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HomeMy WebLinkAboutResolution No. 2020-09lheeityef, KENAI, ALASKA "\/' Sponsored by: Legal CITY OF KENAI RESOLUTION NO. 2020-09 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, SUPPORTING THE COLLECTION OF SALES TAX FROM REMOTE SELLERS BY THE KENAI PENINSULA BOROUGH AND OTHER MUNICIPALITIES WITHIN THE BOROUGH, AUTHORIZING THE REMOTE SELLER SALES TAX COMMISSION TO IMPLEMENT, ADMINISTER AND ENFORCE PROVISIONS OF THE UNIFORM REMOTE SELLER SALES TAX CODE ON THE CITY'S BEHALF AND AFFIRMING THE CITY'S ADOPTION BY REFERENCE OF THE KENAI PENINSULA BOROUGH 'S UNIFORM REMOTE SELLER SALES TAX CODE. WHEREAS, the City joined the Alaska Remote Seller Sales Tax Commission (Commission) for the purpose of developing, implementing and enforcing a remote seller sales tax code pursuant to Resolution 2019-72; and, WHEREAS, the Commission, made up of municipalities in Alaska, has developed and implemented a single level statewide sales tax administration for the collection and remittance of sale tax on goods and servi ces sold by remote sellers enabling municipalities in Alaska to co llect sales tax from remote sellers in compliance with the decision by the United States Supreme Court in South Dakota v. Wayfair; and, WHEREAS, the Commission has contracted with the Alaska Municipal League, which in turn has contracted with software providers to provide necessary services for the Commission to implement the remote seller sales tax code; and, WHEREAS, the collection of sales tax from sellers making numerous and/or high value sales in Alaskan municipalities strengthens the sales tax base of municipalities aiding in the provision of government services and helps leve l the playing field between remote sellers and those with a physical presence in our communities; and, WHEREAS, it is in the best interest of the City to support the Kenai Peninsula Borough and other municipalities in the Borough in their efforts to implement the uniform remote sellers sales tax code; and, WHEREAS, except where specifically exempted , the City through KMC 7 .10.050 has incorporated by reference the Borough's sales tax; and , WHEREAS, the City supports the Borough's amendment of KPB 5.18-Sales Tax Code and enactment of KPB 5.19 Uniform Remote Seller Sales Tax Code for incorporation by reference into the City's Code. NOW, THEREFORE , BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA: Section 1. That the City of Kenai Supports the Kenai Peninsula Borough and other municipalities in the Borough implementing the remote seller sales tax code. Resolution No . 2020-09 Page 2 of 2 Section 2 . That the City supports the Kenai Peninsula Borough 's Adoption of Ordinance 2020-03-An Ordinance Amending KPB 5.18 Sales Tax Code and Enacting KPB 5.19 Uniform Remotes Seller Sales Tax Code and affirms the City 's adoption by reference through KMC 7.10 .050 of the amendments to existing borough sales tax code and enactment of new sales tax code provisions. Section 3. 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 on behalf of the City as adopted by reference by the City . Section 4. That this resolution takes effect immediately upon passage . PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 19th day of February, 2020. BRIAN GABRIEL , SR., MAYOR ATTEST: 'V/fl'or «1/t/t, a PaJ'~ Ot'tf «11't/t, a Fv.tflft; " 210 F idalgo Ave , Kenai , Alaska 996 11-7794 Telephone: (907 ) 283-7535 I F ax: (9 0 7 ) 2 8 3 -30 14 w w w .kena i.city MEMORANDUM TO: FROM: DATE: SUBJECT: Mayor Brian Gabriel and Kenai City Council Scott Bloom, City Attorney February 12 , 2020 Resolution No. 2020-09 -Supporting the Delegation of Remote Sales Tax Registration, Exemption Certification, Collection, Remittance, and Audit authority to the Alaska Remote Seller Sales Tax Commission. Pursuant to the US Supreme Court's 2019 decision in South Dakota v. Wayfair, states and municipalities are able to enforce sales tax collection and remittance on out of state , or remote sellers , selling goods and services in the tax jurisdiction with a taxable connection other than a physical presence . To comply with the Wayfair decision , municipalities in Alaska recognized the need to join together to form a single-leve l sta tewide sales tax administration . This is because the Wayfair decision emphasized the importance of South Dakota 's sales tax administration that allowed remote sellers to interface with one general sales ta x code for the whole state and one administrative entity, as opposed to hav ing to interface with numerous taxing jurisdictions within each state. The City Council authorized the City to join the Alaska Remote Seller Sales Tax Commission pursuant to Resolution 2019-72. As a member of the Commission , with a seat on the Board, the City has worked with the Commission to adopt bylaws , agreements for commission members, various policies , approve contracts for third party services and adopt a uniform remote sellers sales tax code . The un iform remote sellers sales tax code streamlines remote seller sales tax code provisions from the many different municipal taxing authorities in the state that wish to participate and collect sales tax on remote sales . The Kenai Peninsu la Borough is adopti ng these st reamlined code provisions through Ordinance 2020-03. The City has prev iously adopted by reference the Borough 's sales ta x code , except where specifically exempted , and through this Resolution affirms its intent to adopt amendments and new code provisions adopted by the Borough related to remote sales, effectively bringing the uniform remote sellers sales tax code into the City. While this affirmation is perhaps not necessary based on ex isting code ; KMC 7.10.050-Borough Sales Ta x Adopted by. Reference, I believe it is prudent for the C ity to Page 2 of 2 Resolution No. 2020-09 legislatively acknowledge and support the significant change to Borough code that will affect the City. In addition to adopting a uniform tax code, the Commission has also developed a single-level statewide sales tax administration . This has been done through a contract with the Alaska Municipal League . The Alaska Municipal League is providing administrative support to the Commission and has in turn contracted with two software companies (contracts ratified by the Commission Board) to facilitate the collect ion, remittance and enforcement of municipal sales tax at a single level. TTR is providing geographic information system technology and other services while MUNIRevs is providing a single filing and remittance system. The Commission has agreed to pay these two software companies a percentage of sales collected at varying scales . The Commission has also authorized a one-time fixed fee to TTR and reimbursement of direct cost plus 8% overhead to the Alaska Municipal League . All these costs are capped . It is my understanding that the costs to the City for participating in this program are competitive and justified . As more municipalities join the commission and collected amounts increase, costs to the City are designed to go down . In order to facilitate this process whereby the Commission administers the single level statewide sales tax program this Resolution authorizes the Commission to implement, administer and enforce the uniform remote sellers sales tax code on behalf of the City. In large part through the Alaska Municipal League's leadership, many municipalities in Alaska have come together to create this relatively complicated program from scratch in a very short period of time. If everything goes well, the City should see its first taxes collected and remitted in March . I do anticipate there will be more work to do, possible amendments to code and agreements , and there may be some administrative work at the local or Borough level. That said, your consideration of this Resolution is appreciated .