HomeMy WebLinkAbout11152019 City Council Special Mtg Packet Seward City Council
Agenda Packet
Special City Council Meeting
Friday, November 15, 2019
Council Chambers, City Hall
12:00 p.m.
SPECIAL MEETING REQUEST
Pursuant to Seward City Code 2.10.030 (2), this is to serve as the written notice
calling a Special City Council Meeting on Friday, November 15, 2019 at 12:00
p.m. for the purpose of:
Resolution 2019-109, Authorizing The City Of Seward To Join
The Alaska Remote Seller Sales Tax Commission For The
Purpose Of Developing, Implementing, And Enforcing A Remote
Seller Sales Tax Code And Designating The Seward City Manager
As The City's Commission Representative.
The meeting will commence in the City Council Chambers, City Hall, 410 Adams
Street, Seward. All interested persons are invited to attend the meetings.
Signed this 13"' day of November, 2019 at 9:00 a.m.
Mayor er
2 Council Members
Upon this request the City Clerk will give due and proper notice as required by SCC
2.10.032
(No business shall be transacted other than stated above.)
SPECIAL MEETING NOTICE
Pursuant to Seward City Code 2.10.030 (2), this is to serve as the written notice
calling a Special City Council Meeting on Friday, November 15, 2019 at 12:00
p.m. for the purpose of:
Resolution 2019-109, Authorizing The City Of Seward To Join
The Alaska Remote Seller Sales Tax Commission For The
Purpose Of Developing, Implementing, And Enforcing A Remote
Seller Sales Tax Code And Designating The Seward City Manager
As The City's Commission Representative.
The meeting will commence in the City Council Chambers, City Hall, 410 Adams
Street, Seward. All interested persons are invited to attend the meetings.
Posted: Wednesday, November 13, 2019 at 9:00 a.m.
City Hall bulletin board
U.S. Post Office
Harbormaster's Building
Seward Community Library Museum
The City of Seward, Alaska
Special City Council Meeting
Friday,November 15, 2019 12:00 p.m.
Christy Terry 1. Call To Order
Mayor
Term Expires 2022 2. Pledge Of Allegiance
Sue McClure 3. Roll Call
Vice Mayor
Term Expires 2020 4. Citizen Comments On Any Subject Except Those Items
Scheduled For Public Hearing. [Those Who Have Signedln WillBe
Sharyl Seese Given The First Opportunity To Speak. Total Time For This Agenda Item is
Council Member 36 Minutes.]
Term Expires 2021 5. Approval Of Agenda And Consent Agenda[Approval of Consent
Agenda passes all routine items indicated by asterisk(*). Consent Agenda
John Osenga items are not considered separately unless a council member so requests. In
Council Member the event of such a request, the item is returned to the Regular Agenda.]
Term Expires 2021
6. New Business
Kelley Lane
C A. Resolutions
Council Member
Term Expires 2020
Resolution 2019-109,Authorizing The City Of Seward To Join
Dale Butts The Alaska Remote Seller Sales Tax Commission For The
Council Member Purpose Of Developing, Implementing, And Enforcing A
Term Expires 2022 Remote Seller Sales Tax Code And Designating The Seward
City Manager As The City's Commission Representative.
Tony Baclaan
Council Member 7• Council Comments
Term Expires 2022
8. Citizen Comments
9. Council And Administration Response To Citizen Comments
Scott Meszaros 10. Adjournment
City Manager
Brenda Ballou
City Clerk
Holly Wells
City Attorney
Citv of Seward, Alaska Council Agenda
November 15, 2019 Page I
Sponsored by: Meszaros
CITY OF SEWARD,ALASKA
RESOLUTION 2019-109
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY OF SEWARD TO JOIN THE
ALASKA REMOTE SELLER SALES TAX COMMISSION FOR THE
PURPOSE OF DEVELOPING, IMPLEMENTING, AND ENFORCING A
REMOTE SELLER SALES TAX CODE AND DESIGNATING THE
SEWARD CITY MANAGER AS THE CITY'S COMMISSION
REPRESENTATIVE
WHEREAS, the inability to effectively collect sales tax on sales of personal property,
products, or services transferred or delivered into Alaska by a remote seller in response to orders
placed electronically by local consumers is eroding the sales tax base of Alaska communities and
resulting in revenue losses that is causing imminent harm to residents through the loss of critical
funding for local education; and
WHEREAS, the harm from the loss of revenue is especially problematic in Alaska
because the state has no broad-based tax, and sales tax revenues are essential in funding the
provision of services by local governments; and
WHEREAS, the failure to collect tax on remote sales creates artificial market distortions
and competitive advantages for remote sellers by perpetuating tax shelters for businesses that
limit their physical presence in the state or its municipalities, but still sell goods and services to
local consumers, something that becomes easier and more prevalent as technology continues to
advance; and
WHEREAS, the structural advantages for remote sellers, including the absence of point-
of-sale tax collection, combined with the general growth of online retail, means that the erosion
of the sales tax base is a growing problem that will only worsen in the near future if the Borough
is not able to legally collect remote seller sales tax within the framework of current United States
Supreme Court case law; and
WHEREAS, the recent decision by the United States Supreme Court in South Dakota v.
