Chapter 4.08 SALES TAX AND UNIFORM ALASKA REMOTE SELLER SALES TAX

The purpose and intent of the tax imposed under this article is to raise revenues. The scope of the tax levied shall be broadly interpreted and exemptions shall be allowed only when the transaction clearly falls within an exemption defined in this article. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 16-03 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.010 Definitions.

For the purpose of this article, the following words and phrases shall have the meanings respectfully ascribed to them by this section:

“Buyer, consumer or person” means, without limiting the scope thereof, every individual, assignee, association, business trust, club, company, corporation, estate trust, firm, joint venture, partnership, co-partnership, receiver, society, trustee in bankruptcy, or any group or combination acting as a unit whether mutual, cooperative, fraternal, nonprofit, or otherwise who is a purchaser or renter of tangible or intangible goods or services.

“Mayor” means chief administrative official of the City or the Mayor’s designee.

“Property” means any tangible personal or real possession.

“Rent” means the conditional use of personal or real property by a consumer for consideration.

“Retail sale” means the transfer of any kind of goods or services to consumers, for consideration, regardless of quantity or price.

“Sale” means the exchange of any real or personal property, or of any goods or services for consideration including barter, installment credit, conditional sales, and rental transactions for any purpose other than resale in the regular course of business.

“Sale for resale (wholesale)” means the act of selling tangible personal or real property to a buyer for reselling.

“Sales price” means the amount of consideration paid by the buyer in terms of monetary value. The exchange or sale price of real estate is based on the current fair market value.

“Sales Tax Administrator” is designated by the Mayor or Administrator.

“Seller” means all work done or duties performed, provided, or furnished for others for compensation whether in conjunction with the sale of goods or not, but does not include services rendered by an employee to an employer.

“Services” means all work done or duties performed, provided or furnished for others for compensation whether in conjunction with the sale of goods or not, but does not include services rendered by an employee to an employer.

“Transaction made within the City” means the buyer takes possession of the purchased, rented, or leased property or service provided within the corporate limits of the City. (Ord. 21-21 § 2, 2021; Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 16-03 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.015 Business licenses required.

All sellers shall secure a City business license as required in NPMC 5.02.020 and a State of Alaska business license.

A. The City business license must be prominently displayed at the place of business of every seller. Any seller who has no regular place of business shall display such license on request.

B. Before issuing a business license to a seller, the City may require the applicant to post a bond, furnish a statement of net worth, or furnish additional security to insure the full and prompt payment of taxes to be collected under this article.

C. The business license of any seller is subject to revocation when such seller fails to pay delinquent taxes, fees and interest within the time frame established in North Pole Municipal Code. It is unlawful for a seller to engage in sales without a current City business license or to engage in sales when such license is revoked.

D. Each seller who obtains or should obtain a City business license in accordance with NPMC 5.02.020 consents to the inspection of their Federal or State business tax returns in order to facilitate the accomplishment of the provisions and objectives of this article. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 16-03 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 14-20 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.020 Imposition of rate.

There is levied a tax equal to five and one-half percent of the selling price upon buyers of all retail sales, and rentals made, and all services performed within the corporate limits of the City, unless specifically exempted in this article or a different tax rate is specifically set forth in this article.

A. There is hereby levied an alcoholic beverage tax on the retail sale of alcoholic beverages equal to six percent times the selling price of all sales made within the City of North Pole.

B. 1. There is hereby levied an excise tax on the distribution of tobacco products brought into the City limits measured at the rate of ten percent times the wholesale price of such tobacco products.

2. It is the intent and purpose of this article to provide for the collection of the excise tax from:

a. A person who brings, or causes to be brought, tobacco products into the City limits from outside the City limits for sale; or

b. A person who ships or transports cigarettes or tobacco products to a retailer in the City limits for sale by a retailer.

c. Retail tobacco sales are subject to the general sales tax rates as outlined in subsection (E) of this section.

C. The maximum tax on any single transaction shall be $16.50 (sixteen dollars fifty cents) except on the retail sale of alcoholic beverages, wholesale tobacco products, and the hotel-motel room tax, all of which shall not have any maximum tax.

D. Vendors shall compute the tax on each sale by multiplying the price by the aggregate rate of taxes for the type of transaction listed in this section. The computation shall be carried out to three decimal places. If the result is a fractional amount of a cent, the calculated tax shall be rounded to a whole cent using a method that rounds up to the next cent whenever the third decimal place is greater than four.

E. Coin-operated machines shall remit five and one-half percent of the gross receipts derived from sales using the following formula:

Receipts divided by 1.055 = Sales

Receipts minus Sales = Sales tax due

(Ord. 22-25, 2022; Ord. 19-23 § 2, 2020; Ord. 17-07 § 2, 2017; Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 16-03 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 10-14 § 2, 2011; Ord. 09-01a § 2, 2009; Ord. 09-01 § 2, 2009; Ord. 06-08, 2006; Ord. 04-14 § 2, 2004; Ord. 00-14 § 2, 2000; Ord. 00-02 § 2, 2000; Ord. 99-29 § 2, 1999)

4.08.030 Obligations of seller.

It is the obligation of the seller making taxable sales to collect all taxes imposed by this article. All taxes shall be due and payable from the buyer to the seller at the time the transaction takes place. The seller shall hold collected taxes in trust for the benefit of the City.

A. If any person, firm, co-partnership, corporation, director or agent collects taxes listed under this section on behalf of the City of North Pole and the transaction is not taxable under this section, they shall refund all improperly paid taxes immediately or remit all unlawfully collected taxes to the City of North Pole immediately. Failure to comply with this section is punishable as a violation. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.040 Taxed transactions.

Taxed transactions include all sales, retail sales, sales for resale, rentals, and services performed within the corporate limits of the City, unless specifically exempted by this article, the laws of Alaska, or by the Constitution of the United States. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.045 Sales of bingo, lotteries and pull-tabs.

Notwithstanding any other provisions in this article, the sales of bingo, lotteries, and pull-tabs and like games of chance by any operator or any permittee are subject to sales tax on the total adjusted gross income as defined by AS 05.15. Each operator and permittee must along with their sales return and remittance file a report on their activity in the City during that filing period including the value of prizes awarded and other information as may be required by the City. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.050 Exemptions.

A. The following classes of sales, rentals, and services are exempt from the tax imposed by this article:

1. Casual and isolated sales not exceeding $1,000 (one thousand dollars) per calendar year and not requiring the seller to hold a current City or State business license;

2. Sales, services, rentals, and transactions which the municipality is prohibited from taxing under the Constitution of the United States or the State of Alaska, including but not limited to:

a. Sales of insurance bonds of guaranty, fidelity, and the commissions thereon,

b. Sales to Federally chartered credit unions,

c. Sales of goods made with food coupons, food stamps, or other type of certificate issued under 7 USC 2011 through 2025 (Food Stamp Act), or made with food coupons, food vouchers, or other type of certificate issued under 42 USC 1786 (Special Supplemental Food Program for Women, Infants, and Children);

3. Sales, rentals, or services provided to the United States, to the State of Alaska, and any public corporation or political subdivision thereof;

4. Sales, rentals, or services provided to any volunteer ambulance, fire, or law enforcement organization providing service to the public and to public international organizations designated by the President of the United States;

5. Sales of professional medical services performed by a person, clinic, or hospital licensed and certified under the State of Alaska:

a. The preparation of controlled substances prescribed and supplied by a State licensed and certified medical professional,

b. Counseling services provided by State licensed and certified psychologists or psychological associates, clinical social workers, alcohol and drug counselors, or marital and family therapists,

c. Assisted living services provided in accordance with State regulations, and licensed by such,

d. Sales and rentals of hearing aids, crutches, wheelchairs, and other personal property specifically manufactured for a patient;

6. Sales of newspapers or other periodicals by carrier made directly to consumers where the carrier is responsible for the collection of sales revenue;

7. Membership dues, fees, or assessments paid to clubs, labor unions, fraternal organizations, and other nonprofit organizations that have obtained Exemption Certificate 501(c) from the Internal Revenue Service;

8. Sales, services, and rentals to a buyer, or made by a seller, for functions organized and administered solely by an organization holding a current 501(c)(3) or 501(c)(4) exemption ruling or equivalent from the Internal Revenue Service which has a physical or mailing address within City limits and a resolution or letter from the board, naming up to a maximum of six individuals, authorized to make purchases on behalf of the organization. This exemption does not apply to the sale of pull-tab games;

