Chapter 4.22
SEVERANCE TAX
Sections:
4.22.025 Tax rates for resources subject to tax.
4.22.040 Collection and administration.
4.22.047 Appeal of denial of tax refund.
4.22.060 Severance tax return verification.
4.22.080 Liability for and collection of severance tax.
4.22.090 Penalties and interest.
4.22.100 Enforcement and collection.
4.22.010 Definitions.
When not clearly otherwise indicated by the context, the following words and phrases, as used in this chapter, have the following meanings:
“Calendar quarter” means any one of the following three-month periods beginning on January 1st: January 1st through March 30th, April 1st through June 30th, July 1st through September 30th, and October 1st through December 30th.
“City” means city of Dillingham.
“Market value” means the prevailing value paid for seafood products of like kind and quality by seafood or fisheries businesses in the same market area to fishermen who own their vessels.
“Point of severance” means the point at which seafood products were harvested (removed from the water) within the city.
“Recovered units” means all units extracted or removed whether produced directly or contractually during the period of extraction or removal production.
“Seafood products” means any raw fin fish, shellfish, mollusks and other commercial products of the sea.
“Severer or harvester” means a person, company, corporation, or other entity engaged in the business of severing or harvesting natural resources within the city. This includes offshore processors of seafood products who process, deliver, catch, or receive seafood products within the boundaries of the city of Dillingham if those activities are not already subject to the city’s raw fish tax. It also includes persons who harvest seafood products within the boundaries of the city and transport the seafood products themselves to locations outside the city for sale and/or processing; provided, that the sales made by such harvesters are not already subject to the city raw fish tax. It does not include persons who sever or harvest seafood products for subsistence or sport uses. (Ord. 12-09 § 1 (part), 2012.)
4.22.020 Levy of tax.
There is levied in the city, on any severer or harvester harvesting or processing seafood products for sale, profit, or commercial use; provided, that these seafood products are not already subject to the city raw fish tax, an excise tax, denominated as a severance tax. The tax rate shall be the applicable rate as set forth in Section 4.22.025. (Ord. 12-09 § 1 (part), 2012.)
4.22.025 Tax rates for resources subject to tax.
The tax levied by this section shall be at the following rates:
A. For seafood products: two and one-half percent of the market value;
B. For resources not included herein: as may be considered and approved by the city council. (Ord. 12-09 § 1 (part), 2012.)
4.22.030 Exemptions.
A. If the annual market value of a natural resource severed within the city by a severer or harvester does not equal or exceed the amount of ten thousand dollars, the severer or harvester shall be exempt from taxation under this chapter.
B. The harvesters and processors of raw seafood products are exempt from taxation under this chapter if the seafood products harvested or processed are already subject to the city raw fish sales and use tax.
C. The harvesters and processors of raw seafood products are exempt from taxation under this chapter if the seafood products harvested or processed are for the sole purpose and use as bait. (Ord. 12-09 § 1 (part), 2012.)
4.22.040 Collection and administration.
A. A purchaser of seafood products from a severer or harvester subject to tax under this chapter shall register with the city and collect and transmit the tax on the severer’s behalf.
B. A purchaser who timely and correctly files a properly completed tax return along with full payment of all taxes due under this chapter shall be entitled to retain five percent of the total tax collected during the calendar quarter to defray administrative costs up to, but not to exceed, three hundred dollars.
C. The purchaser shall hold the tax collected in trust for the city until paid. The purchaser shall be entitled to keep any interest accruing to the tax account if the payment is timely.
D. The market value for the calendar quarter shall include the amount paid to any severer or harvester for taxable resources purchased but not paid for by the purchaser during any prior calendar quarter.
E. Every purchaser who makes payments for a seafood product subject to severance tax in a calendar quarter shall submit to the city a city of Dillingham severance tax return, under oath, containing the following information:
1. A description of the waters from which the resource was severed or harvested by commercial fishing district or such other description of location as may be approved by the city;
2. The gross amount of recovered units purchased from each severer or harvester during the calendar quarter; and
3. The market value of all recovered units severed or harvested during the calendar quarter as of the date of the return.
