1987-04 Amending the KIB Code By Adding Chapter 3.26 Sales TaxKODIAK ISLAND BOROUGH %
ORDINANCE N0. 87 -04-0
AN ORDINANCE OF THE KODIAK ISLAND BOROUGH AMENDING THE KODIA SLAND
BOROUGH CODE BY ADDING CHAPTER 3.26 SALES TAX PROVIDING FOR THE LEVYUNG AND
COLLECTION OF A SALES TAX AND PENALTIES FOR FAILURE TO COLLECT.
WHEREAS, the State of Alaska Is projecting large reductidns in state
funding for Kodiak Island programs such as education, municipal a4sistance and
revenue sharing, and
WHEREAS, the Kodiak Island Borough is responsible fp4 more than 328
million of programs in education, health and general proycami, and
•
WHEREAS, about 320 million of the revenue ta4aspOort these programs
has come from the State of Alaska while about 31.6 millioa is collected 1-
. local property tax from Kodiak Island Borough real a rsonal property
owners, and
WHEREAS. it is the desire of the Assembly to determine if the Kodiak
Island Borough voters would prefer to spread the anticipated tax increases
across more people with a sales tax or contin &go /raise all tax revenue from
property owners only, and /
WHEREAS, the ordinance setting a date for the voters to ratify or
defeat the levy of a sales tax has been in1.Aa(uced.
NOW, THEREFORE, BE IT ORDAINED y the Kodiak Island Borough Assembly
1
that
Section I: This ordinance /Of a permanent and general nature and
shall become a part of the Code of Ocdynances.
Section 2: A new chap e-„ 3.26, Sales Tax, is hereby enacted
Section 3: This or 4 e becomes effective on July 1, 1987 if
passed by a majority of the voters voting on the question at a special
election.
PASSED AND APPROVED /this day of
1987.
KODIAK ISLAND BOROUGH
j,
ATTEST:
By
Borol4h Clerk
By
By
Borough Mayor
Presiding Officer
Firs Reading, Approval Date:
Sec nd Reading, Public Hearing, Approval Date:
Ad ption Date:
E fective Date: July 1. 1987
Section
CHAPTER 3.26
SALES TAX
3.26.010 Definitions
3.26.020 Levy of sales tax
3.26.030 General exemptions
3.36.040 Exemption of sales for resale
3.26.050 Senior citizens exemption
3.26.060 Certificate of exemption
3.26.070 Revocation of certificate of exemption
3.26.080 Installment payments
3.26.090 Accrual and collection
3.26.100 Allocation of sales tax proceeds
3.26.110 Tax collectors -- registration certificate
3.26.120 Failure to obtain registration certificate
3.26.130 Addition of tax
3.26.140 Assumption of lax prohibited
3.26.150 Tax schedule
3.26.160 Maximum taxable sale
3.26.170 Title to tax proceeds
3.26.180 Sales tax returns
3.26.190 Credit for taxes
3.26.200 Administrative costs and reimbursements
3.26.210 Penalty and interest
3.26.220 Determination of exemptions
3.26.230 Failure to collect taxes
3.26.240 Preservation of records -- collection of arrears tax
3.26.250 Failure to file return -- estimated tax
3.26.260 Returns confidential
3.26.270 Corrections of errors on tax returns
3.26.280 Refund of overpayment
3.26.290 Recovery of taxes
3.26.300 Lien to secure payment of tax
3.26.310 Foreclosure against real property
3.26.320 Collection by distraint and sale
3.26.330 Prohibited acts and penalties
3.26.340 Three year voter review
1 26.010 Defi ni tiong. As used in this chapter the following deli nil ions
shall apply:
(a) "Buyer" or "purchase" 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.
(b) "Charitable organization" means an organization having as its
primary purpose relief of the poor and distressed or of the underprivileged.
(c) "Finance director" means the tax collector of the Kodiak Island
Borough or an authorized agent of the Borough.
(d) "Rental" means permitting the use or occupancy of real or personal
property for consideration.
