(Established by Ordinance 99-02 5/18/99)



Chapter 6.40 SALES AND USE TAX

 

Sections:

6.40.010                                  Definitions

6.40.020                                  Imposition; rate

6.40.030                                  Exemptions - enumerated

6.40.040                                  Application for exemption

6.40.050                                  Tax - computation

6.40.060                                  Statement of tax

6.40.070                                  Obligation to pay tax

6.40.080                                 Determination of Taxability/Liability for errors

6.40.090                                  Tax funds held in trust

6.40.100                                  Location and sales made and of services provided

6.40.110                                 Registration of sellers and buyers as tax collectors Certification of registration

6.40.120                                  Rulings and regulations

6.40.130                                  Payment and remittance - Application of payments - Deduction

6.40.140                                  Penalties and interest

6.40.150                                 Forced filing

6.40.160                                  Records - Investigation and audits

6.40.170                                  Liens

6.40.180                                  Accelerated returns

6.40.190                                 Termination, sale or transfer of retail business

6.40.200                                 Personal liability of corporate officers

6.40.210                                  Protest of tax by taxpayer

6.40.220                                  Protest of tax by collector

6.40.230                                  Refund of excess payment

6.40.240                                 Disposition of tax information

6.40.250                                  Time extensions

6.40.260                                  Use tax levied

6.40.270                                 Authority to contract collection

6.40.280                                  Enforcement

6.40.290                                  Violation - Criminal enforcement

 

 

  1. 6.40.10Definitions. (Chapter 6.40 established by Ordinance 90-10, 8/14/90)

     

    For purposes of this chapter, certain words and phrases are defined as follows:

     

    1. "Borough" means Lake and Peninsula Borough.

       

    2. "Buyer" means the first person who becomes directly or indirectly obligated to a seller for payment for personal property or services or becomes obligated to another for rent, lease or similar payments for possession or use of property.

       

    3. "Collector” means the person involved in a sale that is required to collect the tax levied under this chapter. In the case of the sale of raw fish, it is the buyer; in all other cases it is the seller.

       

    4. “Commercial Products of Borough Waters” means any raw finfish or bottom fish, shellfish, mollusks or other invertebrates and all other commercial products of the sea harvested in Borough waters, whether


Fresh, estuarine or salt, for sale, profit or commercial use.  (Amended by Ordinance 10-03, 3/12/10)

 

  1. "Person” means an individual, partnership, cooperative, association, joint venture, corporation, estate trust, business, receiver, or any entity, group or combination acting as a unit.

     

  2. "Processed" or "processing" means cooking, canning, smoking, butchering, freezing, salting, dehydrating and other activities that modify the condition of the fish in preparation of the fish for sale, but does not include decapitating, gutting, gilling, sliming, or icing by the person harvesting the fish if done for the purpose of maintaining the quality of the fish until it can be sold.

     

  3. "Raw fish" means fin fish and shellfish and includes, but is not limited to: crabs, shrimp, scallops, clams, oysters, sea cucumbers, salmon, and herring that have not been processed. Amended by Ordinance 04-04, 6/01/04

     

  4. "Sale means any sale, lease, rental, transfer or assignment of any right, title or interest in any property, and the sale or provision of any service, for valuable consideration.Sale" is an event that occurs when a person within the borough becomes directly or indirectly obligated for the payment for the sale of property, sale or performance of services or the lease, rental or use of property, including admissions to a place or event, and, if the sale is of raw fish, without regard to whether delivery by the seller occurred directly or indirectly nor whether delivery of the fish occurred inside or outside the Borough if the fish are purchased for delivery or are delivered to a location inside the Borough at the time of sale. A sale of raw fish occurs within the Borough if the fish ticket issued by the buyer to the seller for the sale of raw fish is issued within the Borough. A sale also includes the performance of services within the borough without regard to the place of sale of such services, and includes an event that occurs when a person within the Borough becomes directly or indirectly obligated to sell or convey property within the Borough, or to perform services within the Borough or to lease or rent to or permit the use of property within the Borough by another, including admissions to a place or event. Amended by Ordinance 05-03, 10/18/05