F. The return along with all taxes due the city for the calendar quarter must be received by the city on or before the last business day of the month following the end of the calendar quarter for which the return or statement is required. If no payments for seafood products were made in the previous calendar quarter no return is required to be filed.
G. This tax constitutes a lien chargeable against all property whether tangible or intangible owned by the severer. The lien may be foreclosed by the city in the same manner as any other lien against real or personal property. (Ord. 12-09 § 1 (part), 2012.)
4.22.045 Tax refunds.
A. A taxpayer from whom severance tax is collected and timely remitted to the city by a tax collector is eligible for a partial refund of severance tax, if they fall into one of two categories:
1. Low Income.
a. Household income, assets, and financial resources fall within the eligibility standards for the food stamp program under 7 U.S.C. 2011 through 2025, as amended; or
b. Who has paid a reduced price annual fee for the taxpayer’s fishing permit under AS 16.43.160(d) for the calendar year during which severance tax was collected from the taxpayer; or
2. Real property owner and has timely remitted real property tax.
B. A taxpayer who qualifies as low income is eligible for a partial refund of fifty percent of the tax paid under this chapter.
C. A taxpayer owning real property tax in Dillingham is eligible for a partial refund equal to fifty percent of the severance tax collected from the taxpayer up to a maximum refund equal to fifty percent of the property tax paid by the taxpayer to the city.
D. The taxpayer can apply for the low income or real property tax refund, but not both.
E. Any person entitled to a partial refund may obtain a partial refund from the city upon completion and submission of a refund application form to be provided by the city together with such supporting documentation as required by the city to establish eligibility for and the amount of the refund.
F. An application for a severance tax refund shall be filed during the period that begins November 1st and ends December 31st of each year. Failure to submit a refund application by December 31st means that no refund is due to the taxpayer for that year.
G. Applications for a refund under subsection B of this section shall be treated by the city as confidential documents not subject to disclosure under Section 2.01.050.
H. All refund amounts due to a taxpayer shall be paid by the city on or before March 15th each year. Should the city fail to pay any portion of a refund, due interest shall accrue from the due date until the date paid at an annual rate of eight percent.
I. The city may offset against any refund due to a taxpayer amounts owed to the city by the taxpayer for sales tax, port and harbor fees, personal property tax, utility charges or any other fines or fees. The amount so withheld shall be identified to the taxpayer in writing on or before February 15th of each year. If the taxpayer believes the offset amount is in error, the taxpayer is entitled to an informal hearing before the city manager on or before March 14th. (Ord. 12-09 § 1 (part), 2012.)
4.22.047 Appeal of denial of tax refund.
A. Any person whose application for a tax refund is denied may appeal to the city manager.
B. No appeal may be taken unless the applicant files with the city clerk written notice of appeal specifying grounds for such appeal within thirty days from the date the notice of denial of refund was mailed.
C. The city clerk shall acknowledge the written appeal by sending the appellant a notice, and notify the appellant by mail of the time and place for the hearing before the city manager.
D. The procedure for the appeal hearing before the city manager will be informal. The appellant and the person who made the decision on the refund application may themselves appear and present witnesses. The burden of proof in all cases shall be upon the party appealing.
E. The city manager shall make a written decision within five working days of the conclusion of the appeal hearing.
F. Any taxpayer aggrieved by the city manager’s final decision may appeal that decision to the superior court by filing with the city clerk written notice within thirty days of the date of mailing of the city manager’s decision. An appeal to the superior court under this section is an administrative appeal heard solely on the administrative record. The notice shall specify grounds for appeal. (Ord. 12-09 § 1 (part), 2012.)
4.22.050 Enforcement and penalties.
Repealed by Ord. 13-01. (Ord. 12-09 § 1 (part), 2012.)
