HomeMy WebLinkAboutRes2020-017 Sponsored by: Meszaros
CITY OF SEWARD,ALASKA
RESOLUTION 2020-017
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, DELEGATING AUTHORITY TO THE KENAI PENINSULA
BOROUGH TO IMPLEMENT, ADMINISTER, AND ENFORCE THE
PROVISION OF THE UNIFORM CODE TO THE ALASKA
INTERGOVERNMENTAL REMOTE SALES TAX COMMISSION, AND
SUPPORTING ADOPTION OF KENAI PENINSULA BOROUGH
ORDINANCE 2020-03
WHEREAS, the City of Seward became a member of the Alaska Intergovernmental
Remote Seller Sales Tax Commission (Commission) with the passage of Resolution 2019-109
(adopted November 15, 2019), and approval of a certain Alaska Intergovernmental Remote
Seller Sales Tax Agreement(Agreement); and
WHEREAS, the purpose of the Commission is to implement a single-level statewide
sales tax administration for the collection and remittance of sales tax for goods and services sold
by certain remote sellers and marketplace facilitators; and
WHEREAS, under the Agreement, each member municipality must adopt the Alaska
Uniform Remote Seller Sales Tax Code(Uniform Code) as adopted by the Commission's Board
of Directors within one hundred twenty(120)days of adoption of the Uniform Code; and
WHEREAS, the Commission adopted the Uniform Code on January 6, 2020; and
WHEREAS, the Kenai Peninsula Borough (KPB) has proposed adopting the Uniform
Code via KPB Ordinance 2020-03, which will amend Title 5 of the KPB Code of Ordinances
(KPB Code), including amendments to KPB Code Section 5.18, and the adoption of KPB Code
Section 5.19; and
WHEREAS, Seward City Code Section 5.35 delegates the power to assess, collect, and
remit sales and use taxes levied to the Kenai Peninsula Borough, in accordance with AS
29.35.170 and Chapter 5.18 of the KPB Code; and
WHEREAS, KPB Ordinance 2020-03 authorizes the Commission to implement,
administer and enforce the provisions of the Uniform Code on behalf of the Borough; and
WHEREAS, it is in the best interest of the City of Seward for the Kenai Peninsula
Borough to amend KPB Title 5 to adopt and implement the Uniform Code.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
111 CITY OF SEWARD,ALASKA that:
CITY OF SEWARD,ALASKA
RESOLUTION 2020-017
Section 1. The City of Seward concurs in the Kenai Peninsula Borough's authorization
and delegation of authority to the Alaska Intergovernmental Remote Sales Tax Commission to
implement, administer, and enforce the provisions of the Uniform Code on behalf of the City of
Seward.
Section 2. The City of Seward supports adoption of Kenai Peninsula Borough Ordinance
2020-03.
Section 3. A copy of this resolution shall be forwarded to the Kenai Peninsula Borough
and the Alaska Remote Seller Sales Tax Commission.
Section 4. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this
24th day of February, 2020.
THE C TY F SEWARD, ALASKA
sty Terry, ay
AYES: Crites, Baclaan, McClure, Butts, Osenga, Terry
NOES: None
ABSENT: Seese
ABSTAIN: None
ATTEST:
B enda J. Ballou, MC
City Clerk
(City S' • SF Z4/4..
.
e
00,
• SEAL •
. s),.:•64t l�ti r
1 •
ti••. OF A`� '%04.
Agenda Statement
Meeting Date: February 24, 2020
To: City Council -"
From: City Attorney
Agenda Item: Resolution 2020-017 "A Resolution Delegating Authority to the Kenai
Peninsula Borough to Implement, Administer, and Enforce the Provision
of the Uniform Code to the Alaska Intergovernmental Remote Sales Tax
Commission, and Supporting Adoption of Kenai Peninsula Borough
Ordinance 2020-03"
BACKGROUND &JUSTIFICATION:
Resolution 2020-017 concurs in the Kenai Peninsula Borough's authorization and
delegation of authority to the Alaska Intergovernmental Remote Sales Tax Commission to
implement, administer and enforce the provisions of the Uniform Code on behalf of the City of
Seward. In addition, the City of Seward supports the adoption of Kenai Peninsula Borough
Ordinance 2020-03.