9. Sales of school admission tickets, goods, services, and rentals for school entertainment, athletic activities, and all other activities conducted by school-sanctioned groups;

10. Sales of food and beverages in public or private school and college cafeterias or lunchrooms which are not operated for profit;

11. Rentals of real property where the term of tenancy is monthly or longer;

12. Sales, rentals, or leases/purchase agreements of automobiles by a dealer made outside City limits;

13. Sales for resale (wholesale) of tangible personal or real property, other than tobacco, to a buyer for reselling;

14. The commission earned on real estate sales;

15. Air, train, bus and boat fares, lodging, adventure and similar and related services and the commission earned by licensed agents in the sale thereof;

16. Sales of food and merchandise in the farmer’s market. City business licenses are required by vendors;

17. Sales of services to include but not limited to architectural, carpentry, electrical, engineering, financial, general contractor, landscaping, legal, plumbing, snow removal, etc. City business licenses are required; the sale of goods and products associated with the service is not exempt unless previously described in this article. (Ord. 21-21 § 2, 2021; Ord. 20-24, 2020; Ord. 20-22 § 2, 2020; Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 08-16, 2008; Ord. 03-01 § 2, 2003; Ord. 99-29 § 2, 1999)

4.08.055 Senior/disabled sales tax refund.

Repealed by Ord. 14-24. (Ord. 04-15 § 2, 2004; Ord. 00-10 § 2, 2000; Ord. 99-29 § 2, 1999)

4.08.060 Promulgation of forms.

When necessary or appropriate and upon approval by the Mayor, the Sales Tax Administrator shall revise or implement the use of forms for the purpose of efficiency within administration. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.070 Confidentiality of sales tax returns.

Except as otherwise provided in this article, all documentation required to be filed shall be kept confidential and is not subject to public inspection. Persons supplying the information may be granted access to their records if requested in writing and approved by the Sales Tax Administrator.

A. The following information may be made available to the public: the name and business address of current business license holders;

B. The Sales Tax Administrator will provide monthly to the City Council the names of sellers delinquent in remitting sales taxes and the amount thereof. Information may also be made available to the public in the form of statistical reports if the identity of particular sellers is not revealed or made evident by the reports. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.080 Recordkeeping.

It shall be the duty of every seller engaged in business in the City to keep and preserve, for six years, suitable records of all sales, services, and rentals transacted by liability hereunder.

A. For the purpose of ascertaining the correctness of a return, or for the purpose of determining the amount of tax collected or which should have been collected by any person, the Mayor or his designee may conduct random audits by examining any relevant documentation including correspondence, invoices, and receipts; hold investigations and hearings concerning any matter covered by this article; and may require the attendance of such person, officer, or employee of such person.

B. The Mayor and the Mayor’s duly authorized agent shall have the power to administer oaths to such persons. The Mayor, with the approval of the City Council, shall issue all formal subpoenas to compel attendance or to require production of relevant books, papers, records or memoranda.

C. Any competent person may serve all subpoenas or other court orders issued under the terms of this article. Witness fees for attendance and trial shall be the same as the fees of witnesses before the Superior Court; such fees shall be paid when the witness is excused from further attendance. When a witness is subpoenaed at the instance of any party to any such proceedings, the Mayor may require the cost of service of the subpoena and the fee of the witness be borne by the party at whose instance the witness is summoned. In such case, the Mayor at his discretion may require a deposit to cover the cost of such service and witness fee. A subpoena issued as aforesaid shall be served in the same manner as a subpoena issued out of a court of record.

D. The Superior Court, upon application of the Mayor, is empowered to compel obedience to such subpoena; the attendance of witnesses; the production of relevant books, papers, records or memoranda; and the giving of testimony before the Mayor, or any of the Mayor’s duly authorized agents, in the manner and extent as witnesses may be compelled to obey the subpoenas and orders of the court.

E. The Mayor, or any party in an investigation or hearing before the Mayor, may cause the deposition of witnesses residing within or without the State to be taken in the manner prescribed by law for like depositions in civil actions in courts of this State. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 16-08 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.090 Submittal of forms and remittance.

The City shall provide sales tax return forms for sellers. Sellers making a taxable sale in any month shall transmit the tax collected no later than the last day of the following month in which tax was collected along with a completed return. Returns and taxes remitted must be received by the City administrative offices no later than 5:00 p.m. on the due date.

A. The sales tax forms furnished by the City shall have spaces setting forth the amount received from the following:

1. All sales, services, or rentals made within City limits;

2. The amount received from nontaxable sales, services, and rentals;

3. The amount of credit card service fees paid on credit card sales within the City;

4. The amount of taxable sales, services, and rentals;

5. The amount of sales tax owed;

6. The amount of penalties owed;

7. The total amount of sales tax and penalties owed to the City;

8. Such other information and supporting documentation as may be required.

B. Quarterly Filing.

2. The Sales Tax Administrator shall evaluate the seller’s compliance with this article, and make a recommendation to the City Council to approve or deny the seller’s petition.

3. If the City Council approves the petition, the seller shall file returns and transmit the taxes imposed by this article no later than the last day of the month following the quarter the taxes were collected.

4. Upon approval of the Council, quarterly filing will revert to monthly filing if reports are not transmitted on time.

C. Annual Filing.

1. A seller who, for one year, has transmitted taxes and filed returns as required by this article may file with the Sales Tax Administrator a written request to transmit taxes and file returns annually so long as the annual amount of tax collected is estimated to be less than $500 (five hundred dollars).

2. The Sales Tax Administrator shall evaluate the seller’s compliance with this article, and make a recommendation to the City Council to approve or deny the seller’s petition.

3. If the City Council approves the petition, the seller shall file returns and transmit the taxes imposed by this article no later than the last day of the month following the year the taxes were collected.

4. Upon approval of the Council, annual filing will revert to monthly filing if reports are not transmitted on time. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 03-01 § 2, 2003; Ord. 99-29 § 2, 1999)

4.08.100 Delinquency, fees, interest and application of payment.

Taxes due but not paid will be considered delinquent and will be subject to all fees, interest, and penalties under this article, and may be recovered by the City with an action at law against the buyer and/or seller. The sales tax return shall be prima facie proof of taxes collected but not transmitted.

A. Application of Fees and Interest.

1. Complete sales tax returns and full remittance delinquent less than thirty days shall be charged a late fee of $25 (twenty-five dollars) or up to the maximum interest rate allowed by law, whichever is greater, in addition to the total amount due. Sellers filing incomplete sales tax returns will incur an additional fee of $15 (fifteen dollars).

2. Complete sales tax returns and full remittance thirty to sixty days past due will incur a late fee of $50 (fifty dollars) or up to the maximum interest rate allowed by law, whichever is greater, in addition to the total amount due. Sellers filing incomplete sales tax returns will incur an additional fee of $15 (fifteen dollars).

3. Sales tax returns and full remittance sixty-one days past due will incur a reoccurring monthly fee of $50 (fifty dollars) in addition to all previous fees and interest. Sellers failing to file complete returns and full remittance will be subject to a lien against the seller’s property.

B. Application of Interest. Interest at the rate of ten and one-half percent per year, and applied monthly, shall accrue on all delinquent taxes and fees starting from the due date until paid in full.

C. Application of Payments. All tax-related payments made to the City shall first apply to the payment of fees and interest, then to the payment of the principal of the tax which is delinquent, and then to the payment of current taxes. All other payments received over the amount owed for taxes, fees, and interest will then apply to any other fees incurred by the seller.

D. Business licenses will be automatically revoked, and businesses will be served with a cease and desist order by a law enforcement officer empowered by the City of North Pole when sales tax returns are ninety days delinquent.

E. Businesses that have habitually late sales tax returns, defined as sales tax returns that are sixty days delinquent three times in a calendar year, will have their business license revoked and will be served with a cease and desist order by a law enforcement officer empowered by the City of North Pole.

F. The business owner shall have two business days from the date of service of the cease and desist order/revocation of the business owner’s license to file an appeal. This request for an administrative hearing shall set forth all grounds relied upon by the business owner to contest the cease and desist order/revocation order. Any grounds not set forth in the request for hearing shall be considered waived.