     

  5. "Sale price" means the total consideration, whether money, credit, rights or other property, paid, delivered or given by the buyer, expressed in terms of money and, in the case of a sale involving an exchange of property, service or other rights, the fair market value of the property, service or other rights exchanged, including delivery or installation costs, taxes, or any other expenses whatsoever, measured by the gross cost of the seller. It is without deduction for the cost of tangible property sold, the cost of property used, provided or consumed, the cost of labor, interest, delivery or taxes, or any other expenses whatsoever paid or accrued and without deduction on account of trade-ins, setoffs or losses. In the case of raw fish, sale price includes any indirect consideration such as fuel or supplies furnished directly or indirectly by the buyer or offsets to the cash value for gear furnished, and includes post purchase or post season adjustments or bonuses.

  1. "Sales Tax Administrator” or “Administrator” means the manager or the person designated by the manager as the sales tax administrator or the agent of the administrator.

     

  2. "Seller" means a person making a sale and includes every person who sells or vends property, every person  renting property to another and every person who sells or performs services for a valuable consideration.

     

  3. "Services" does not include labor performed by an employee for an employer.

     

  4. "Taxpayer" means the person involved in a sale that is first required to pay the tax levied under this chapter. In the case of the sale of raw fish it is the seller; in all other cases it is the buyer.

     

  5. "Value of property" is the consideration, whether money, credit, rights, or other property, expressed in terms of money paid or given or contracted to be paid or given by the buyer or person who uses the property to the seller for the property, the use of which is taxable under Section 260 of this chapter. In the case of property used that is acquired under conditions wherein the purchase price does not represent the true value of the property, the value of the property used shall be determined as nearly as possible according the selling price at the place of use of the property of like quality or character.


 

 

6.40.020        Imposition; rate.

 

There is levied and shall be collected a tax of two percent on all sales within the Lake and Peninsula Borough. (Amended by Ordinance 04-04, 6/01/04 and again by Ordinance 09-08; 11/14/09)

 

  1. Exemptions - enumerated.

     

    The following sales are exempt from the tax levied under this chapter:

     

    1. Sales to and by the United States Government, the State of Alaska and its political subdivisions.

       

    2. Sales to religious and charitable organizations in the conduct of their regular religious and charitable functions and activities upon presentation of an exemption certificate issued by the Borough. Regular religious and charitable functions and activities are those functions and activities of the religious or charitable organization that are exempt from income taxation under section 501 of the federal Internal Revenue Code.

       

    3. Sales that may not be taxed under the constitution or laws of the State of Alaska or the United States.

       

    4. Sales of property. (Amended by Ordinance 09-08; 11/14/09)

       

    5. Lease, rental or use of property not otherwise taxable as a service.

  1. The sale or performance of a service.

     

  2. Casual and isolated sales not made in the regular course of business.

     

  3. The resale of raw fish in essentially the same form as when purchased if the tax under this chapter paid on the prior purchase was at fair market value for the fish under the circumstances of the prior purchase.


 

 

  1. Exemptions - limited.

     

    The following sales are exempt from the tax levied under this chapter, but only in the specific circumstances described:

     

    1. Sales of Commercial Products of Borough Waters, but only if those Products are in essentially the same form as when purchased, provided that a severance tax under Chapter 91 was paid on those Products at the Gross Production Value for those Products. This exemption does not apply to any subsequent resale of those same Commercial Products of Borough Waters.

       

    2. Sales of Commercial Products caught or harvested outside of Borough Waters shall be subject to the tax levied under this chapter.


 

(Section added by Ordinance 09-08; 11/14/09)

 

 

6.40.040    Application for exemption.

 

  1. No exemption certificate may be granted except under written application for the exemption on a form provided by the Borough.

     

  2. The Borough may at any time require proof, in the form it considers necessary, of the grounds for the exemption and the amount of the exemption claimed under this section. The claimant shall have the burden of establishing his or her qualifications for an exemption, and the exemption laws and cases shall be strictly construed in favor of taxation.