(e) "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 family tor
living or sleeping purposes.
(f) "Residential uses" means for use within a residential unit.
(9) "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.
(h) "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 market value of the property or interest in property.
(i) "Seller" 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.
1 28.020 Levy of sales tax. (a) A sales tax of one (I) percent of the sales
price or charge is levied on all sales, rentals. and services made within the
borough.
(b) For purposes of the tax levied by this section, a sale of tangible
personal property is made within the borough if:
1. The sale le made by a business located within the borough and
delivery occurs within the borough;
2. The sale is made by a business located within the borough, the
order is received or solicited within the borough or payment is received
within the borough, and delivery i5 made to a purchase within the Kodiak
Island borough; or
3. The sale is made by a business located outside of the borough as
a result of solicitation inside of the borough and payment or delivery occurs
within the borough.
(c) For the purposes of the tax levied by this section. services are
made within the borough if, regardless of the location of the business
rendering the services:
I. The services. or any essential or substantial part thereof. are
rendered within the borough, or
2. The order for the services is solicited or received within the
borough or payment is received within the borough, the services are rendered
by a business maintaining an office. agent, or employee within the borough,
and the services benefit or directly relate to any person, property, or
organization within the borough.
(d) The sales tax on rentals is applicable for all real property located
within the borough and to rentals of personal property from a business within
the borough and from a business located outside the borough under
circumstances which authorize the imposition of a sales tax were the property
to have been sold rather than rented.
3.98.030 General exemptions. The following classes of sales, rentals, and
services are exempt for the tax imposed by this chapter:
(a) Casual and isolated sales and rentals of personal property, and
services not rendered in the regular course of business of the seller.
(b) Medical services performed by licensed medical doctors, dentists.
osteopaths, optometrists, psychiatrists. psychologists, and chiropractors:
sates of medicinal preparations and drugs prescribed by medical doctors, and
' hospital services.
(c) Sales, rentals, and services to religious and charitable
organizations as defined in subsections 501(c)(I), (3). and (s) 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.
(d) Sales of food in school cafeterias and lunchrooms that are operated
primarily for students.
(e) Sales and services by non profit schools and student organizations
within schools for support of the school, organization, or extracurricular
activities or events.
(f) Sales rentals, and services to the United States, the state of
Alaska, and any agencies or political subdivisions thereof.
(g) Dues or fees to clubs, labor unions, and fraternal organizations.
(h) Subscriptions to newspapers and periodicals.
(i) Sales of animal food, seed, plants, and fertilizers to farmers or
ranchers for farm use.
(j) Sales of insurance and bonds of guaranty and fidelity.
(k) Funeral charges.
(1) Transportation charges of commercial airlines, steamship companies,
or air or boat charter operations.
(m) Services rendered by banking or savings and loan institutions or
credit unions.
(n) Services rendered by an employee to an employer in the normal course
of employment.
(o) Sales, rentals, and services which the borough i5 prohibited from
taxing by the constitution or laws of the United States of the state of
Alaska.
(p) Retail sales in dining rooms or cafeterias of food furnished by
nonprofit organizations under programs wholly or partially supported by
government funds.
(q) Nursery and babysi tting services.
(r) Long distance transmission of telephone and telegraph messages.
(s) Sales of heating fuel exclusively for residential uses (not to
include fuel used in or on watercraft).
(t) Sales of electrical service to exclusively residential units.
(u) Sales of propane gas exclusively for residential uses (e.g..
cooking, water heating, heating, clothes drying).
(v) Sale of fuel used in stationary power plants that generate
electrical energy exclusively for private residential consumption.
(wl Sales, rentals, and services to nonprofit associations or
organizations operated primarily for the purpose of planning, promoting, and
conducting organized group activities for participants who are 18 years of age
or less.
(x) Charges for garbage /refuse collection for garbage /refuse generated
exclusively by residential use
(y) Sales of water and sewer utility services by a governmental unit.
