2000-06 Amending Title 3 Revenue/Finance - Transient Accommodations TaxKODIAK ISLAND BOROUGH
ORDINANCE NO. 2000 -06
Introduced by: Manager Jensen
Requested by: Finance Director
Drafted by: Finance Director
Introduced: 07/06/2000
Public Hearing: 07/20/2000
Postponed: 07/20/2000
Adopted: 12/07/2000
AN ORDINANCE AMENDING TITLE 3 REVENUE AND FINANCE
CHAPTER 3.30 TRANSIENT ACCOMMODATIONS TAX
OF THE KODIAK ISLAND BOROUGH CODE OF ORDINANCES
TO REFLECT NECESSARY CHANGES
WHEREAS, the existing Kodiak Island Borough Code of Ordinances chapter 3.30
grants exemptions to certain business entities offering transient persons lodging or
overnight accommodations; and
WHEREAS, the exemption creates a disparate and unique class of business operators
which violates the principal of fairness and equity with all other affected business
activities; and
WHEREAS, in fairness and equity the code should include all business operators when
any form of lodging or overnight accommodations are provided.
NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND
BOROUGH THAT:
Section 1: This ordinance is of a general and permanent nature and shall become a
part of the Kodiak Island Borough Code of Ordinances.
Section 2: Chapter 3.30 of the Kodiak Island Borough Code of Ordinances is
amended as follows:
3.30.010 Levy of sales tax. A sales tax of five (5) percent of the rental charge is
levied on all transient rentals for accommodations within the Kodiak Island Borough.
For all inclusive packages, a sales tax of five (5) percent will be levied on the amount
of the package that is for accommodations; this amount will be substantiated in
writing to the Borough for approval. If a business does not have an approved
substantiated rate, then the five (5) percent will be levied on fifty (50) percent of the
average daily rate of the package for each day of the stay. Any business may appeal
the decision of the finance director regarding the levy of this tax pursuant to
3.30.180(d) of this part.
Kodiak Island Borough, Alaska Ordinance No. 2000 -06
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3.30.040 General exemptions.
A. The following classes of rentals are exempt from the tax imposed by this
chapter:
1. Rentals to religious and charitable organizations as defined in subsections
501(c)(I), (3), and (4) of the Internal Revenue Code, for the conduct of regular religious
or charitable functions and activities, and not for the support or maintenance of the
general membership or for communal living;
2. Rentals to the United States, the State of Alaska, and any agencies or
political subdivisions thereof;
3. Rentals which the borough is prohibited from taxing by the constitution or
laws of the United States or the state of Alaska;
4
incidental part of their business but do not provide transient accommodations
separately as a business; i.e., fishing boat charters, guidc operations not based in a
lodge that also sells lodging, and similar services;
5. Rentals to nonprofit organizations operated primarily for the purpose of
planning, promoting, and conducting organized group activities for participants who
are eighteen (18) years of age or less; and
65. Rentals for accommodations located within a municipality which levies and
collects a sales tax on transient room rentals. No certificate is required for the
exemption provided by this subsection.
ccrtificatc.
3.30.080 : ' ' ' Operator's certificate of registration.
A. All persons engaged in selling or renting property subject to the tax imposed by
this chapter shall file an application for a certificate of registration not later than the
date of commencing business in the borough or opening a place of business within the
borough. An application for a new business not previously registered to collect sales
taxes shall be accompanied by a one hundred (100) dollar deposit, or, in the case of
a person who does not maintain a permanent place of business within the borough or
who is not a local resident residing within the Kodiak Island Borough, a two hundred
(200) dollar deposit which the registrant may recover by a deduction from the
remittance submitted with the first quarterly return filed or, if that return is insufficient,
the balance shall be refunded. If applicant has established credit with the borough, the
finance director may waive the required deposit.
B. Upon rcccipt of a properly executcd application, on a form provided by thc
financc dircctor, accompanicd by the required dcposit, thc finance dircctor shall issue
the applicant a ccrtificatc of registration, stating the address of the place of business
upon cessation of business at thc location named in thc certificate. If thc business
director for cancellation and thc successor organization shall apply for a new certificate
Kodiak Island Borough, Alaska
Ordinance No. 2000 -06
Page 2 of 8
of registration. Upon rcceipt of such application properly executcd, a new certificate
bcaring a ncw number will be issued to such successor.