 

 

6.40.050    Tax - computation.

 

The tax due under this chapter shall be computed by multiplying the sale price by two percent Amended by Ordinance 10-03, 3/12/2010.

 

6.40.060    Statement of tax.

 

A person required to collect a tax under this chapter shall provide the taxpayer with a statement of the amount of tax owing on any taxable transaction and shall retain a copy of such statement for a period of not less than five (5) years following the due date of the

payment to the Borough.

 

 

6.40.070    Obligation to pay tax.

 

  1. The obligation of the tax is upon the buyer, except that in the case of the sale of raw fish the tax is upon the seller. Except for the sale of raw fish, the seller shall collect the tax on all sales at the time of the sale. With respect to the sale of raw fish, the buyer shall segregate from funds of the buyer an amount equal to the tax due on the sale. Funds required to be segregated under this section are taxes collected or required to be collected under this chapter. With respect to the tax on services performed within the Borough, but not sold within the Borough, the sales tax shall be paid when payment for the services is made.

     

  2. Collection is enforceable by the seller or, in the case of raw fish, by the buyer, as a certified tax collector of the Borough, provided, however, that this shall not limit the liability of the person liable for the tax.


 

 

6.40.080    Determination of taxability - Liability for errors.

 

The collector shall determine whether a sale is taxable under this chapter. If the collector fails to collect the tax due on a sale because of an incorrect determination of taxability by the collector or for any other reason, the collector becomes liable to the Borough for the tax in the same manner as if the tax had been collected.

 

 

6.40.090    Tax funds held in trust.

 

All tax monies collected or segregated or required to be collected or segregated by the collector are funds of the Borough and shall be held in trust by the collector in a fund or account separate from all other funds and accounts of the collector until paid over to the Borough. Interest earned on such funds while held by the collector may be retained by the collector as compensation for segregating and protecting the funds of the Borough.

 

 

6.40.100    Location of sales made and services provided.

 

  1. A sale of property or a sale of services occurs within the Borough when either party to the sale is within the Borough when the sale is either negotiated or occurs. With respect to the sale of property, the sale occurs within the Borough when the property that is the subject of the sale is within the Borough when the sale is negotiated or occurs, regardless of the location of the parties. For purposes of a party that is not an individual, the location of the party is determined by the location of the individual who acts on behalf of the party when negotiating, closing, or executing the sale.

     

  2. When the use tax arises on raw fish under Section 6.40.240 (C) because the raw fish caught or harvested within the Borough is transported by a person who intends to sell the fish to a buyer outside of the Borough, the buyer is deemed to be located within the Borough for purposes of the sale, and is required to collect the tax in the same manner as a buyer under Section 6.40.070. Such buyers are required to register with the Borough under Section 6.40.110 and are subject to


the filing procedures and requirements set forth in this chapter.

 

 

 

6.40.110      Registration of sellers and buyers as tax collectors - Certification of registration.

 

  1. All sellers, except sellers of raw fish, and all buyers of raw fish shall file with the Borough an application for a certificate of registration on a form prescribed by the Borough not more than ten (10) days after the date of commencing business within the Borough, or the opening of an additional place of business, provided no registration is required if the business conducted does not require the person to collect a tax under this chapter. The application must contain or be accompanied by:

     

    1. The name and mailing address of the applicant;

       

    2. the location at which the applicant will conduct its business and where transactions subject to the tax under this chapter will occur; if the applicant's business is to be conducted from one or more vessels, the name of the vessels and the general location or areas in which each vessel will operate;

       

    3. If the applicant is a buyer of raw fish,

       

      1. the applicant's Alaska Fisheries Business License number;
      2. a copy of the applicant’s most recent Alaska Fisheries Business License Tax filing;
      3. a copy of the most recent statement provided the state of the amount of fisheries products the person expects to produce during he applicant's license year;

         

    4. the applicant's Alaska Business License number;

       

    5. a statement of the extent of property owned by the applicant in the Borough against which the tax liability of the applicant may be collected and other information with respect to description, location and value of the property which the Borough prescribes.