G. The administrative hearing shall take place before the City Council as soon as is practicable.

1. The City Council shall rule upon the hearing request in writing at the conclusion of the hearing.

2. The business owner shall have ten days from the written notice of the City Council’s decision in which to appeal any adverse decision to the Superior Court. The filing of such an appeal shall not stay the business license revocation.

3. All cease and desist orders shall notify the business owner of the hearing rights and procedures set forth herein. (Ord. 17-02 § 2, 2017; Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 03-01 § 2, 2003; Ord. 01-10 § 2, 2001; Ord. 99-29 § 2, 1999)

4.08.105 Estimated taxes.

The City reserves the right to estimate sales tax due when unable to ascertain the tax by a seller for any reason. The City may make an estimate of the tax due based on any evidence in its possession. Notice of the estimated taxes due shall be furnished to the seller and shall become final for the purpose of determining liability of the seller to the City in thirty days, unless the seller files an accurate and complete return. (Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.110 Exemptions, exceptions and refunds.

Every sale, service, or rental made within the City, unless explicitly exempted by this article or a subsequent ordinance, shall be presumed to be subject to the tax imposed hereunder in any action to enforce the provisions of this article. It is the policy of the City that taxes, and interest, shall be promptly collected without offset, compromise or time extensions for payment. Any exceptions to this policy shall be in the sole discretion of the City Council, applying the criteria set forth in subsection (E) of this section.

A. A buyer or seller who claims a sale is exempt from taxation shall pay the tax as required by this article. Within thirty days of the sale the buyer or seller may file a claim in writing, including documentation substantiating the claim, with the Sales Tax Administrator briefly describing the basis of the claim and the relief sought.

B. No sales tax refund request may be made/refunded unless the sales tax was paid under protest and stating the good faith reason(s) therefor.

C. A seller may within sixty days of filing a completed sales tax return submit an amended return, and request in writing a refund or credit to their account.

D. The Sales Tax Administrator shall investigate claims and shall present the claims, findings, and recommendations to the City Council for action at the next regular Council meeting. If the City Council determines there is clear and convincing evidence to establish a refund or credit of taxes paid, the Mayor or his designee shall ensure the refund or credit is issued no later than thirty days after determination has been made. The City shall not be held liable for any payment of interest on the tax payment from the date paid until a refund is made or credit applied.

E. The City Council may reduce interest and fees due on delinquent sales taxes as follows:

1. Request for the reduction of interest or penalties assessed under the City’s sales tax must be submitted to the City Clerk in writing and shall include all of the facts and documents that the tax payer alleges support a reduction in the assessment of interest and fees, the amount of reductions so requested and payment in full of all delinquent sales taxes, excluding interest and fees. The request shall be signed by the taxpayer under oath and notarized.

2. The City Council shall, in its sole discretion, determine the amount of any reduction in interest and fees assessed based on the nature of the error that lead to the delinquent payment of the taxes due, whether the tax payer’s late payment of taxes was due to good faith mistake and whether the tax payer self-reported the delinquent taxes due.

3. Ignorance of a taxpayer’s tax obligations under the City sales tax shall not constitute grounds for the reduction of interest and fees unless the taxpayer proves that the taxpayer made a good faith effort to determine its obligations under the sales tax code.

4. The City Council may grant a reduction in interest and fees due under the sales tax code if the taxpayer establishes, by clear and convincing evidence, that the application of the factors set forth in this section of code justify the reduction. (Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 11-07 § 2, 2011; Ord. 10-13 § 2, 2011; Ord. 99-29 § 2, 1999)

4.08.120 Lien for tax, interest and fees.

Delinquent taxes, administrative fees, and interest imposed by this article shall constitute a primary lien in favor of the City upon the seller’s property.

A. The lien may be levied at time of delinquency and continues until the liability for all delinquent amounts is satisfied. Such lien shall be reviewed periodically and may be adjusted to reflect actual outstanding balances.

B. Sales tax liens on property shall be enforced by foreclosure conducted as provided by law for enforcement of judgment liens.

C. Accounts may be assigned to a collection agency. (Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 08-06 § 2, 2008; Ord. 99-29 § 2, 1999)

4.08.130 Criminal liability.

Any person, firm, co-partnership, corporation, or director or agent of the aforementioned violating any of the provisions of this article or failing or refusing to comply with a lawful request or demand of the Mayor or Sales Tax Administrator authorized under this article is punishable as a violation. (Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.140 Sale of business, final tax returns, liability of purchaser.

A. If any seller sells, assigns, transfers, conveys, leases, forfeits, or abandons their business to another person, the seller shall surrender their business license to the City for cancellation.

B. The seller shall make a final sales tax return with payment in full no later than ten days after relinquishment of the business showing that all obligations imposed by this article have been paid.

C. The purchaser, assignee, transferee, lessee, successor, creditor, or secured party is required to file a new application for a new City business license, and shall provide proof of a State of Alaska business license.

D. The purchaser, assignee, transferee, lessee, successor, creditor, or secured party shall withhold from the purchase money the sales tax, interest, and fees owed by the seller.

The purchaser, assignee, transferee, lessee, successor, creditor, or secured party shall be held personally liable for the payment of the taxes, interest, and fees accruing on the unpaid balance by the former owners, operators, or assigns. (Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014; Ord. 99-29 § 2, 1999)

4.08.150 No cause of action against the City.

The provisions of this article are enacted for the sole purpose of providing guidance to the City of North Pole administration for uniform collection procedures. Any failure on the part of the City of North Pole to follow the provisions of this article shall not:

A. Waive any rights of the City of North Pole;

B. Give rise to any cause of action on behalf of the seller or taxpayer against the City of North Pole. (Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014)

4.08.160 Severability.

If any section, subsection, paragraph, sentence, clause, or phrase of this article is held to be unconstitutional or in violation of law, then that holding shall not affect the validity of the remainder of this article. (Ord. 16-26 § 2, 2016; Ord. 14-26 § 2, 2014)

Article II. Uniform Alaska Remote Seller Sales Tax

4.08.210 Interpretation.

A. In order to prevent evasion of the sales taxes and to aid in its administration, it is presumed that all sales and services by a person or entity engaging in business are subject to the sales tax.

B. The application of the tax levied under this article shall be broadly construed and shall favor inclusion rather than exclusion.

C. Exemptions from the tax levied under this article or from the taxing jurisdiction shall be narrowly construed against the claimant and allowed only when such exemption clearly falls within an exemption defined in this article or the taxing jurisdiction’s code.

D. The scope of this article shall apply to remote sellers or marketplace facilitators, delivering products or services to member municipalities adopting this article, within the State of Alaska. (Ord. 21-02 § 1, 2021)

4.08.220 Title to collected sales tax.

Upon collection by the remote seller or marketplace facilitator, title to collected sales tax vests in the Commission for remittance to the taxing jurisdiction. The remote seller or marketplace facilitator remits collected sales tax to the Commission on behalf of the taxing jurisdiction, from whom that power is delegated, in trust for the taxing jurisdiction and is accountable to the Commission and taxing jurisdiction. (Ord. 21-02 § 1, 2021)

4.08.230 Imposition – Rate.

A. To the fullest extent permitted by law, a sales tax is levied and assessed on all remote sales where delivery is made within the local taxing jurisdiction(s) that is a member, within the State of Alaska.

B. The applicable tax shall be added to the sales price.

C. The tax rate added to the sale price shall be the tax rate for the taxing jurisdiction(s) where the property or product is sold or service that was rendered is received, and based on the date the property or product was sold or the date the service rendered was received.

D. An address and tax rate database will be made available to remote sellers and marketplace facilitators, indicating the appropriate tax rate to be applied.

E. The tax assessed shall be consistent with relevant jurisdictional tax caps, single unit sales, and exemptions.

F. When a sale is made on an installment basis, the applicable sales tax shall be collected at each payment, calculated at the sales tax rate in effect, and with the cap applied, at the time of the original sale or the date the service is rendered, based on the local jurisdictions’ code(s).