D. Whcn there is a changc of address for the ccrtificatc holder's place of business,
a ncw ccrtificatc of registration is required, bearing the same registration number,
Showing the ncw address.
E. An applicant for a ncw ccrtificatc required to reflect a changc in business form
deposit with the application.
B. No person may engage in business as an operator without obtaining a certificate
of registration under this section. An operator shall display their certificate of
registration prominently at their registered place of business.
C. Application for a certificate of registration shall be made to the finance director.
If an operator engages in business as an operator at more than one (1) location, the
operator shall obtain a certificate of registration for each location. There shall be no
charge for issuing a certificate of regist ration.
D. A certificate of registration shall bear the name of the operator, the address of
the registered place of business, and state the operator's authority to collect the tax.
E. If an operator ceases to engage in business as an operator, ceases to engage in
business at their registered place of business, changes their name, or changes their
form of business organization, their certificate of registration shall expire. An operator
shall surrender an expired certificate of registration to the finance director for
cancellation.
3.30.082 Failure to obtain registration certificate.
A. It shall be unlawful for any person to engage in, or continue in, a business
which provides transient accommodations within the borough or to conduct activities
within the borough unless and until such person obtains a certificate of registration.
In the event the finance director ascertains that any such person is engaging in, or con-
tinuing in, business within the borough without a certificate of registration, one (1) or
more of the following remedies may be sought:
1. Conduct a special audit of such person's records and make a demand upon
such person to obtain a sales tax certificate, in which case such person who has
engaged in business or activities within the borough without a certificate shall pay a
special fee to reimburse the borough for the expense of the audit, which fee shall be
the lesser of the sum of one thousand (1,000) dollars or ten (10) percent of any tax
found to be due. However, the fee may be waived at the discretion of the finance
director for good cause shown. The finance director shall also assess any
delinquencies, and applicable penalties and interest, if any, against such person, if such
person engaged in rentals which were or are subject to the borough sales tax.
2. Report the facts to the borough attorney for appropriate action.
3.30.090 Addition of tax.
A. The tax collector shall add the tax imposed by this chapter to the rental charge,
showing the tax as a separate and distinct item. The tax imposed on more than one
Kodiak Island Borough, Alaska Ordinance No. 2000 -06
Page 3 of 8
(1) separate rental may be shown as a total tax on the aggregate price of all rentals
made at one time.
B. The tax to be collected and remitted may be determined by multiplying the gross
receipts from the services or product by .05 and dividing that product by 1 .05. In
cases of all- inclusive packages the tax may be determined by multiplying the approved
substantiated rate for accommodations by .05. If a rate has not been approved, then
the five (5) percent will be levied on fifty (50) percent of the average daily rate of the
package multiplied by the number of nights of accommodations provided.
3.30.120 Maximum taxable sale.
A. If the charge for rental of any property exceeds five hundred dollars ($500) for
a single transaction, that portion of the price or charge in excess of five hundred
dollars ($500) shall be exempt from the tax levied by this chapter.
B. In determining the maximum tax payable with regard to a single transaction for
rentals, each day shall be deemed a single transaction. The
3.30.140 Sales tax returns.
A. Each person who rents property taxable under this chapter in any quarter ending
March 31, June 30, September 30, and December 31 shall, on or before the last day
of the month following the end of each quarter year, or April 30, July 31, October 31,
and January 31 respectively, complete, sign, and file with the borough a return for that
quarter, upon forms furnished by the borough, setting forth the following:
1. The amount received from all rentals made within the borough;
2. The amount received from nontaxable rentals, with a brief explanation of the
nontaxable status;
3. The amount received from taxable rentals;
4. The amount of tax attributable to the taxable rentals;
5. The taxes collected; and
6. Such other information and supporting papers as the finance director may
require in the reporting form.
B. Businesses may be able to file two, (2) quarters together with the approval of
the finance director. The request must be made in writing to the finance director prior
to the first quarter in question.
BC. The taxes collected shall be remitted with the reporting form after deducting
any administrative fees that may be allowed by section 3.30.160.
OD. If the last day of the month is a Saturday, Sunday, or legal holiday, tax returns
and remittances shall be considered filed on time if delivered or postmarked on or
before the last day of that month.
