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Sponsored by: Oates
Introduction: May 9, 2011
Public Hearing: May 23, 2011
Enactment: May 23, 2011
CITY OF SEWARD, ALASKA
ORDINANCE 2011 -003
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AMENDING SEWARD CITY CODE SECTIONS 5.35.010 AND
5.35.035 TO ALLOW FOR AN INCREASE IN SALES TAX FOR ALCOHOL
BEVERAGES AND TOBACCO PRODUCTS
WHEREAS, the City of Seward (the "City ") and the Seward Community Library Museum
Building Committee (the "Committee ") have been working to secure funding, since 2003, for the
design and construction of a new community library museum (the "Project "); and
WHEREAS, the City and Committee have secured $5.1 million from the State of Alaska and
private foundation funding for the Project, and $1.1 million in grant applications are pending; and
WHEREAS, the City voters approved the issuance of a general obligation bond (the "Bond ")
in an amount not to exceed $5 million to finance capital costs of the Project; and
WHEREAS, additional funding sources for repayment of the Bond are under consideration,
including an increase in the City's sales tax levied on alcohol beverages and tobacco products; and
WHEREAS, the City currently levies a sales tax in the amount of four percent (4 %) and the
Kenai Peninsula Borough currently levies a sales tax in the amount of three percent (3 %), for a
combined sales tax in the City of seven percent (7 %); and
WHEREAS, it has been determined to be in the best interests of the City to increase the
City's sales tax levied on alcohol beverages and tobacco products from four percent (4 %) to twelve
percent (12 %).
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, HEREBY ORDAINS that:
Section 1. Seward City Code Section 5.35.010 is amended as follows:
Strikeout = delete Bold Italics = new
5.35.010. - Definitions.
In this chapter, unless the context specifically indicates otherwise, the
meaning of terms used in this chapter shall be as follows:
CITY OF SEWARD, ALASKA
ORDINANCE 2011 -003
Alcoholic beverages. Means beer, wine, distilled spirits, and all other
spirituous, vinous, malt and other fermented or distilled liquid, whatever the
origin, that is intended for human consumption and that contains one -half of one
percent (0.5 %) or more of alcohol by volume, whether produced commercially or
privately.
Business. Means any activity engaged in by any person, or caused to be
engaged in by such person, him, with the object of gain, benefit or advantage, either
direct or indirect.
Cigarette. Means a roll for smoking of any size or shape, made wholly or
partly of tobacco, whether the tobacco is flavored, adulterated, or mixed with
another ingredient, if the wrapper or cover of the roll is made of paper or a
material other than tobacco.
City manager. Means the city manager of the City of Seward or the
manager's designee.
Cost price. Means the actual cost to a purchaser of an item or article of
tangible personal property computed in the same manner as the gross proceeds in this
section.
Dealer. Means:
(1) Every person in the city who makes any retail sale or sales of tangible
personal property or services or who leases or rents any tangible
personal property or real property, the receipts from which are taxed
by this chapter;
(2) Every person engaged in the business of making any retail sales or
rentals of tangible personal property for use, storage or consumption
in this city who either:
a. Maintains, occupies or uses, permanently or temporarily,
directly or indirectly, or through a subsidiary or agent, by
whatever name called, an office, place of distribution, sales or
sample room or place, warehouse or storage place or other
place of business in this city;
b. Has any representative, agent, salesman, canvasser or solicitor
operating in this city under the authority of any person or
such person's his subsidiary for the purpose of selling,
CITY OF SEWARD, ALASKA
ORDINANCE 2011 -003
iii" delivering, or taking any orders for any tangible personal
property;
c. Every person who uses, consumes, stores or distributes
tangible personal property, whether purchased or self -
produced by such person, to be used or consumed in this city;
d. Every person who as a representative, agent or solicitor for an
out -of -city principal, solicits, receives, and accepts orders
from persons in this city for future delivery and whose
principal refuses to register under this chapter.
Distribution. Means the transfer or delivery of tangible personal property for
use, consumption, or storage by the distributee, and the use, consumption, or storage
of tangible personal property by a person who has processed, manufactured, refined,
or converted the property, but does not include the transfer or delivery of tangible
personal property for resale or any use, consumption, or storage otherwise exempt
under this chapter.