INTENT:
The intent of the Resolution is to approve the City's support of the proposed Borough
ordinance authorizing the Alaska Remote Seller Sales Tax Commission to implement the
Uniform Remote Seller Sales Tax Code.
CONSISTENCY CHECKLIST: Yes No N/A
1. Comprehensive Plan (document source here): X
2. Strategic Plan (document source here): X
3. Other (list):
1
00905809.DOCX
42
FISCAL NOTE:
The fiscal impact is yet to be determined but no fiscal note is required at this stage.
Approved by Finance Department:
ATTORNEY REVIEW: Yes x No Not Applicable
2
00905809.DOCX
43
Introduced by: Cooper,Smalley
Date: 01/21/20
Hearing: 02/25/20
Action:
Vote:
KENAI PENINSULA BOROUGH
ORDINANCE 2020-03
AN ORDINANCE AMENDING KPB 5.18 SALES TAX CODE AND ENACTING KPB
5.19 UNIFORM REMOTE SELLER SALES TAX CODE
WHEREAS, the inability to effectively collect sales tax on sales of personal property, products
or services transferred or delivered into Alaska by sellers who do not have a
physical presence in the borough ("remote seller") is eroding the sales tax base of
Alaska communities and resulting in revenue losses that are 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 sales 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 without collecting sales tax, 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 sales, 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 failure to effectively collect sales tax on remote or internet-based sales results
in the creation of incentives for businesses to avoid a physical presence in the
borough, resulting in less jobs and increasing the share of taxes paid by those
consumers who buy from competitors with a physical presence in the borough; 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
economy generally, as well as local infrastructure; and
WHEREAS, the recent decision by the United States Supreme Court in South Dakota v. Wayfair
("Wayfair") allows for the amendment of the sales tax code to account for remote
sellers who do not have a physical presence in the borough, but do have a taxable
connection with the borough; and
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 1 of 27
44
WHEREAS, the Wayfair decision provides guidance that includes the defensibility of a single-
level statewide administration of remote sales tax collection and remittance so long
as the law is not retroactive in its application and provides a safe harbor to sellers
who have limited sales or transactions in Alaska; and
WHEREAS, in order to implement a single-level statewide sales tax administration, numerous
local taxing jurisdictions within Alaska worked together to establish an
intergovernmental entity known as the Alaska Remote Seller Sales Tax
Commission (the "Commission"); and
WHEREAS, currently 23 municipalities in Alaska are members of the Commission; and
WHEREAS, the function and powers of the Commission are set forth in the Alaska
Intergovernmental Remote Seller Sales Tax Agreement (the "Agreement"), a
cooperative agreement between Commission members; and
WHEREAS, as part of the process to implement a remote seller sales tax code and pursuant to
Resolution 2019-056, the borough signed the Agreement and is currently a full
member of the Commission; and
WHEREAS, five of the incorporated cities within the borough are members of the Commission;
and
WHEREAS, representatives from the borough, the City of Soldotna, and the City of Kenai also
currently hold three of the seven Board of Director seats on the Commission; and
WHEREAS, under the terms of the Agreement, in order to maintain membership in the
Commission, local governments must enact the Uniform Remote Seller Sales Tax
Code ("Uniform Code") as adopted by the Commission's Board of Directors;
WHEREAS, the Board of Directors adopted the Uniform Code at its meeting on January 6,2020;
and
WHEREAS, the Uniform Code will govern the collection and remittance of municipal sales tax
applicable to remote or internet-based sales; and
WHEREAS, the purpose of the Uniform Code is to comply with guidance in Wayfair by
providing statewide threshold criteria, streamlined single-level tax administration
for remote sellers, and no retroactive application; and
WHEREAS, the Uniform Code will provide for streamlined remote sales tax collection and
remittance process which is necessary to avoid claims that local municipal tax
unduly burdens interstate sellers; and
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 2 of 27
45
WHEREAS, this ordinance will adopt the Uniform Code, amend current borough sales tax code
for consistency, and authorize the Commission to administer the remote sales tax
collection and remittance for the borough; and
WHEREAS, this is the culmination of a process that began in June of 2019 and is the last step
before municipal tax collected by remote sellers can be remitted to the borough
through the Commission; and
WHEREAS, in light of the Wayfair decision, failure to adopt a uniform, streamlined, remote
seller sales tax code will jeopardize the ability of the borough and its cities to collect
tax on remote sales;
NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KENAI
PENINSULA BOROUGH:
SECTION 1. That KPB 5.18.450(A) is hereby amended as follows:
5.18.450. - Tax jurisdiction Point of Taxation.