G. When a sales transaction involves placement of a single order with multiple deliveries made at different points in time that are separately invoiced, the applicable sales tax shall be collected on each separately invoiced delivery, calculated at the sales tax rate in effect, and with the cap applied, at the time of the original sale or the date the service is rendered. (Ord. 21-02 § 1, 2021)

4.08.240 Obligation to collect tax – Threshold criteria.

A. Any remote seller or marketplace facilitator must collect and remit sales tax in compliance with all applicable procedures and requirements of law, provided the remote seller or marketplace facilitator has met one of the following threshold criteria (“threshold criteria”) in the previous calendar year:

1. The remote seller’s statewide gross sales, including the seller’s marketplace facilitator’s statewide gross sales, from the sale(s) of property, products or services delivered into the state meets or exceeds one hundred thousand dollars ($100,000); or

2. The remote seller, including the seller’s marketplace facilitator, sold property, products, or services delivered into the state in two hundred or more separate transactions.

B. For purposes of determining whether the threshold criteria are met, remote sellers or marketplace facilitators shall include all gross sales, from all sales of goods, property, products, or services rendered within the State of Alaska. (Ord. 21-02 § 1, 2021)

4.08.250 No retroactive application.

The obligations to collect and remit sales tax required by this article are applicable at the effective date of the ordinance adopting the Alaska Remote Seller Sales Tax Code. (Ord. 21-02 § 1, 2021)

4.08.260 Payment and collection.

Pursuant to this article, taxes imposed shall be due and paid by the buyer to the remote seller or marketplace facilitator at the time of the sale of property or product or date service is rendered, or with respect to credit transactions, at the time of collection. It shall be the duty of each remote seller or marketplace facilitator to collect the taxes from the buyer and to hold those taxes in trust for the taxing authority of the taxing jurisdiction. Failure by the remote seller or marketplace facilitator to collect the tax shall not affect the remote seller’s, or marketplace facilitator’s, responsibility for payment to the Commission. (Ord. 21-02 § 1, 2021)

4.08.270 Remote seller and marketplace facilitator registration requirement.

A. If a remote seller’s gross statewide sales within the last calendar year meet or exceed the threshold criteria, the remote seller shall register with the Commission. If a marketplace facilitator’s gross statewide sales within the last calendar year meet or exceed the threshold criteria, the marketplace facilitator shall register with the Commission.

B. A remote seller or marketplace facilitator meeting the threshold criteria shall apply for a certificate of sales tax registration within thirty calendar days of the effective date of the ordinance codified in this article or within thirty calendar days of meeting the threshold criteria, whichever occurs second. Registration shall be to the Commission on forms prescribed by the Commission.

C. An extension may be applied for and granted based on criteria established by the Commission, based on evidence produced to describe time necessary to update software or other technical needs, not to exceed ninety days.

D. Upon receipt of a properly executed application, the Commission shall confirm registration, stating the legal name of the remote seller or marketplace facilitator, the primary address, and the primary sales tax contact name and corresponding title. The failure of the Commission to confirm registration does not relieve the remote seller or marketplace facilitator of its duty to collect and remit sales tax.

E. Each business entity shall have a sales tax registration under the advertised name.

F. The sales tax certificate is nonassignable and nontransferable. (Ord. 21-02 § 1, 2021)

4.08.280 Tax filing schedule.

A. All remote sellers or marketplace facilitators subject to this article shall file a return on a form or in a format prescribed by the Commission and shall pay the tax due.

B. Filing of sales tax returns are due monthly; quarterly filing is optional upon application and approval by the Commission, consistent with the code of the local jurisdiction.

C. A remote seller or marketplace facilitator who has filed a sales tax return will be presumed to be making sales in successive periods unless the remote seller or marketplace facilitator files a return showing a termination or sale of the business in accordance with this article.

D. The completed and executed return, together with the remittance in full for the tax due, shall be transmitted to and must be received by the Commission on or before midnight Alaska Standard Time on the due date. Monthly returns are due the last day of the immediate subsequent month. Quarterly returns are due as follows:

Quarter 1 (January – March)	April 30th
Quarter 2 (April – June)	July 31st
Quarter 3 (July – September)	October 31st
Quarter 4 (October – December)	January 31st

E. If the last day of the month following the end of the filing period falls on a Saturday, Sunday, Federal holiday, or Alaska State holiday, the due date will be extended until the next business day immediately following.

F. Any remote seller or marketplace facilitator holding a remote seller registration shall file a sales tax return even though no tax may be due. This return shall show why no tax is due. If the remote seller or marketplace facilitator intends to continue doing business a return shall be filed reflecting no sales and a confirmation of the intent to continue doing business and shall continue to do so each filing period until the entity ceases doing business or sells the business. If the remote seller or marketplace facilitator intends to cease doing business, a final return shall be filed along with a statement of business closure.

G. The remote seller or marketplace facilitator shall prepare the return and remit sales tax to the Commission on the same basis, cash or accrual, which the remote seller or marketplace facilitator uses in preparing its Federal income tax return. The remote seller or marketplace facilitator shall sign the return, and transmit the return, with the amount of sales tax and any applicable penalty, interest, or fees that it shows to be due, to the Commission.

H. Remote sellers and marketplace facilitators failing to comply with the provisions of this article shall, if required by the Commission and if quarterly filing has been chosen, file and transmit collected sales taxes more frequently until such time as they have demonstrated to the Commission that they are or will be able to comply with the provisions of this article. Six consecutive on-time sales tax filings, with full remittance of the sales taxes collected, shall establish the presumption of compliance and return to quarterly filing.

I. The preparer of the sales tax return shall keep and maintain all documentation supporting any and all claims of exempted sales and purchases. Documentation for exempted sales should include the number of the exemption authorization card presented by the buyer at the time of the purchase, the date of the purchase, the name of the person making the purchase, the organization making the purchase, the total amount of the purchase, and the amount of sales tax exempted. This documentation shall be made available to the Commission upon request. Failure to provide such documentation may invalidate that portion of the claim of exemption for which no documentation is provided. (Ord. 21-02 § 1, 2021)

4.08.290 Estimated tax.

A. In the event the Commission is unable to ascertain the tax due from a remote seller or marketplace facilitator by reason of the failure of the remote seller or marketplace facilitator to keep accurate books, allow inspection, or file a return, or by reason of the remote seller or marketplace facilitator filing a false or inaccurate return, the Commission may make an estimate of the tax due based on any evidence in their possession.

B. Sales taxes may also be estimated, based on any information available, whenever the Commission has reasonable cause to believe that any information on a sales tax return is not accurate.

C. A remote seller’s or marketplace facilitator’s tax liability under this article may be determined and assessed for a period of six years after the date the return was filed or due to be filed with the Commission. No civil action for the collection of such tax may be commenced after the expiration of the six-year period except an action for taxes, penalties, and interest due from those filing periods that are the subject of a written demand or assessment made within the six-year period, unless the remote seller or marketplace facilitator waives the protection of this section.

D. The Commission shall notify the remote seller or marketplace facilitator, in writing, that the Commission has estimated the amount of sales tax that is due from the remote seller or marketplace facilitator. The Commission shall serve the notice on the remote seller or marketplace facilitator by delivering the notice to the remote seller’s or marketplace facilitator’s place of business, or by mailing the notice by certified mail, return receipt requested, to the remote seller’s or marketplace facilitator’s last known mailing address. A remote seller or marketplace facilitator who refuses the certified mail will be considered to have accepted the certified mail for purposes of service.

E. The Commission’s estimate of the amount of sales tax that is due from a remote seller or marketplace facilitator shall become a final determination of the amount that is due unless the remote seller or marketplace facilitator, within thirty calendar days after service of notice of the estimated tax:

1. Files a complete and accurate sales tax return for the delinquent periods supported by satisfactory records and accompanied by a full remittance of all taxes, interest, penalties, costs, and other charges due; or

2. Files a written notice with the Commission appealing the estimated tax amount in accordance with the appeal procedures.

3. Arguments or reasons for failure to timely file a return and remit taxes collected shall not be considered a valid basis or grounds for granting an appeal. The basis and grounds for granting an appeal of an assessment are:

a. The identity of the remote seller or marketplace facilitator is in error;

b. The amount of the debt is erroneous due to a clerical error (and the nature and extent of the error is specified in the request for appeal); or

c. The remote seller or marketplace facilitator disputes the denial of exemption(s) for certain sales.