Employee. Means a person receiving consideration for services rendered an
employer, and who is entitled to worker's compensation coverage from the employer,
and whose employer makes all normal deductions from the employee's
compensation, including, but not limited to, state and federal withholding, social
security, unemployment and employment security benefits.
Employer. Means a person receiving services from an employee.
Gross proceeds. Means the total amount for which tangible personal property
or services are sold or for which tangible personal property or real property is rented,
valued in money, whether paid in money or otherwise, and includes any amount for
which credit is given to purchaser, consumer, or lessee by the dealer, without any
deduction therefrom on account of the cost of the property sold, the cost of materials
used, labor or service costs (whether incurred in the manufacture or installation of
tangible personal property or otherwise), transportation charges, losses or any other
expenses whatsoever. Cash discounts allowed and taken on sales are not included in
the gross proceeds nor shall gross proceeds include finance charges, carrying charges,
service charges or interest from credit extended on sales of tangible personal property
under conditional sales contracts or other conditional contracts providing for deferred
payments of the purchase price, nor shall gross proceeds include federal retailer's
excise tax or state excise taxes if the taxes are billed to the purchaser separately from
the selling price of the article. If used articles are taken in trade, or in a series of
trades as a credit or part payment on the sale of new or used articles, the tax levied in
CITY OF SEWARD, ALASKA
ORDINANCE 2011 -003
us i
this chapter shall be paid on the net difference between the gross proceeds derived
from the new or used articles and the credit for the used articles.
Import and imported. Apply to tangible personal property imported into this
city from other areas in the state or from other states as well as from foreign
countries, and "export" and "exported" apply to tangible personal property exported
from this city to other areas within the state or other states as well as to foreign
countries.
In this city or in the city. Means within the municipal boundary limits of the
City of Seward, Alaska.
Lease or rental. Means the leasing or renting of tangible personal property
and real property or the possession or use thereof by the lessee for a consideration,
without transfer of the title to the property.
Person. Means any individual, firm, copartnership, cooperative, nonprofit
membership corporation, joint venture, association, corporation, limited liability
company, estate, trust, business trust, trustee in bankruptcy, receiver, auctioneer,
syndicate, assignee, club, society, or other group or combination acting as a unit,
body politic or political subdivision, whether public or private, or quasi - public, and
the plural as well as the singular number.
Retailer. Means every person engaged in the business of making retail sales
of tangible personal property and providing taxable services as defined in this
chapter.
Retail sale or sale at retail. Means a sale to a consumer or to any person for
any purpose in the form of tangible personal property, other than for resale, or
services taxable under this chapter, and includes any transaction as the city manager,
upon investigation, finds to be in lieu of a sale. Sales for resale must be made in strict
compliance with this chapter. Any person making a sale for resale which is not in
accordance with this chapter shall himself be liable for payment of the tax. "Retail
sale" or "sale at retail" includes but is not limited to:
(1) Cash or in -kind consideration for the sale or charges for any room or
rooms, lodging, accommodations or board furnished by an owner or
contractor in any hotel, motel, inn, industrial facility, tourist camp,
tourist cabin, camping grounds, club or any other place in which
rooms, lodging space or accommodations or board are regularly
furnished to transients or residents for consideration. In case of such
CITY OF SEWARD, ALASKA
ORDINANCE 2011 -003
rooms, lodging, space, accommodations or board furnished by owners
or contractors, the owners or contractors shall pay the tax;
(2) Sales of tangible personal property to personas for resale if, because
of the operation of the business or its very nature, or the lack of a
place of business in which to display a certificate of registration, or
the lack of a place of business in which to keep records, or the lack of
adequate records, or because the persons are engaged in essentially
service businesses, or for any other reason, there is likelihood that the
city will lose tax funds due to the difficulty of policing the business
operations. The city manager may require vendors or sellers to such
persons to collect the tax imposed by this chapter on the cost price of
the tangible personal property sold to such persons and may refuse to
issue certificates of registration to such persons;
(3) The rendition of any taxable service;
(4) The purchase of supplies and equipment used or consumed in the
fabricating of an article of tangible personal property or in the
performance of a taxable service.
