrymple spoke against adopting the higher taxable limit for marine work, noting he is concerned about doing anything that could hurt Wrangell’s business competitiveness.

Assembly Member David Powell voiced the same concerns about keeping the town competitive to attract the work.

Dave Miller, of Dave’s Welding and Repair, said setting the taxable cap at $50,000 is too high.

After paying to have their boats hauled out of the water, storage fees during repair work at the yard and other expenses, some boat owners may take their work elsewhere, Miller told the assembly. The borough may lose more in spending that leaves town than it gains in increased tax revenues, he said.

Don Sorric, of Superior Marine Services, said all communities have a tax limit, but not $50,000. If the borough needs more money for the Marine Service Center, it should raise rates at the facility, he said. Or raise the taxable limit for everyone.

“It makes me feel singled out,” said Sorric, who has worked at the center for 19 years.

“To add an additional $3,500 on a job that is already costing them a lot of money … it definitely looks like the Marine Service Center is being singled out,” said Assembly Member Phillip Mach.

“The seafood industry is already struggling … they are pinching every penny,” Mach said of commercial fishing boat owners.

Mach, who works at the Trident Seafoods plant in Wrangell, made the motion to remove the Marine Service Center provision from the sales tax ordinance.

The amendment passed 6-1, with Assembly Member Jim DeBord voting no. The amended ordinance passed in a 7-0 vote.

The borough put $40 million in state and federal grant funds into developing the Marine Service Center almost 20 years ago. Borough Manager Mason Villarma reminded the assembly that the borough should be collecting enough in user fees and taxes so that it can afford to replace expensive equipment that ages out at the facility.

There was some support on the assembly for a higher taxable limit at the Marine Service Center.

Assembly Member Michael Ottesen said it is “insane” to collect only $350 in sales taxes (7% at the new taxable cap of $5,000) on a $200,000 boat contract.

“If you can afford a job like that, what’s $3,500?” he said of the 7% tax on $50,000.

Work at The Marine Service Center generally averages between $25,000 and $50,000 per job, Villarma told the assembly at its May 13 meeting.

Raising the taxable limit on work at the Marine Service would raise an estimated $150,000 to $200,000 a year in additional sales tax revenues, borough officials said.

The other two provisions — raising the taxable-purchases cap to $5,000 and extending collections for sales aboard cruise ships — could raise $30,000 to $40,000 a year, according to the borough.