       

    6. The Application shall be accompanied by a check payable to the Borough in the amount of $200.00 as an annual application Processing Fee. The application fee is non-refundable.

      (Amended by Ordinance 09-09 on 10/14/09; Amended by Ordinance 17-02 on 1/17/2017)

       

  2. Upon receipt of a properly executed application, the sales tax administrator will issue a certificate of registration setting out the name of the registrant, its physical and its mailing addresses, and the place the registrant will be operating from a vessel. The certificate shall authorize the registrant to collect and enforce the collection of the tax required to be collected under this chapter. The certificate must be prominently displayed at the location set out in the certificate or upon the vessel named in the certificate. A separate certificate shall be issued for each vessel or location of an applicant.

     

  3. A certificate of registration is non-assignable and non-transferable and must be surrendered to the sales tax administrator by the registrant to whom it is


issued upon the registrant's ceasing to do business at the location or on the vessel named therein. If the business is continued at the same location, but there is a change in its form or organization such as a change of a single proprietorship to a partnership or corporation, or the admission or withdrawal of a partner, or other change, the registrant shall surrender the old certificate to the sales tax administrator with an application for a new certificate. If the business of a registrant is sold, leased or in any other manner transferred to another person, the registrant shall surrender the certificate to the sales tax administrator and the new owner, lessee or other successor to the business shall immediately apply for a new certificate.

 

  1. If there is a change in location of a registrant's place of business, the registrant shall surrender the certificate for the old location to the sales tax administrator along with a statement of the new address. Upon receipt of the old certificate and the new address, the sales tax administrator shall issue a new certificate of registration showing the new location.

     

  2. Before issuing a certificate of registration, the applicant may be required to post a bond, furnish a statement of net worth, or furnish such additional security as may be required by the sales tax administrator to insure full and prompt payment of taxes required to be collected under this chapter. (Amended by Ordinance 94-05, 5/17/94) (Regulations adopted by Resolution 99-08 5/18/99)

     

  3. A person applying for a certificate of registration under this section thereby gives consent to an inspection by the Borough of the applicant's Alaska Fisheries Business Tax returns and other information or records filed by the registrant with the State of Alaska for the purpose of enforcement and administration of the provisions of this chapter.


 

 

6.40.120      Rulings and regulations.

 

  1. The manager may promulgate and amend regulations and may prescribe the use of forms appropriate to the implementation of this chapter. Regulations promulgated by the manager are effective on the date they are promulgated unless a different date is indicated in the regulations; provided, all regulations are subject to repeal or revision by the Assembly at any time. Prior to promulgation, proposed regulations shall be submitted to the borough attorney for review and comment. Upon promulgating a regulation or any amendment to an existing regulation, the manager shall submit the regulation or amendment to the Assembly at its next regular meeting.

     

  2. If any person who is or may be required to pay or collect a tax under this chapter questions the application of this chapter to a transaction or other situation in which that person is involved or may become involved, the person may apply to the sales tax administrator for a ruling on the question. The sales tax administrator may rule on the question and may seek the advice of the borough attorney on the question. Before a ruling of the sales tax administrator is effective or binding on the borough, it must be signed by the manager. Rulings having general applicability shall be considered by the manager for promulgation as a regulation.


6.40.130      Payment and remittance - Application of payments - Deduction.

 

  1. Taxes required to be collected under this chapter during a calendar year are due and payable to the Borough within 30 days of the last day of the calendar quarter. Every collector shall file with the borough on forms furnished by the Borough a return containing the following information:

     

    1. Gross sales by the collector during the calendar quarter;
    2. Nontaxable sales during the calendar quarter;
    3. Taxable sales during the calendar quarter;
    4. Taxes collected on taxable purchases;
    5. Interest,    penalties,    deductions     and    such other information as may be required on the form.

       

      (Amended by Ordinance 92-16, 3/17/92)

       

  2. The return shall be signed and its completeness and accuracy sworn to by the collector under penalty of perjury.

     

  3. All sales are presumed to be taxable. An exemption claimed for any sale must be proved or adequately explained by the collector with the submission of the return.