Wayfair allows for the amendment of the sales tax code to account for remote sellers who do not
have a physical presence in either the State of Alaska or within the Kenai Peninsula Borough, but
do have a taxable connection with those jurisdictions; and
WHEREAS, the decision in South Dakota v. Wavfair provided guidance that included
the defensibility of a single-level statewide administration of remote sales tax collection and
remittance; and
WHEREAS, remote sellers who make a substantial number of deliveries into or have
large gross revenues from Alaska benefit extensively from the Alaska market, affecting the
CITY OF SEWARD,ALASKA
RESOLUTION 2019-109
economy generally, as well as local infrastructure; and
WHEREAS, modern computing and software options ensure that it is neither unusually
difficult nor a substantial burden for remote sellers to collect and remit sales taxes associated
with sales into Alaska taxing jurisdictions; and
WHEREAS, in order to implement a single-level statewide sales tax administration, it is
the intent of numerous local taxing jurisdictions within Alaska to establish an intergovernmental
entity known as the Alaska Remote Seller Sales Tax Commission (the "Commission"); and
WHEREAS, the function and powers of the Commission will be set forth in the Alaska
Intergovernmental Remote Seller Sales Tax Agreement (the "Agreement"), a cooperative
agreement between Commission members; and
WHEREAS, under the terms of the Agreement, in order to maintain membership in the
Commission, the Borough will be required to adopt certain uniform code provisions for the
collection and remittance of municipal sales tax applicable to sales made by remote sellers; and
WHEREAS, the uniform remote sales tax code will be presented to the Borough
Assembly for consideration once adopted by the Commission to comply with guidance found in
the Waypir decision; and
WHEREAS, if adopted, the administration of remote sales tax collection and remittance
will be delegated to the Commission; and
WHEREAS, the intent of the Agreement is to enable Alaska's taxing jurisdictions to levy
their municipal sales tax to the maximum limit of federal and state constitutional doctrines; and
WHEREAS, Article X, Section 13 of the Alaska Constitution authorizes local
government to enter into agreements for the cooperative or joint administration of any function
or power, unless otherwise prohibited by law or charter;
WHEREAS, in addition, AS 29.35.010(13) provides authority for the Borough to enter
into intergovernmental cooperative agreements for the joint administration of a borough function
or power;
WHEREAS, the purpose of being an early member of the Commission is to have a voice
during the formation process while not committing to any future obligation or action; and
WHEREAS, a member will be able to withdraw from the Commission if the adopted
bylaws, uniform code, or fees are not acceptable to the member municipality.
CITY OF SEWARD,ALASKA
RESOLUTION 2019-109
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD,ALASKA that:
Section 1. The city manager is hereby authorized to negotiate, execute, and submit all
necessary documents to obtain and maintain membership in the Alaska Remote Seller Sales Tax
Commission, including the Alaska Intergovernmental Remote Seller Sales Tax Agreement,
included as Attachment A, to this resolution.
Section 2. The City Manager is designated as the City's representative on the
Commission.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this
15th day of November, 2019.