F. The amount of sales tax finally determined to be due under this section shall bear interest and penalty from the date that the sales tax originally was due, plus an additional civil penalty of $50 (fifty dollars) for each calendar month or partial month for which the amount of sales tax that is due has been determined. (Ord. 21-02 § 1, 2021)

4.08.300 Returns – Filing contents.

A. Every remote seller or marketplace facilitator required by this article to collect sales tax shall file with the Commission upon forms furnished by the Commission a return setting forth the following information with totals rounded to the nearest dollar:

1. Gross sales;

2. The nontaxable portions separately stating the amount of sales revenue attributable to each class of exemption;

3. Computation of taxes to be remitted;

4. Calculated discount (if applicable) based on taxing jurisdiction’s code; and

5. Such other information as may be required by the Commission.

B. Each tax return remitted by a remote seller or marketplace facilitator shall be signed (digital or otherwise) by a responsible individual who shall attest to the completeness and accuracy of the information on the tax return.

C. The Commission reserves the right to reject a filed return for failure to comply with the requirements of this Code for up to three months from the date of filing. The Commission shall give written notice to a remote seller or marketplace facilitator that a return has been rejected, including the reason for the rejection. (Ord. 21-02 § 1, 2021)

4.08.310 Refunds.

A. Upon request from a buyer or remote seller or marketplace facilitator, the Commission shall provide a determination of correct tax rate and amount applicable to the transaction. In the case of an overpayment of taxes, the remote seller or marketplace facilitator shall process the refund and amend any returns accordingly.

B. If the claimant is a remote seller or marketplace facilitator, and the tax refund is owed to any buyer, the remote seller or marketplace facilitator submits, and the Commission approves, a refund plan to all affected buyers.

C. The taxing jurisdictions may allow a buyer to request a refund directly from the taxing jurisdiction. (Ord. 21-02 § 1, 2021)

4.08.320 Amended returns.

A. A remote seller or marketplace facilitator may file an amended sales tax return, with supporting documentation, and the Commission may accept the amended return, but only in the following circumstances:

1. The amended return is filed within one year of the original due date for the return; and

2. The remote seller or marketplace facilitator provides a written justification for requesting approval of the amended return; and

3. The remote seller or marketplace facilitator agrees to submit to an audit upon request of the Commission.

B. The Commission shall notify the remote seller or marketplace facilitator in writing (by email or otherwise) whether the Commission accepts or rejects an amended return, including the reasons for any rejection.

C. The Commission may adjust a return for a remote seller or marketplace facilitator if, after investigation, the Commission determines the figures included in the original returns are incorrect; and the Commission adjusts the return within two years of the original due date for the return.

D. A remote seller or marketplace facilitator may file a supplemental sales tax return, with supporting documentation, and the Commission may accept the supplemental return, but only in the following circumstances:

1. The remote seller or marketplace facilitator provides a written justification for requesting approval of the supplemental return; and

2. The remote seller or marketplace facilitator agrees to submit to an audit upon request of the Commission. (Ord. 21-02 § 1, 2021)

4.08.330 Extension of time to file tax return.

Upon written application of a remote seller or marketplace facilitator, stating the reasons therefor, the Commission may extend the time to file a sales tax return but only if the Commission finds each of the following:

A. For reasons beyond the remote seller’s or marketplace facilitator’s control, the remote seller or marketplace facilitator has been unable to maintain in a current condition the books and records that contain the information required to complete the return;

B. Such extension is a dire necessity for bookkeeping reasons and would avert undue hardship upon the remote seller or marketplace facilitator;

C. The remote seller or marketplace facilitator has a plan to cure the problem that caused the remote seller or marketplace facilitator to apply for an extension and the remote seller or marketplace facilitator agrees to proceed with diligence to cure the problem;

D. At the time of the application, the remote seller or marketplace facilitator is not delinquent in filing any other sales tax return, in remitting sales tax to the Commission or otherwise in violation of this article;

E. No such extension shall be made retroactively to cover existing delinquencies. (Ord. 21-02 § 1, 2021)

4.08.340 Audits.

A. Any remote seller or marketplace facilitator who has registered with the Commission, who is required to collect and remit sales tax, or who is required to submit a sales tax return is subject to a discretionary sales tax audit at any time. The purpose of such an audit is to examine the business records of the remote seller or marketplace facilitator in order to determine whether appropriate amounts of sales tax revenue have been collected by the remote seller or marketplace facilitator and remitted to the Commission.

B. The Commission is not bound to accept a sales tax return as correct. The Commission may make an independent investigation of all retail sales or transactions conducted within the State or taxing jurisdiction.

C. The records that a remote seller or marketplace facilitator is required to maintain under this article shall be subject to inspection and copying by authorized employees or agents of the Commission for the purpose of auditing any return filed under this article, or to determine the remote seller’s or marketplace facilitator’s liability for sales tax where no return has been filed.

D. In addition to the information required on returns, the Commission may request, and the remote seller or marketplace facilitator must furnish, any reasonable information deemed necessary for a correct computation of the tax.

E. The Commission may adjust a return for a remote seller or marketplace facilitator if, after investigation or audit, the Commission determines that the figures included in the original return are incorrect, and that additional sales taxes are due; and the Commission adjusts the return within two years of the original due date for the return.

F. For the purpose of ascertaining the correctness of a return or the amount of taxes owed when a return has not been filed, the Commission may conduct investigations, hearings, and audits, and may examine any relevant books, papers, statements, memoranda, records, accounts, or other writings of any remote seller or marketplace facilitator at any reasonable hour on the premises of the remote seller or marketplace facilitator, and may require the attendance of any officer or employee of the remote seller or marketplace facilitator. Upon written demand by the Commission, the remote seller or marketplace facilitator shall present for examination, in the office of the Commission, such books, papers, statements, memoranda, records, accounts, and other written material as may be set out in the demand unless the Commission and the person upon whom the demand is made agree to presentation of such materials at a different place.

G. The Commission may issue subpoenas to compel attendance or to require production of relevant books, papers, records, or memoranda. If any remote seller or marketplace facilitator refuses to obey any such subpoena, the Commissioner may refer the matter to the Commission’s attorney for an application to the superior court for an order requiring the remote seller or marketplace facilitator to comply therewith.

H. Any remote seller, marketplace facilitator, or person engaged in business who is unable or unwilling to submit their records to the Commission shall be required to pay the Commission for all necessary expenses incurred for the examination and inspection of their records maintained outside the Commission.

I. After the completion of a sales tax audit, the results of the audit will be sent to the business owner’s address of record.

J. In the event the Commission, upon completion of an audit, discovers more than $500 (five hundred dollars) in additional sales tax due from a remote seller or marketplace facilitator resulting from a remote seller’s or marketplace facilitator’s failure to accurately report sales and taxes due thereupon, the remote seller or marketplace facilitator shall bear responsibility for the full cost of the audit. The audit fee assessment will be in addition to interest and penalties applicable to amounts deemed to be delinquent by the Commission at the time of the conclusion of the audit. (Ord. 21-02 § 1, 2021)

4.08.350 Audit protest.

A. If the remote seller or marketplace facilitator wishes to dispute the amount of the estimate, or the results of an examination or audit, the remote seller or marketplace facilitator must file a written protest with the Commission, within thirty calendar days of the date of the notice of estimated tax or results of an audit or examination. The protest must set forth:

1. The remote seller’s or marketplace facilitator’s justification for reducing or increasing the estimated tax amount, including any missing sales tax returns for the periods estimated; or

2. The remote seller’s or marketplace facilitator’s reasons for challenging the examination or audit results.

B. In processing the protest, the Commission may hold an informal meeting or hearing with the remote seller or marketplace facilitator, either on its own or upon request of the remote seller or marketplace facilitator, and may also require that the remote seller or marketplace facilitator submit to an audit, if one was not previously conducted or a more formal audit, if an estimation audit was previously performed.

C. The Commission shall make a final written determination on the remote seller’s or marketplace facilitator’s protest and mail a copy of the determination to the remote seller or marketplace facilitator.

D. If a written protest is not filed within thirty days of the date of the notice of estimated tax or the result of a review, audit, or examination, then the estimated tax, review, audit, or examination result shall be final, due and payable to the Commission. (Ord. 21-02 § 1, 2021)

4.08.360 Penalties and interest for late filing.

A. A late filing fee of $25 (twenty-five dollars) per month (or quarter) shall be added to all late-filed sales tax reports in addition to interest and penalties.