A. The rate of tax to be added to the sale price is based on the place of sale. The place of sale of
goods and merchandise is the location of the [RETAIL OUTLET] physicalpresence at which
or from which delivery was made. This provision applies to goods delivered to buyers within
the borough and to goods delivered to buyers outside the borough but within the state of
Alaska.If the invoice includes a charge for installation,then the place of the sale for the goods
and service is the retail outlet at which or from which delivery was made. When goods are
delivered into the borough from a point outside of the borough and the seller maintains an
ongoing physical presence in the borough,then the location of the seller's in-borough presence
will determine the place of sale. [IF A SELLER HAS NO ONGOING PHYSICAL
PRESENCE IN THE BOROUGH BUT HAS ESTABLISHED NEXUS WITH THE
BOROUGH, THE POINT OF DELIVERY WILL DETERMINE THE PLACE OF SALE. IF
THE SELLER HAS NO ONGOING PHYSICAL PRESENCE IN, OR NEXUS WITH, THE
BOROUGH THE SALE IS NOT SUBJECT TO THE BOROUGH SALES TAX. FOR
PURPOSES OF THIS SECTION THE FOLLOWING TERMS ARE DEFINED AS SHOWN
BELOW:
1. "NEXUS" MEANS THE SELLER HAS ESTABLISHED A TAXABLE
CONNECTION WITHIN THE BOROUGH BY USE OF MARKETING
TECHNIQUES, SUCH AS DIRECTED ADVERTISING IN THE BOROUGH VIA
TELEPHONE OR INTERNET, OR DOOR-TO-DOOR SALES WITHIN THE
BOROUGH, OR BY USE OF CONTRACT WORKERS OR CONTRACT OR
COMMISSION AGENTS OR BUSINESSES, WHICH ARE ASSOCIATED WITH
THE SELLER'S EFFORTS TO ESTABLISH OR MAINTAIN A MARKET FOR
ITS GOODS OR SERVICES, DELIVER THOSE GOODS OR SERVICES, OR
PROVIDE WARRANTY OR OTHER REPAIR OR RETURN SERVICES IN THE
BOROUGH.
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 3 of 27
46
2. THE "POINT OF DELIVERY" WHERE THERE IS NO ONGOING PHYSICAL
PRESENCE IN THE BOROUGH IS THE PLACE WHERE PHYSICAL
POSSESSION OF THE GOODS IS TRANSFERRED TO THE CUSTOMER.]
SECTION 2. That KPB 5.18.680 is hereby enacted as follows:
5.18.680 Uniform Remote Seller Sales Tax Code
Sellers with no physicalpresence in the borough that have remote or internet-based sales in the
borough and sellers with a physicalpresence in the borough that have remote or internet-based
sales within other taxing jurisdictions in Alaska are subject to KPB 5.19 instead of KPB 5.18.
SECTION 3. That KPB 5.19 is enacted as follows:
KPB 5.19. Uniform Remote Seller Sales Tax Code
5.19.010. 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 Code shall be broadly construed and shall favor
inclusion rather than exclusion.