     

  4. The completed return, together with the remittance of the tax required to be collected during the calendar quarter, must be received by the Borough at the address designated on the return form within 30 days of the last day of every calendar quarter.

    (Amended by Ordinance 92-16, 3/17/92)

     

  5. Any collector who was required to collect a tax during a calendar quarter shall file a return for the next following calendar quarter even though no tax may be due during the following quarter. A return filed for a quarter in which no tax was required to be collected must show why no tax was collected or is due. If the business is sold or transferred to another, whether voluntarily or involuntarily, the person filing the return shall provide on the form the name of the person to whom the business was sold or transferred. A person who files a return for a calendar quarter in which no taxes were required to be collected is not required to file additional returns until the person is again required to collect a tax under this chapter.

     

  6. If a complete return accompanied by the entire tax due and all interest and penalties is received by the Borough within the time allowed, the buyer may deduct and retain two percent (2%) of the tax due as compensation for its costs of administration of the tax; provided, the amount deducted and retained may not exceed $200.

     

  7. Amounts received with the return shall be applied in the following order:

     

    1. Penalties due, beginning with the oldest penalty;
    2. Interest due, beginning with the interest due on the oldest quarter; and
    3. Taxes due, beginning with the taxes due from the oldest quarter.


6.40.140      Penalties and interest.

 

  1. A person who fails to file a return as required under this chapter or who fails to remit all the taxes due the Borough by that person shall pay a penalty of five percent (5%) of the taxes due with a minimum penalty of $500.00 if no return is filed. The penalty is imposed for each month or part of a month during which the delinquency of failure to file exists up to a maximum total penalty for a single calendar quarter shall not exceed three thousand dollars ($3000). The filing of an incomplete return shall be treated as the filing of no return.

    (Amended by Ordinance 17-02 on 1/17/2017)

     

  2. Interest at the rate of twelve percent (12%) per annum shall be paid on all amounts due the Borough that are not received by the Borough as required under this chapter except interest does not accrue on penalties.

     

  3. A person who fails to apply for a certificate of registration as required by this chapter shall pay a penalty of five hundred dollars ($500.00). Such penalty must be paid before the license is issued or, if the original license was issued before the determination that a penalty was due or before a renewal or amended license is issued if the original license was issued before the determination that a penalty was due. A person who fails to apply for a certificate of registration, who engages in taxable transactions after being informed in writing that a certificate of registration is required, shall pay a penalty of one thousand dollars ($1,000) before the license is issued or before a renewal or amended license is issued if the original license was issued before the determination that a penalty was due.

    (Amended by Ordinance 17-02 on 1/17/2017)

     

  4. A person required to collect a tax under this chapter who fails to provide a written statement setting out the amount of the tax due on the transaction shall pay a penalty to the Borough equal to the amount of the tax due on the sale.

     

  5. A failure of or refusal of a person required to collect a tax under this chapter to produce records or allow inspection at such reasonable times as requested or demanded by the sales tax administrator shall pay to the Borough a penalty equal to three times any deficiency found or estimated to have occurred by the sales tax administrator; provided, the minimum penalty payment is three thousand dollars ($3000).

     

  6. A person required to maintain records under the provisions of this chapter shall immediately notify the Borough of any fire, theft or other casualty that would prevent the person from complying with the provisions of this chapter. Such casualty is a defense to a civil penalty levied under subsection E. of this section, but does not excuse the person from the liability for payment to the Borough of taxes required to be collected. Accidental or unexplained loss of funds or records does not excuse a person from the performance of any of the requirements under this chapter.

 

6.40.150      Forced filing.

 

If a collector under this chapter fails to file a complete and accurate return or to pay over all the taxes due as required by this chapter, the sales tax administrator may make an estimate of the taxes due based upon any information available. The administrator shall file a return for such collector and shall provide a copy of the return to the collector with a request that the collector  file  a  correct  return  along  with  payment  of  the  taxes  due.