B. Delinquent sales tax bear interest at the rate of fifteen percent per annum until paid.

C. In addition, delinquent sales tax shall be subject to an additional penalty of five percent per month, or fraction thereof, until a total of twenty percent of delinquent tax has been reached. The penalty does not bear interest.

D. Penalties and interest shall be assessed and collected in the same manner as the tax is assessed and collected, and applied first to penalties and interest, second to past due sales tax.

E. The filing of an incomplete return, or the failure to remit all tax, shall be treated as the filing of no return.

F. A penalty assessed under this section for the delinquent remittance of sales tax or failure to file a sales tax return may be waived by the Commission, upon written application of the remote seller or marketplace facilitator accompanied by a payment of all delinquent sales tax, interest, and penalty otherwise owed by the remote seller or marketplace facilitator, within forty-five calendar days after the date of delinquency. A remote seller or marketplace facilitator may not be granted more than one waiver of penalty under this subsection in any one calendar year. The Commission shall report such waivers of penalty to the taxing jurisdiction, in writing. (Ord. 21-02 § 1, 2021)

4.08.370 Repayment plans.

A. The Commission may agree to enter into a repayment plan with a delinquent remote seller or marketplace facilitator. No repayment plan shall be valid unless agreed to by both parties in writing.

B. A remote seller or marketplace facilitator shall not be eligible to enter into a repayment plan with the Commission if the remote seller or marketplace facilitator has defaulted on a repayment plan in the previous two calendar years.

C. The repayment plan shall include a secured promissory note that substantially complies with the following terms:

1. The remote seller or marketplace facilitator agrees to pay a minimum of ten percent down payment on the tax, interest, and penalty amount due. The down payment shall be applied first to penalty, then to accumulated interest, and then to the tax owed.

2. The remote seller or marketplace facilitator agrees to pay the balance of the tax, penalty and interest owed in monthly installments over a period not to exceed two years.

3. Interest at a rate of fifteen percent per annum shall accrue on the principal sum due. Interest shall not apply to penalties owed or to interest accrued at the time the repayment plan is executed or accruing during the term of the repayment plan.

4. If the remote seller or marketplace facilitator is a corporation or a limited liability entity the remote seller or marketplace facilitator agrees to provide a personal guarantee of the obligations under the repayment plan.

5. The remote seller or marketplace facilitator agrees to pay all future tax bills in accordance with the provisions of this article.

6. The remote seller or marketplace facilitator agrees to provide a security interest in the form of a sales tax lien for the entire unpaid balance of the promissory note to be recorded by the Commission at the time the repayment plan is signed. The remote seller or marketplace facilitator shall be responsible for the cost of recording the tax lien.

D. If a remote seller or marketplace facilitator fails to pay two or more payments as required by the repayment plan agreement, the remote seller or marketplace facilitator shall be in default and the entire amount owed at the time of default shall become immediately due. The Commission will send the remote seller or marketplace facilitator a notice of default. The Commission may immediately foreclose on the sales tax lien or take any other remedy available under the law. (Ord. 21-02 § 1, 2021)

4.08.380 Remote seller or marketplace facilitator record retention.

Remote sellers or marketplace facilitators shall keep and preserve suitable records of all sales made and such other books or accounts as may be necessary to determine the amount of tax that the remote seller or marketplace facilitator is obliged to collect. Remote sellers or marketplace facilitators shall preserve suitable records of sales for a period of six years from the date of the return reporting such sales, and shall preserve for a period of six years all invoices of goods and merchandise purchased for resale, and all such other books, invoices, and records as may be necessary to accurately determine the amount of taxes which the remote seller or marketplace facilitator was obliged to collect under this article. (Ord. 21-02 § 1, 2021)

4.08.390 Cessation or transfer of business.

A. A remote seller or marketplace facilitator who sells, leases, conveys, forfeits, transfers, or assigns the majority of their business interest, including a creditor or secured party, shall make a final sales tax return within thirty days after the date of such conveyance.

B. At least ten business days before any such sale is completed, the remote seller or marketplace facilitator shall send to the Commission, by approved communication (email confirmation, certified first-class mail, postage prepaid) a notice that the remote seller’s or marketplace facilitator’s interest is to be conveyed and shall include the name, address, and telephone number of the person or entity to whom the interest is to be conveyed.

C. Upon notice of sale and disclosure of buyer, the Commission shall be authorized to disclose the status of the remote seller’s or marketplace facilitator’s sales tax account to the named buyer or assignee.

D. Upon receipt of notice of a sale or transfer, the Commission shall send the transferee a copy of the Alaska Remote Seller Sales Tax Code with this section highlighted.

E. Neither the Commission’s failure to give the notice nor the transferee’s failure to receive the notice shall relieve the transferee of any obligations under this section.

F. Following receipt of the notice, the Commission shall have sixty days in which to perform a final sales tax audit and assess sales tax liability against the seller of the business. If the notice is not mailed at least ten business days before the sale is completed, the Commission shall have twelve months from the date of the completion of the sale or the Commission’s knowledge of the completion of the sale within which to begin a final sales tax audit and assess sales tax liability against the seller of the business. The Commission may also initiate an estimated assessment if the requirements for such an assessment exist.

G. A person acquiring any interest of a remote seller or marketplace facilitator in a business required to collect the tax under this article assumes the liability of the remote seller or marketplace facilitator for all taxes due the Commission, whether current or delinquent, whether known to the Commission or discovered later, and for all interest, penalties, costs, and charges on such taxes.

H. Before the effective date of the transfer, the transferee of a business shall obtain from the Commission an estimate of the delinquent sales tax, penalty, and interest, if any, owed by the remote seller or marketplace facilitator as of the date of the transfer, and shall withhold that amount from the consideration payable for the transfer, until the remote seller or marketplace facilitator has produced a receipt from the Commission showing that all tax obligations imposed by this article have been paid. A transferee that fails to withhold the amount required under this subsection shall be liable to the Commission and taxing jurisdiction for the lesser of the amount of delinquent sales tax, penalty, and interest due from the remote seller or marketplace facilitator as of the date of transfer, and the amount that the transferee was required to withhold.

I. In this section, the term “transfer” includes the following:

1. A change in voting control, or in more than fifty percent of the ownership interest in a remote seller or marketplace facilitator that is a corporation, limited liability company, or partnership; or

2. A sale of all or substantially all the assets used in the business of the remote seller or marketplace facilitator; or

3. The initiation of a lease, management agreement, or other arrangement under which another person becomes entitled to the remote seller’s or marketplace facilitator’s gross receipts from sales, rentals, or services.

J. Subsection (H) of this section shall not apply to any person who acquires their ownership interest in the ongoing business as a result of the foreclosure of a lien that has priority over the Commission’s sales tax lien.

K. Upon termination, dissolution, or abandonment of a corporate business, any officer having control or supervision of sales tax funds collected, or who is charged with responsibility for the filing of returns or the payment of sales tax funds collected, shall be personally liable for any unpaid taxes, interest, administrative costs, and penalties on those taxes if such officer willfully fails to pay or cause to be paid any taxes due from the corporation. In addition, regardless of willfulness, each director of the corporation shall be jointly and severally liable for unpaid amounts. The officer shall be liable only for taxes collected which became due during the period he or she had the control, supervision, responsibility, or duty to act for the corporation. This section does not relieve the corporation of other tax liabilities or otherwise impair other tax collection remedies afforded by law.

L. A remote seller or marketplace facilitator who terminates the business without the benefit of a purchaser, successor, or assign shall make a final tax return and settlement of tax obligations within thirty days after such termination. If a final return and settlement are not received within thirty days of the termination, the remote seller or marketplace facilitator shall pay a penalty of $100 (one hundred dollars), plus an additional penalty of $25 (twenty-five dollars) for each additional thirty-day period, or part of such a period, during which the final return and settlement have not been made, for a maximum of six additional periods. (Ord. 21-02 § 1, 2021)

4.08.400 Use of information on tax returns.

A. Except as otherwise provided in this article, all returns, reports, and information required to be filed with the Commission under this article, and all information contained therein, shall be kept confidential and shall be subject to inspection only by:

1. Employees and agents of the Commission and taxing jurisdiction whose job responsibilities are directly related to such returns, reports, and information;

2. The person supplying such returns, reports, and information; and

3. Persons authorized in writing by the person supplying such returns, reports, and information.

B. The Commission will release information described in subsection (A) of this section pursuant to subpoena, order of a court or administrative agency of competent jurisdiction, and where otherwise required by law to do so.