C. Exemptions from the tax levied under this Code 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 Code or the taxing jurisdiction's Code.
D. The scope of this Code shall apply to remote sellers or marketplace facilitators, delivering
products or services to Member municipalities adopting this Code, within the state of
Alaska.
5.19.020. 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.
5.19.030. 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.
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 4 of 27
47
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 iurisdiction(s)where
the prope , or product is sold, or service that was rendered is received, and based on the
date the prope . 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'
Codes .
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.
5.19.040. 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 (200) 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, propem,
products, or services rendered within the state of Alaska.
5.19.050. No Retroactive Application.
The obligations to collect and remit sales tax required by this chapter are applicable at the effective
date of the ordinance adopting the Alaska Remote Seller Sales Tax Code.
5.19.060. Payment and Collection.
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 5 of 27
48
Pursuant to this Code, 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 jjurisdiction. Failure by the remote seller or marketplace
facilitator to collect the tax shall not affect the remote seller's, or marketplace facilitator's,
responsibilitypayment to the Commission.
5.19.070. Remote Seller and Marketplace Facilitator Registration Requirement.
A. If a remote seller's gross statewide sales within the last calendar year meets or exceeds the
Threshold Criteria, the remote seller shall register with the Commission. If a marketplace
facilitator's gross statewide sales within the last calendar year meets or exceeds 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 (30) calendar days of the effective date of
this Code or within thirt.0) calendar days of meeting the Threshold Criteria whichever
occurs second. Registration shall be to the Commission on forms prescribed b. the
Commission.
C. An extension may be qpplied for and granted based on criteria established by the
Commission,based on evidence produced to describe time necessary o Mdate software or
other technical needs, not to exceed ninety (90
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 non-assignable and non-transferable.
5.19.080. Tax Filing Schedule.
A. All remote sellers or marketplace facilitators subject to this Code 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 riling 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
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 6 of 27
49
files a return showing a termination or sale of the business in accordance with this Code.
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 30
Quarter 2 (April —June) July 31
Quarter 3 (July— September) October 31
Quarter 4 (October—December) January 31
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
Code 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 Code.
Six 6) 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 suporting
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
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
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 7 of 27
50
portion of the claim of exemption for which no documentation is provided.
5.19.090 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 Code may be
determined and assessed for a period of six (6) 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 (6) 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(6)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 thiM(30)calendar days after service of
notice of the estimated tax:
I. 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 meal 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 meal. The basis and _grounds
for granting an meal of an assessment are:
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 8 of 27
51
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 meal), 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
penally of fifty dollars($50)for each calendar month or partial month for which the amount
of sales tax that is due has been determined.
5.19.100. Returns —Filin2 Contents.
A. Every remote seller or marketplace facilitator required by this chapter 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 jjurisdiction's code; and
5. Such other information as ma,, b�quired 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 (3) 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.
5.19.110. 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.
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 9 of 27
52
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.
5.19.120. Amended Returns.
A. A remote seller or marketplace facilitator may file an amended sales tax return, with
supporting documentation, and the Commission mn accept the amended return,but only
in the following circumstances:
i. The amended return is filed within one (1) year of the original due date for the return;
and
ii. The remote seller or marketplace facilitator provides a written justification for
requesting approval of the amended return; and
iii. 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 figure included in the original returns are
incorrect; and the Commission adjusts the return within two (2) 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:
i. The remote seller or marketplace facilitator provides a written justification for
requesting approval of the supplemental return; and
ii. The remote seller or marketplace facilitator agrees to submit to an audit upon request
of the Commission.
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 10 of 27
53
5.19.130. 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 rinds
each of the following:
1. 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;
2. Such extension is a dire necessity for bookkeeping reasons and would avert undue hardship
upon the remote seller or marketplace facilitator;
3. 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;
4. 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 chapter;
5. No such extension shall be made retroactively to cover existing delinquencies.
elinquencies.