4.22.060 Severance tax return verification.
The city manager or his/her designee may:
A. Require a severer or harvester, any agent or employee of this person, or the purchaser of natural resources taxed under this chapter to furnish any additional information reasonably necessary to compute the amount of the tax or to determine if a tax is due;
B. Examine the books, records, and files of any such person;
C. Conduct hearings and compel the attendance of witnesses and the production of books, records, and papers of any person; and
D. Make an investigation or hold any inquiry reasonably necessary to a disclosure of facts as to:
1. The amount of extraction or production of a natural resource of a severer or harvester;
2. The purchaser of the natural resource; and
3. Transportation of the resource. (Ord. 12-09 § 1 (part), 2012.)
4.22.070 Confidentiality.
Information and materials in the possession of the city which disclose the particulars of the business or affairs of the payer of taxes under this chapter will be kept confidential by the city except in connection with an official investigation by the city or other agency enforcing the laws of the city or the state. The city may publish statistics in a manner which prevents identification of particular returns and may publish tax lists showing the names, taxes, penalties, and interest with respect to taxpayers who are delinquent to assist in the collection of taxes. (Ord. 12-09 § 1 (part), 2012.)
4.22.080 Liability for and collection of severance tax.
The severer or harvester, or the purchaser or processor of the resources taxed under this chapter is liable for the amount of taxes, interest, and penalties due. The tax, together with penalties and interest, may be collected in a personal action brought in the name of the city. (Ord. 12-09 § 1 (part), 2012.)
4.22.090 Penalties and interest.
A. A person who fails to file a return as required under this chapter or who fails to remit all the taxes due the city shall pay a penalty of ten percent of the taxes due with a minimum penalty of one hundred dollars if no return is filed. The total penalty for a single calendar quarter shall not exceed three thousand dollars. The filing of an incomplete return shall be treated as the filing of no return.
B. Interest at the rate of six percent per annum shall be paid on all amounts due the city that are not received by the city as required under this chapter. Interest does not accrue on penalties.
C. A person who fails to apply for a certificate of registration as required by this chapter shall pay a penalty of three hundred dollars for the first offense. A purchaser of seafood products who, after notice, continues to conduct business without registering as required by Section 4.22.040 is subject to a penalty of five hundred dollars for each subsequent offense. Each day the purchaser conducts business without registering shall constitute a separate offense. If the city determines that a registered purchaser has previously violated this chapter, the registered purchaser is subject to the same penalty for violations of this chapter committed prior to the registration. A certificate of registration shall not be issued or renewed if the purchaser has not paid all fines, penalties, and other obligations to the city.
D. A person required to collect a tax under this chapter who fails to provide a written statement setting out the amount of the tax due on the transaction shall pay a penalty to the city equal to the amount of the tax due on the sale.
E. In the event that the city is unable to ascertain the tax due to be remitted by a seller by reason of the failure of the seller to keep accurate books or records, allow inspection, failure to file a return, or falsification of records, the city may make an estimate of the tax due based on any information available to it. Notice of the estimate of taxes due shall be furnished the seller and shall become final for the purposes of determining liability of seller to the city in thirty days unless the seller earlier files an accurate return, supported by satisfactory records, indicating a lesser liability.
F. A person required to maintain records under the provisions of this chapter shall immediately notify the city of any fire, theft or other casualty that would prevent the person from complying with the provisions of this chapter. Such casualty is a defense to a civil penalty levied under subsection E of this section, but does not excuse the person from the liability for payment to the city of taxes required to be collected. Accidental or unexplained loss of funds or records does not excuse a person from the performance of any of the requirements under this chapter. (Ord. 13-01 § 3, 2013.)
4.22.100 Enforcement and collection.
The provisions of Sections 4.21.150 through 4.21.290, except Sections 4.21.240 and 4.21.260, are incorporated herein by reference and shall apply equally to all transactions that are subject to, and all liabilities arising under, this chapter. (Ord. 13-01 § 4, 2013.)