C. Notwithstanding subsection (A) of this section, the following information is available for public inspection:

1. The name and address of sellers;

2. Whether a business is registered to collect taxes under this article;

3. The name and address of businesses that are sixty days or more delinquent in filing returns or in remitting sales tax, or both filing returns and remitting sales tax, and if so delinquent, the amount of estimated sales tax due and the number of returns not filed.

D. The Commission may provide the public statistical information related to sales tax collections; provided, that no information identifiable to a particular remote seller or marketplace facilitator is disclosed.

E. Nothing contained in this section shall be construed to prohibit the delivery to a person, or their duly authorized representative, of a copy of any return or report filed by them, nor to prohibit the publication of statistics so classified as to prevent the identification of particular buyers, remote sellers, or marketplace facilitators, nor to prohibit the furnishing of information on a reciprocal basis to other agencies or political subdivisions of the State or the United States concerned with the enforcement of tax laws.

F. Nothing contained in this section shall be construed to prohibit the disclosure through enforcement action proceedings or by public inspection or publication of the name, estimated balance due, and current status of payments, and filings of any remote seller or marketplace facilitator or agent of any remote seller or marketplace facilitator required to collect sales taxes or file returns under this article, who fails to file any return and/or remit in full all sales taxes due within thirty days after the required date for that business. Entry into any agreement whether pursuant to the provisions of this article or otherwise shall not act as any prohibition to disclosure of the records of that remote seller or marketplace facilitator as otherwise provided in this article.

G. A prospective lessee or purchaser of any business or business interest may inquire as to the obligation or tax status of any business upon presenting to the Commission a release of tax information request signed by the authorized agent of the business.

H. All returns referred to in this article, and all data taken therefrom, shall be kept secure from public inspection, and from all private inspection. (Ord. 21-02 § 1, 2021)

4.08.410 Violations.

A. A remote seller or marketplace facilitator that fails to file a sales tax return or remit sales tax when due, in addition to any other liability imposed by this article, shall pay to the Commission all costs incurred by the Commission to determine the amount of the remote seller’s or marketplace facilitator’s liability or to collect the sales tax, including, without limitation, reviewing and auditing the remote seller’s or marketplace facilitator’s business records, collection agency fees, and actual reasonable attorney’s fees.

B. A person who causes or permits a corporation of which the person is an officer or director, a limited liability company of which the person is a member or manager, or a partnership of which the person is a partner, to fail to collect sales tax or to remit sales tax to the Commission as required by this article shall be liable to the Commission for the amount that should have been collected or remitted, plus any applicable interest and penalty.

C. Notwithstanding any other provision of law, and whether or not the Commission initiates an audit or other tax collection procedure, the Commission may bring a declaratory judgment action against a remote seller or marketplace facilitator believed to meet the criteria to establish that the obligation to remit sales tax is applicable and valid under local, State, and Federal law. The action shall be brought in the judicial district of the taxing jurisdiction.

D. The Commission may cause a sales tax lien to be filed and recorded against all real and personal property of a remote seller or marketplace facilitator where the remote seller or marketplace facilitator has:

1. Failed to file sales tax returns for two consecutive filing periods as required by the article; or

2. Failed within sixty days of the end of the filing period from which taxes were due to either (a) remit all amounts due or (b) to enter into a secured payment agreement as provided in this article.

3. Prior to filing a sales tax lien, the Commission shall cause a written notice of intent to file to be mailed to the last known address of the delinquent remote seller or marketplace facilitator.

E. In addition to other remedies discussed in this article, the Commission may bring a civil action to:

1. Enjoin a violation of this article. On application for injunctive relief and a finding of a violation or threatened violation, the superior court shall enjoin the violation.

2. Collect delinquent sales tax, penalty, interest and costs of collection, either before or after estimating the amount of sales tax due.

3. Foreclose a recorded sales tax lien as provided by law.

F. All remedies hereunder are cumulative and are in addition to those existing at law or equity. (Ord. 21-02 § 1, 2021)

4.08.420 Penalties for violations.

A. A buyer, remote seller, or marketplace facilitator who knowingly or negligently submits false information in a document filed with the Commission pursuant to this article is subject to a penalty of $500 (five hundred dollars).

B. A remote seller or marketplace facilitator who knowingly or negligently falsifies or conceals information related to its business activities with the Commission or taxing jurisdiction is subject to a penalty of $500 (five hundred dollars).

C. A person who knowingly or negligently provides false information when applying for a certificate of exemption is subject to a penalty of $500 (five hundred dollars).

D. Any remote seller or marketplace facilitator who fails to file a return required under this article by the due date, regardless of whether any taxes were due for the reporting period for which the return was required, shall be subject to a penalty of $25 (twenty-five dollars) for the first sales tax return not timely filed. The filing of an incomplete return shall be treated as the filing of no return.

E. A remote seller or marketplace facilitator who fails or refuses to produce requested records or to allow inspection of their books and records shall pay to the Commission a penalty equal to three times any deficiency found or estimated by the Commission with a minimum penalty of $500 (five hundred dollars).

F. A remote seller or marketplace facilitator who falsifies or misrepresents any record filed with the Commission is guilty of an infraction and subject to a penalty of $500 (five hundred dollars) per record.

G. Misuse of an exemption card is a violation and subject to a penalty of $50 (fifty dollars) per incident of misuse.

H. Nothing in this article shall be construed as preventing the Commission from filing and maintaining an action at law to recover any taxes, penalties, interest and/or fees due from a remote seller or marketplace facilitator. The Commission may also recover attorney’s fees in any action against a delinquent remote seller or marketplace facilitator. (Ord. 21-02 § 1, 2021)

4.08.430 Remote sellers with a physical presence in the taxing jurisdiction.

A. Sellers with a physical presence in a taxing jurisdiction and no remote or Internet-based sales shall report, remit, and comply with standards, including audit authority, of the taxing jurisdiction.

B. Sellers with a physical presence in a taxing jurisdiction that also have remote or internet-based sales where the point of delivery is in a different taxing jurisdiction shall (1) report and remit the remote or internet sales to the Commission; and (2) report and remit the in-store sales to the taxing jurisdiction.

C. Sellers with a physical presence in a taxing jurisdiction that also have remote or internet-based sales where the point of delivery is in the same taxing jurisdictions shall report and remit those remote sales to the taxing jurisdiction.

D. Remote sellers and marketplace facilitators that do not have a physical presence in a taxing jurisdiction must report and remit all remote sales to the Commission.

E. For all purchases the tax rate added to the sale price shall be as provided in the taxing jurisdiction’s sales tax code, based on the point of delivery.

F. A marketplace facilitator is considered the remote seller for each sale facilitated through its marketplace and shall collect, report, and remit sales tax to the Commission. A marketplace facilitator is not considered to be the remote seller for each sale or rental of lodging facilitated through its marketplace, wherein the seller is considered to have a physical presence in the taxing jurisdiction. (Ord. 21-02 § 1, 2021)

4.08.440 Remittance of tax – Remote seller held harmless.

A. Any remote seller or marketplace facilitator that collects and remits sales tax to the Commission as provided by law may use an electronic database of state addresses that is certified by the Commission pursuant to subsection (C) of this section to determine the jurisdictions to which tax is owed.

B. Any remote seller or marketplace facilitator that uses the data contained in an electronic database certified by the Commission pursuant to subsection (C) of this section to determine the jurisdictions to which tax is owed shall be held harmless for any tax, charge, or fee liability to any taxing jurisdiction that otherwise would be due solely as a result of an error or omission in the database.

C. Any electronic database provider may apply to the Commission to be certified for use by remote sellers or marketplace facilitators pursuant to this section. Such certification shall be valid for three years. In order to be certified, an electronic database provider shall have a database that satisfies the following criteria:

1. The database shall designate each address in the State, including, to the extent practicable, any multiple postal address applicable to one location and the taxing jurisdictions that have the authority to impose a tax on purchases made by purchasers at each address in the State.