DE. A person making rentals within the borough shall make a return, even though
none of the reported transactions are taxable.
EF. A person who fails to timely comply with the provisions of this chapter relating
to the filing of quarterly reports, or combined quarterly reports, and remittance of taxes
collected for any one (1), or two (2), quarter(s) during a calendar year shall have the
Kodiak Island Borough, Alaska Ordinance No. 2000 -06
Page 4 of 8
finance director prepare and file an estimated tax return on behalf of the person .'-f
chapter has been established. Monthly rcports and remittances 3haII be duc on the
fifteenth (15th) day of each month following thc month of collection. Any person
may, upon notification to thc finance dircctor, file rcports and transmit taxcs monthly.
1=G. A person doing business within the borough for a period of time that is expected
to be, less than six (6) months in duration shall, upon approval from the finance
director, file one (1) sales tax returns and remit taxes within fifteen (15) days of the
last day of business on a monthly basis as provided in subsection C of this section.
GH. A final sales tax return shall be filed and the tax due remitted within fifteen (15)
days after the date of selling or terminating a business. The purchaser of the business
shall withhold a portion of the purchase money sufficient to pay any sales tax,
penalties, and interest that may be due until seller displays a receipt from the borough
evidencing total payment of the tax, interest, and penalties due. If the purchaser fails
to withhold the required sum from the payment due to the seller, the purchaser shall
also be liable for the taxes, penalties, and interest owed by the seller to the borough.
3.30.230 Recovery of taxes. Taxes due but not paid may be recovered by the
borough in an action against the tenant if that person has failed or refused to pay the
tax on request by the seller or submitted a false certificate of exemption. Taxes
collected but not transited and taxes not requested or dcmandcd by thc person
charged with thc duty of collecting of tax may be recovered by an action against the
3.30.240 Lien for tax, interest, and penalty.
A. The tax, interest, and penalty imposed under this chapter and the lien filing fee
under subsection B of this section shall constitute a lien in favor of the borough upon
all real and personal property of every person required to collect and remit the tax.
The lien arises at the time of delinquency, one hundred and twenty (120) days
following: the due date of the tax return, and continues until liability for the tax is
satisfied or the property of the delinquent person is sold at foreclosure sales. The lien
has priority over all other liens and encumbrances except those for property taxes and
special assessments; provided, however, that the lien is not valid as against a person
in the position of a prior mortgagee, pledgee, or judgment creditor until notice of the
lien is filed in the office of the recorder for the Kodiak Recording District in the manner
provided for federal tax liens in AS 43.10.090 through 43.10.150 and the lien is not
valid against a purchaser who, prior to the recording of it, in good faith and without
actual notice of the lien or the underlying tax liability, has acquired for fair market
value an interest in property otherwise subject to the lien. Upon recordation a copy
of the lien shall be sent to the last known address of every person named in the lien.
Failure to comply with this requirement shall not, however, affect the validity of the
lien or the borough's right or authority to foreclose upon it.
B. Fees for the filing and releasing of liens authorized by this section shall be
established by resolution of the assembly.
Kodiak Island Borough, Alaska Ordinance No. 2000 -06
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3.30.280 Definitions.
A. As used in this chapter the foliowing definitions shall apply:
1. "Accommodations" mean a structure or portion of a structure which is
occupied or intended for occupancy by transients for dwelling, lodging, or sleeping
purposes. This term includes hotels, motels, tourist homes, houses or courts, lodges,
lodging houses, inns, rooming-houses, youth hostels, trailers, bed and breakfasts, 8f=14
dormitories, other ures. This term
does not include any hospital, medical clinic or nursing home.
2. "Buyer" or "purchaser" means a person who acquires an interest in real or
personal property, or the right to use real or personal property, or who acquires
services for consideration.
3. "Charitable organization" means an organization having as its primary
purpose relief of the poor and distressed or of the underprivileged.
4. "Rental" means permitting the use or occupancy of real or personal property
for consideration other than by means of a capital lease.
5. "Residential unit" means one or more rooms and a single kitchen in a
dwelling designed as a unit for occupancy by not more than one (1) family for living
or sleeping purposes.
6. "Residential uses" means for use within a residential unit.