Sale. Means for consideration, any transfer of title or possession, or both,
exchange, barter, lease or rental, conditional or otherwise, in any manner or by any
means whatsoever, of tangible personal property, any lease or rental of real property,
and any rendition of a taxable service, and includes the fabrication of tangible
personal property for consumers who furnish, either directly or indirectly, the
materials used in fabrication; and the furnishing, preparing, or serving for a
consideration of any tangible personal property consumed on the premises of the
person furnishing, preparing or serving such tangible personal property. A transaction
whereby the possession of property is transferred, but the seller retains title as
security for the payment of the cost price is a sale.
Storage. Means any keeping or retention of tangible personal property for use,
consumption or distribution in this city, or for any purpose other than the sale at retail
in the regular course of business.
Tangible personal property. Means personal property which may be seen,
weighed, measured, felt or touched, or is in any other manner perceptible to the
senses. "Tangible personal property" does not include stocks, bonds, notes, insurance
or other obligations or securities.
Taxable sale. Means every sale of tangible personal property and every lease
or rental of tangible personal or real property.
CITY OF SEWARD, ALASKA
ORDINANCE 2011 -003
Taxable service. Means any service whatsoever, whether professional,
personal, pursuant to contract, subcontract, or otherwise, excluding only services
rendered by an employee to an employer.
Tobacco products. Means:
(1) A cigar;
(2) A cigarette;
(3) A cheroot;
(4) A stogie;
(5) A perique;
(6) Snuff and snuffflour;
(7) Smoking tobacco, including granulated, plug -cut, crimp -cut and
ready- rubbed tobacco, and any form of tobacco suitable for
smoking in a pipe or cigarette;
(8) Chewing tobacco, including cavendish, twist, plug, scrap, and
tobacco suitable for chewing; or
(9) An article or product made of tobacco or tobacco substitute but not
including a tobacco.
Section 2. Seward City Code Section 5.35.035 is amended as follows:
Strikeout = delete Bold Italics = new
5.35.035. Imposition of sales tax.
(a) There is levied and imposed, in addition to all other taxes and fees of every
kind now imposed by law, a consumer's sales tax on all retail sales of tangible
personal property, the lease or rental of tangible personal property or real
property, and the purchase of taxable services, the same to be collected in the
amount of three percent of the gross proceeds of each taxable sale or taxable
service. Big April 1, 2003, the The sales tax amount to be collected
shall be four percent of the gross proceeds of each taxable sale or taxable
service.
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CITY OF SEWARD, ALASKA OCT. `_ 0ti Moto►etpaZ o
ORDINANCE 2011 -003
(b) Effective January 1, 2012, in addition to the sales tax levied and collected
under subsection (a) of this section, there shall be levied and collected an
additional sales tax equal to eight percent of the gross proceeds of the retail
sale of alcoholic beverages and tobacco products sold in the city.
(c) The obligation to pay the sales tax is on the purchaser, consumer, renter, or
lessee. The seller, retailer, dealer, service provider, lessor, and all persons
making a retail sale, shall collect the sales tax at the time of payment for the
retail sale, taxable sale, or taxable service, and shall remit all sales taxes
collected under this chapter to the Kenai Peninsula Borough in accordance
with AS 29.35.170 and Chapter 5.18 of the Kenai Peninsula Borough Code.
Section 3. The change to the City's sales tax rate for alcoholic beverages and tobacco
products are for the purposes of generating funds to pay annual debt service on the Bond and
costs of the Project, including annual operating costs of the Project.
Section 4. Sections 1 and 2 of this ordinance shall become effective January 1, 2012. This
ordinance shall take effect 30 days following passage and posting.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 23
day of May, 2011.
THE CITY OF SEWARD, ALASKA
illard E. Dunham, Mayor
AYES: Valdatta, Bardarson, Shafer, Keil
NOES: Smith, Casagranda, Dunham
ABSENT: None
ABSTAIN: None
ATTEST:
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J . hanna Kinney, CMC ''` ° 4 F S �
ity Clerk
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