THE CITY OF SEWARD,ALASKA
Christy Terry, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Brenda J. Ballou, MMC
City Clerk
(City Sea])
DocuSign Envelope ID:21BB766A-CD84-474D-8363-8993504AAOBE
Kenai Peninsula Borough
Finance Department
MEMORANDUM
TO: Kelly Cooper, Assembly President
Members, Kenai Peninsula Borough Assembly
THRU: Charlie Pierce, Mayor AT
FROM: Brandi Harbaugh, Finance Director SK
Sean Kelley, Deputy Borough Attorney
DATE: October 24, 2019
SUBJECT: Resolution 2019-,05bAuthorizing the Kenai Peninsula Borough to Join
the Alaska Remote Seller Sales Tax Commission for the Purpose of
Developing, Implementing, and Enforcing a Remote Seller Sales Tax
Code and Designating the Commission Representative (Mayor)
This resolution authorizes the borough administration to execute the Alaska
Intergovernmental Remote Seller Sales Tax Agreement (the "Agreement") and
become a member municipality of the Alaska Remote Seller Sales Tax
Commission (the "Commission"). This resolution also designates the borough's
representative on the Commission. The formation of and membership in the
Commission is the first step toward implementing a single-level administrator for
the collection and remittance of remote seller sales taxes. A single-level
administrator of remote seller sales taxes is a necessary long-term solution if the
borough wants to collect remote seller, or "e-commerce", sales tax.
The inability to effectively collect sales tax on sales of personal property, products,
or services transferred or delivered into the borough by a remote seller in response
to orders placed electronically by local consumers is eroding the sales tax base
of Alaska's communities. The resulting revenue losses are causing imminent harm
to residents through the loss of critical funding for local education.
The failure to collect tax on remote sales results in artificial market distortions and
competitive advantages for remote sellers through perpetuating tax shelters for
businesses that limit their physical presence but still sell goods and services to local
consumer, which gains more and more prevalence as technology continues to
advance.
The recent decision by the United States Supreme Court in South Dakota v.
Wayfair allows for amendment of the sales tax code to account for remote sellers
who do not have a physical presence in a taxing jurisdiction, but do have a
taxable connection with those jurisdictions. The decision in South Dakota v.
DocuSign Envelope ID:21BB766A-CD84-474D-8363-8993504AAOBE
Page -2-
October 24, 2019
Re" R2019- 05(n
Wayfair provided guidance that included the defensibility of a single-level
statewide administration of remote sales tax collection and remittance.
Remote sellers who make a substantial number of deliveries into or have large
gross revenues in Alaska benefit extensively from the Alaska market, affecting the
economy generally, as well as local infrastructure. Modern computing and
software options ensure that it is neither unusually difficult nor a substantial burden
for remote sellers to collect and remit sales taxes associated with sales into Alaska
taxing jurisdictions.
In the absence of state legislative action, in order to implement a single-level
statewide sales tax administration, it is the intent of participating local taxing
jurisdictions within Alaska to establish an intergovernmental entity (the
"Commission"). The function and powers of the Commission will be set forth in the
Agreement. Under the terms of the Agreement, in order to maintain membership
in the Commission, the borough will be required, through a separate ordinance,
to adopt certain uniform code provisions for the collection and remittance of
municipal sales tax applicable to sales made by remote sellers.
Article X, Section 13 of the Alaska Constitution authorizes local government to
enter into agreements for the cooperative or joint administration of any function
or power, unless otherwise prohibited by law or charter. In addition AS
29.35.010(13) provides authority for the borough to enter into intergovernmental
cooperative agreements for the joint administration of a borough function or
powers. The intent of the Agreement is to enable Alaska's taxing jurisdictions to
levy their municipal sales fax as now allowed by federal constitutional doctrines.
The uniform remote sales tax code will be presented to the assembly for
consideration once adopted by the Commission. If the uniform code is adopted
by the assembly, the administration of remote sales tax collection and remittance
will be delegated to the Commission. To be clear, this resolution only authorizes
entry into the Commission and a "seat at the table" during the formation process.
As an initial Commission member, the borough will have a voice in drafting and
adopting Commission bylaws, and a uniform remote seller sales tax code, and will
elect the Commission's Board of Directors. Once the Commission is formed and
bylaws are adopted, and before collections may begin, subsequent legislation
will come before the assembly that would adopt the uniform code, address
questions of fees for participation, and delegate remote seller sales tax
administration, collection, audit, and enforcement authority to the Commission.
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