5.19.140. 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
chapter 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 chapter, 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.
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 11 of 27
54
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 (2)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 riled, 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 five
hundred dollars ($500) 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.
5.19.150.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 thigy (30) calendar days of the date of
the notice of estimated tax or results of an audit or examination. The protest must set forth:
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 12 of 27
55
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(30) 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.
5.19.160. Penalties and Interest for Late Filing.
A. A late filing fee of twenty-five dollars ($25)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(15%)per annum until paid.
C. In addition, delinquent sales tax shall be subject to an additional penalty of 5%per month,
or fraction thereof, until a total of 20% 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 fort,. -f�(45) calendar days after the date of delinquency. A remote
seller or marketplace facilitator may not be granted more than one (1) waiver of penalty
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 13 of 27
56
under this subsection in any one calendar year. The Commission shall report such waivers
of penalty to the taxing jjurisdiction, in writing.
5.19.170. 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 repaymentplan in the previous two (2) calendar years.
C. The repaymentplan shall include a secured promissory note that substantially complies
with the following terms:
i. The remote seller or marketplace facilitator agrees to pay a minimum of ten
percent(10%)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.
ii. 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 (2) years.
iii. Interest at a rate of fifteen percent (15%) per annum shall accrue on the
principal sum due. Interest shall not apply to penalties owed or to interest
accrued at the time the repaymentplan is executed or accruing during the term
of the repayment plan.
iv. If the remote seller or marketplace facilitator is a corporation or a limited
liabili , entity the remote seller or marketplace facilitator agrees to provide a
personal guarantee of the obligations under the repayment plan.
V. The remote seller or marketplace facilitator agrees to pay all future tax bills in
accordance with the provisions of this chapter.
vi. 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 (2) 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
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 14 of 27
57
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.
5.19.180. 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 which 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 (6)years from the date of the
return reporting such sales, and shall preserve for a period of six (6) 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 chapter.
5.19.190. 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 thiM (30) days after the date of such conveyance.
B. At least ten (10) business days before any such sale is completed, the remote seller or
marketplace facilitator shall send to the Commission,by i1pproved 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 convey
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 this 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 sixt(60) 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 (10) business days before the sale is
completed, the Commission shall have twelve (12) 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.
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 15 of 27
58
G. A person acquiring any interest of a remote seller or marketplace facilitator in a business
required to collect the tax under this chapter 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 chapter 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 (50%) of the ownership
interest in a remote seller or marketplace facilitator that is a corporation, limited
liabifi . 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, supervthe 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.
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 16 of 27
59
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 (30) days after such termination. If a final return and settlement
are not received within thirty(30) days of the termination, the remote seller or
marketplace facilitator shall pay a penalty of one hundred dollars ($100), plus an
additional penalty of twenty-five dollars($25)for each additional thirty_(30-)dayperiod,
or part of such a period, during which the final return and settlement have not been made,
for a maximum of six (6) additional periods.
5.19.200. Use of Information on Tax Returns.
A. Except as otherwise provided in this chapter, all returns, reports and information required
to be filed with the Commission under this Code, and all information contained therein,
shall be kept confidential and shall be subject to inspection onlyby-
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 chapter;
3. The name and address of businesses that are sixly(60)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 defive!Y 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
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 17 of 27
60
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 chapter,who fails to file any return and/or remit
in full all sales taxes due within thirty (30) days after the required date for that business.
Entry into any agreement whether pursuant to the provisions of this chapter 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 chapter.
G. A prospective lessee or purchaser of any business or business interest may quire as to the
obligation or tax status of any business upon presenting to the Commission a release of tax
information request signedby byby the authorized agent of the business.
H. All returns referred to in this chapter, and all data taken therefrom, shall be kept secure
from public inspection, and from all private inspection.