7. "Sale" means a transfer or exchange of any property of every kind and
description, or the right to use or occupy such property, for consideration.
8. "Sales price" or "charge" means the consideration, whether money, credit,
or other property or interest in property, without deduction for delivery costs, taxes,
or any other expense. The receipt of property or an interest in property as
consideration, the "sales price" or "Charge" shall be based on the fair market value of
the property or interest in property.
9. "Seller" or "operator" means a person, whether acting as a principal, agent,
or broker, who sells, leases, or rents real or personal property or provides services to
another for consideration.
10. "Transient" means a person who occupies or rents and has available for the
person's own occupancy or occupancy by any other person
a hotel DlDtet type accommodation for feVVerthan thirty (30) consecutive days.
.
An employee who occupies or has available for fewer than thirty (30) days a suite,
room or rooms rented or leased for more than thirty (30) consecutive days by an
employer for use on a rotating basis by employees is not a transient.
Section 3: Sections 3.3[).(]45, 3.30.055, and 3.3[}.11(} of the Kodiak Island
Borough Code of Ordinances are hereby repealed:
value of the ronta|n included in any package sales which include othcr services such
o3 guiding or transportation.
Kodiak Island Borough, Alaska
Ordinance No. 2000-06
Page 6 of 8
A. A person sixty fivc (65) ycars of age- or oldcr who has resided in thc Kodiak
Island Borough for a continuous period of thirty (30) days or more may obtain a scnior
by the applicant undcr oath and shall contain information relating to the applicant's
submit for inspcction and copying a birth ccrtificatc, or othcr cvidcnce dctermincd by
valid for a period of three (3) ycars.
B. An exemption certificate issucd to a person who is prcvcntcd or impaircd from
personally making purchascs or paymcnts by o physical or mcntal infirmity may
designate not more than two (2) othcr persons who shall be authorizcd to utilizc the
ccrtificatc when making purchascs and paymcnts on bchalf of and for thc sole use and
bcnefit of thc ccrtificatc holdcr or thc ccrtificate holdcr's spouse.
acquire rentals that are to be utilized by o person or persons othcr than thc ccrtificatc
holdcr, thc ccrtificatc holder's spouse, a dcpcndent of the ccrtificatc holdcr, or anothcr
person or persons who would be qualified to have a scnior citizens excmption
Lcrtificatc issucd to thcm undcr this scction. As used in this scction, "dcpendcnt"
mcans a child of the certificatc holdcr or thc ccrtificatc holdcr's spousc who rcsidcs
with the ccrtificatc holdcr whcn not attcnding school and who rcceivcs more than
one half (' /�) of his or her support from thc ccrtificate holdcr.
1. Notwithstanding any othcr provisions of this choptcr no person may utilize
a scnior citizcn tax cxcmption ccrtificate to rcnt a room which will be used in a
commercial busincss or cntcrprisc or for the production of income.
2. Persons making rcntols to or for thc benefit of o scnior citizcn which are
exempt from tax undcr thc provisions of this scction shall confirm thc identity of the
ccrtificate to the borough finance dircctor. The finoncc dircctor shall investigotc the
investigation as is determined ncccssary and prcscnt the facts to the assembly for
authorization to initiate prosecution or revocation action, or both.
3. Scnior citizens' cxcmption ccrtificatcs shall be subjcct to rcvocation as
providcd in scction 3.30.070 of this chapter.
Kodiak Island Borough, Alaska
Ordinance No. 2000 -06
Page 7 of 8
3.30.110 Tax schedule. The amount of the tax to bc addcd to the rcntal chargc for
transient room rcntals shall bc dctermincd in accordancc with the following schcdulc:
Section 4: This ordinance shall become effective at midnight on December 31, 2000.
Undcr 5 ccnts
$.05 through $.17
.18 through .30
.31 through .50
.51 through .89
.90 through 1.03
ATTEST:
l ax
None
$.01
. 02
. 03
.04
.05
ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
THIS SEVENTH DAY OF DECEMBER, 2000
4s .9
Judith A. Nielsen, cMc, Boro gh Clerk
KODIAK ISLAND :OROUGH
L. Stevens, Mayor
Kodiak Island Borough, Alaska Ordinance No. 2000 -06
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