2. The information contained in the electronic database shall be updated as necessary and maintained in an accurate condition. In order to keep the database accurate, the database provider shall provide a convenient method for taxing jurisdictions that may be affected by the use of the database to inform the provider of apparent errors in the database. The provider shall have a process in place to promptly correct any errors brought to the provider’s attention. (Ord. 21-02 § 1, 2021)

4.08.450 Definitions.

Adoption of definitions does not compel an individual municipality to exempt certain defined items. Each municipality should specifically adopt definitions necessary for consistency to implement both brick-and-mortar sales tax code and provisions related to remote sellers or marketplace facilitators. For definitions that have no applicability to brick-and-mortar sales tax code, municipality may choose to either include definitions in the definitional section of general sales tax ordinance or adopt the common definitions by reference.

A. “Buyer or purchaser” means a person to whom a sale of property or product is made or to whom a service is furnished.

B. “Commission” means the Alaska Intergovernmental Remote Sales Tax Commission established by agreement between local government taxing jurisdictions within Alaska, and the delegated tax collection authority.

C. “Delivered electronically” means delivered to the purchaser by means other than tangible storage media.

D. “Entity-based exemption” means an exemption based on who purchases the product or who sells the product. An exemption that is available to all individuals shall not be considered an entity-based exemption.

E. “Goods for resale” means:

1. The sale of goods by a manufacturer, wholesaler, or distributor to a retail vendor, and sales to a wholesale or retail dealer who deals in the property sold for the purpose of resale by the dealer.

2. The sale of personal property as raw material to a person engaged in manufacturing components for sale, where the property sold is consumed in the manufacturing process of, or becomes an ingredient or component part of, a product manufactured for sale by the manufacturer.

3. The sale of personal property as construction material to a licensed building contractor where the property sold becomes part of the permanent structure.

F. “Marketplace facilitator” means a person that contracts with remote sellers to facilitate for consideration, regardless of whether deducted as fees from the transaction, the sale of the remote seller’s property or services through a physical or electronic marketplace operated by the person, and engages:

1. Directly or indirectly, through one or more affiliated persons, in any of the following:

a. Transmitting or otherwise communicating the offer or acceptance between the buyer and remote seller;

b. Owning or operating the infrastructure, electronic or physical, or technology that brings buyers and remote sellers together;

c. Providing a virtual currency that buyers are allowed or required to use to purchase products from the remote seller; or

d. Software development or research and development activities related to any of the activities described in subsection (F)(2) of this section, if such activities are directly related to a physical or electronic marketplace operated by the person or an affiliated person; and

2. In any of the following activities with respect to the seller’s products:

a. Payment processing services;

b. Fulfillment or storage services;

c. Listing products for sale;

d. Setting prices;

e. Branding sales as those of the marketplace facilitator;

f. Order taking;

g. Advertising or promotion; or

h. Providing customer service or accepting or assisting with returns or exchanges.

G. “Member” means a taxing jurisdiction that is a signatory of the Alaska Intergovernmental Remote Seller Sales Tax Agreement, thereby members of the Commission, and who have adopted the Alaska Remote Seller Sales Tax Code.

H. “Monthly” means occurring once per calendar month.

I. “Nonprofit organization” means a business that has been granted tax-exempt status by the Internal Revenue Service (IRS). An association, corporation, or other organization where no part of the net earnings of the organization inures to the benefit of any member, shareholder, or other individual, as certified by registration with the IRS.

J. “Person” means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or any other legal entity.

K. “Physical presence” means a seller who establishes any one or more of the following within a local taxing jurisdiction:

1. Has any office, distribution or sales house, warehouse, storefront, or any other place of business within the boundaries of the local taxing jurisdiction;

2. Solicits business or receiving orders through any employee, agent, salesman, or other representative within the boundaries of the local taxing jurisdiction or engages in activities in this state that are significantly associated with the seller’s ability to establish or maintain a market for its products in this State;

3. Provides services or holds inventory within the boundaries of the local taxing jurisdiction;

4. Rents or leases property located within the boundaries of the local taxing jurisdiction.

A seller that establishes a physical presence within the local taxing jurisdiction in any calendar year will be deemed to have a physical presence within the local taxing jurisdiction for the following calendar year.

L. “Point of delivery” means the location at which property or a product is delivered or service rendered.

1. When the product is not received or paid for by the purchaser at a business location of a remote seller in a taxing jurisdiction, the sale is considered delivered to the location where receipt by the purchaser (or the purchaser’s recipient, designated as such by the purchaser) occurs, including the location indicated by instructions for delivery as supplied by the purchaser (or recipient) and as known to the seller;

2. When the product is received or paid for by a purchaser who is physically present at a business location of a remote seller in a taxing jurisdiction the sale is considered to have been made in the taxing jurisdiction where the purchaser is present even if delivery of the product takes place in another taxing jurisdiction. Such sales are reported and tax remitted directly to the taxing jurisdiction and not to the Commission;

3. For products transferred electronically, or other sales where the remote seller or marketplace facilitator lacks a delivery address for the purchaser, the remote seller or marketplace facilitator shall consider the point of delivery the sale to the billing address of the buyer.

M. “Product-based exemptions” means an exemption based on the description of the product and not based on who purchases the product or how the purchaser intends to use the product.

N. “Property” and “product” means both tangible property, an item that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses; and intangible property, anything that is not physical in nature (i.e., intellectual property, brand recognition, goodwill, trade, copyright and patents).

O. “Quarter” means trimonthly periods of a calendar year; January-March, April-June, July-September, and October-December.

P. “Receive” or “receipt” means:

1. Taking possession of property;

2. Making first use of services;

3. Taking possession or making first use of digital goods, whichever comes first.

The terms “receive” and “receipt” do not include temporary possession by a shipping company on behalf of the purchaser.

Q. “Remote sales” means sales of goods or services by a remote seller or marketplace facilitator.

R. “Remote seller” means a seller or marketplace facilitator making sales of goods or services delivered within the State of Alaska, without having a physical presence in a taxing jurisdiction, or conducting business between taxing jurisdictions, when sales are made by internet, mail order, phone or other remote means. A marketplace facilitator shall be considered the remote seller for each sale facilitated through its marketplace.

S. “Resale of services” means sales of intermediate services to a business the charge for which will be passed directly by that business to a specific buyer.

T. “Sale” or “retail sale” means any transfer of property for consideration for any purpose other than for resale.

U. “Sales or purchase price” means the total amount of consideration, including cash, credit, property, products, and services, for which property, products, or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:

1. The seller’s cost of the property or product sold;

2. The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;

3. Charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;

4. Delivery charges;

5. Installation charges; and

6. Credit for any trade-in, as determined by State law.

V. “Seller” means a person making sales of property, products, or services, or a marketplace facilitator facilitating sales on behalf of a seller.

W. “Services” means all services of every manner and description, which are performed or furnished for compensation, and delivered electronically or otherwise outside the taxing jurisdiction (but excluding any that are rendered physically within the taxing jurisdiction), including but not limited to:

1. Professional services;

2. Services in which a sale of property or product may be involved, including property or products made to order;

3. Utilities and utility services not constituting a sale of property or products, including but not limited to sewer, water, solid waste collection or disposal, electrical, telephone services and repair, natural gas, cable or satellite television, and internet services;

4. The sale of transportation services;

5. Services rendered for compensation by any person who furnishes any such services in the course of his trade, business, or occupation, including all services rendered for commission;

6. Advertising, maintenance, recreation, amusement, and craftsman services.

X. “Tax cap” means a maximum taxable transaction.

Y. “Taxing jurisdiction” means a local government in Alaska that has a sales tax and is a member of the Alaska Remote Sellers Sales Tax Commission.

Z. “Transferred electronically” means obtained by the purchaser by means other than tangible storage media. (Ord. 21-02 § 1, 2021)

4.08.470 Supplemental definitions.

The Commission shall promulgate supplemental definitions that are incorporated into this Remote Seller Sales Tax Code. Supplemental definitions are available at www.arsstc.org/code. Provisions of the supplemental definitions that are amended, deleted, or added prior to or after the effective date of the latest amendment to this article shall be applicable for purposes of this article on the effective date provided for such amendments, deletions, or additions, including retroactive provisions. (Ord. 21-02 § 1, 2021)