5.19.210. Violations.
A. A remote seller or marketplace facilitator that fails to rile a sales tax return or remit sales
tax when due, in addition to any other fiabifily imposed by this Code, 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 a _gency fees, and actual reasonable attorneyfees, 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 liabili , 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 Code shall be liable to the Commission for the amount
that should have been collected or remitted, plus any applicable interest and penalty.
C. Notwithstanding an. other 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:
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 18 of 27
61
1. Failed to file sales tax returns for two (2) consecutive filing periods as required by
the Code; or
2. Failed within sixty (60) 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 paw
agreement as provided in this Code.
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 Code, the Commission may bring a civil
action to:
1. Enjoin a violation of this Code. 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
equi1y.
5.19.220. Penalties for Violations.
A. A buyer, remote seller, or marketplace facilitator who knowingly or negligently submits
false information in a document riled with the Commission pursuant to this Code is
subject to a penalty of five hundred dollars ($500).
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 five hundred dollars ($500j.
C. A person who knowingly or negligently provides false information when applying for or a
certificate of exemption is subject to a penalty of five hundred dollars ($500).
D. Any remote seller or marketplace facilitator who fails to file a return required under this
chapter 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 twenty-five dollars($25)
for the first sales tax return not timely filed. The filing of an incomplete return shall be
treated as the filing of no return.
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 19 of 27
62
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
penally equal to three (3) times any deficiency found or estimated by the Commission
with a minimum penalty of five hundred dollars ($500I
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 five hundred
dollars $500)per record.
G. Misuse of an exemption card is a violation and subject to a penalty of fifty dollars ($50)
per incident of misuse;
H. Nothing in this chapter 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.
5.19.230. Remote Sellers with a phvsical presence in the taxing jurisdiction.
A. Sellers with a physicalpresence 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 physicalpresence in a Taxing Jurisdiction that also have remote or internet-
based sales where the Point of Delivery is in a different Taxing Jurisdictions shall (i)
report and remit the remote or internet sales to the Commission, and (import and remit
the in-store sales to the Taxing Jurisdiction.
C. Sellers with a physicalpresence 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 physicalpresence 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 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
physicalpresence in the Taxing Jurisdiction.
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 20 of 27
63
5.19.240. 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 liabifi , to any taxing jjurisdiction 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 t�pose 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 jjurisdictions 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.
5.19.250. Definitions.
For purposes of this chapter, the following definitions shall apply:
"Buyerpurchaser" means a person to whom a sale of grope , or product is made or to whom
a service is furnished.
"Commission" means the Alaska Intergovernmental Remote Sales Tax Commission established
by Agreement between local government taxing jurisdictions within Alaska, and delegated tax
collection authority.
"Delivered electronically" means delivered to the purchaser by means other than tangible storage
media.
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 21 of 27
64
"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.
"Goods for resale" means:
A. the sale of goods by a manufacturer, wholesaler or distributor to a retail vendor; sales to a
wholesale or retail dealer who deals in the property sold, for the purpose of resale by the
dealer.
B. Sales 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 b. the
manufacturer.
C. Sale of personal property as construction material to a licensed building contractor where
the property sold becomes part of the permanent structure.
"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:
A. Directly or indirectly, through one or more affiliated persons in any of the following:
(i) Transmitting or otherwise communicating the offer or acceptance between the bum
and remote seller;
(ii)Owning _or operating the infrastructure,electronic or physical,or technology operating the infrastructure,electronic or physical,or technology that brings
buyers and remote sellers together;
(iii) Providing a virtual currency that buyers are allowed or required to use to purchase
products from the remote seller; or
(iv) Software development or research and development activities related to any of the
activities described in (b) of this subsection (3), if such activities are directly related to a
physical or electronic marketplace operated by the or an affiliated person; and
B. In any of the following activities with respect to the seller's products:
(i)Paymentprocessing services;
(ii) Fulfillment or storage services;
(iii) Listing products for sale;
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 22 of 27
65
(iv) Setting prices;
(v)Branding sales as those of the marketplace facilitator;
(vi) Order taking,
(vii) Advertising or promotion, or
(viii)Providing customer service or accepting or assisting with returns or exchanges.
"Member" means a taxing jurisdiction that is a signatory of the Alaska Remote Sales Tax
Intergovernmental Agreement, thereby members of the Commission, and who have adopted the
Remote Seller Sales Tax Code.
"Monthly" means occurring once per calendar month.
"Nonprofit organization" means a business that has been granted tax-exempt status b. the
Internal Revenue Service (IRS); means 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.
"Person" means an individual, trust, estate, fiduciary,partnership, limited liability company
limited liabilitypartnership, corporation, or any other legal entity.
"Physicalpresence" 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 jjurisdiction 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 jjurisdiction.
A seller that establishes a physicalpresence within the local taxing jjurisdiction in any calendar
year will be deemed to have a physicalpresence within the local taxing jurisdiction for the
following calendar year.
"Point of delivery" means the location at which propertyproduct is delivered or service
rendered.
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 23 of 27
66
A. 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 delive ,relied
by the purchaser(or recipient) and as known to the seller.
B. When the product is received or paid for by 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 not to the Commission.
C. 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 bum
"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.
"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).
"Quarter" means trimonthly periods of a calendar year; January-March, April-June, July-
September, and October-December.
"Receive or receipt" means
A. Takings possession of property;
B. Making first use of services; or
C. 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.
"Remote sales" means sales of goods or services by a remote seller or marketplace facilitator.
"Remote seller" means a seller or marketplace facilitator making sales of goods or services
delivered within the State of Alaska, without having a physicalpresence in a taxing jjurisdiction,
or conducting business between taxing jurisdictions, when sales are made by internet, mail order,
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 24 of 27
67
phone or other remote means. A marketplace facilitator shall be considered the remote seller for
each sale facilitated through its marketplace.
"Resale of services" means sales of intermediate services to a business the charye for which will
be passed directlyby that business to a specific bum
"Sale" or "retail sale" means any transfer of property for consideration for any purpose other
than for resale.
"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:
A. The seller's cost of the property or product sold;
B. 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;
C. Charges by the seller for any services necessary to complete the sale, other than
delivery and installation charges;
D. Delivery charges,
E. Installation charges; and
F. Credit for any trade-in, as determined by state law.
"Seller" means a person making sales of property products, or services, or a marketplace
facilitator facilitating sales on behalf of a seller.
"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:
A. Professional services;
B. Services in which a sale of property or product may be involved, includingspropem
or products made to order;
C. 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;
D. The sale of transportation services;
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 25 of 27
68
E. 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,
F. Advertising, maintenance, recreation, amusement, and craftsman services.
"Tax cap" means a maximum taxable transaction.
"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.
"Transferred electronically" means obtained by the purchaser by means other than tangible
storage media.
5.19.260 Supplemental Definitions.
The Commission shall promulgate Suplemental Definitions that are incorporated into this Remote
Seller Sales Tax Code. Supplemental Definitions are available at www.arsstc.org. Provisions of
the Suplemental Definitions that are amended, deleted, or added prior to or after the effective
date of the latest amendment to this chapter shall be applicable for purposes of this chapter on the
effective date provided for such amendments, deletions, or additions, including retroactive
provisions.
SECTION 4. That the Alaska Intergovernmental Remote Sales Tax Commission is hereby
authorized to implement, administer, and enforce the provisions of KPB 5.19
Uniform Remote Seller Sales Tax Code. This authority remains in full force and
effect until the assembly revokes this authorization or otherwise withdraws from
the Alaska Remote Seller Sales Tax Commission.
SECTION 5. This ordinance is effective March 1, 2020.
ENACTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS *DAY
OF *,2020.
Kelly Cooper, Assembly President
ATTEST:
Johni Blankenship, MMC, Borough Clerk
Ordinance 2020-03 New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska
Page 26 of 27
69
Yes:
No:
Absent:
Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2020-03
Page 27 of 27
70