(z) Rentals and services of ports and harbor facilities owned and
operated by a government unit.
. 26 040 Exemption of sales for resale. The following sales of property and
services are exempt for the sales tax:
(a) Sales of property to wholesale dealers located in the borough who
deal in property of the type sold, for the purpose of a subsequent sale by
such dealer in the borough.
(b) Sales to retail dealers located in the borough, who deal in property
of the type sold, for the purpose of a subsequent retail sale by such dealer
in the borough, which sale will be subject to the tax imposed by this chapter.
Col Sales of tangible personal property to a person engaged in
manufacturing within the borough of products sold primarily within the
borough, which property is converted into or becomes an ingredient or
component part of the manufactured product or a container therefor. or
otherwise enters directly into the manufacturing process.
(dl Sales to a building or construction contractor or subcontractor, for
use on a project within the borough of building materials. supplies, and other
tangible personal property to be incorporated or use as component parts of a
completed structure, driveway, landscaping, and other portions of the project
and services utilized directly in the construction, erection, landscaping, and
similar work on the project. This exemption shall not apply to tools,
equipment, fuel, clothing, food, and similar items of property utilized out
not incorporated Into a project.
3 26.050 Senior citizens exemption. (al A person sixty -five years of age or
older who has resided in the Kodiak Island borough for a continuous period of
30 days or more may obtain a senior citizens sales tax exemption certificate
by submitting a completed application to the finance director on a form
provided by the borough. The application must be signed by the applicant
under oath and shall contain information relating to the applicant's
residence. marital status, rental or ownership of occupied dwelling. persons
occupying the dwelling, and other information reasonable necessary to
determine the applicant's eligibility and monitor the use of the exemption
certificate. The applicant shall also submit for inspection and copying a
birth certificate, or other evidence determined by the finance director to be
adequate, to establish the applicant's age unless the applicant has previously
established eligibility through the assessor's office for senior citizen
property exemption. The exemption certificate shall be issued without charge
in the name of the applicant and shall be valid for a period of 3 years.
(bl An exemption certificate issued to a person who is prevented or
impaired from personally making purchases or payments by a physical or mental
infirmity may designate not more than two other persons who shall be
authorized to utilize the certificate when making purchases and payments on
behalf of and for the sole use and benefit of the certificate holder or the
certificate holder's spouse.
(el No person may utilize a senior citizen tax exemption certificate to
purchase or acquire property or rentals that are to be consumed or utilized by
a person or persons other than the certificate holder, the certificate
holder's spouse, a dependent of the certificate holder. or another person or
persons who would be qualified to have a senior citizens exemption certificate
issued to them under this section. As used in this section, "dependent" means
a child of the certificate holder or the certificate holder's spouse who
resides with the certificate holder when not attending school and who receives
more than one -half of his or her support from the certificate holder.
(d) Persons making sales or rentals to or for the benefit of a senior
citizen which are exempt from tax under the provisions of this section shall
confirm the identity of the person or persona presenting an exemption
certificate, if not personally known to them, by requesting identification and
shall maintain records of each such exempt sale with an appropriate reference
to the senior citizen exemption certificate number. If the person making the
sale or rental has reason to believe that it is not for use or consumption of
a senior citizen or other qualified user, because of the volume, type of
purchase. or other facts, that person shall promptly report the possible
fraudulent use of the exemption certificate to the borough finance director.
The finance director shall investigate the sale or sales, and if the finance
director determi nee that the exemption certificate is being abused, the matter
shall be referred to the borough mayor who shall conduct such further
investigation as is determined necessary and present the facts to the assembly
for authorization to initiate prosecution or revocation action, or both.
(e) Senior citizens' exemption certificates shall be subject to
revocation as provided in section 3.26.070 of this chapter.
3.26.060 Certificate of exemption. (a) A person entitled to the exemption
under section 3.26.035 or subsections (c), CO or (w) of section 3.26.030
shall apply to the borough for a certificate of tax exemption which will be
issued, without charge, to qualified persons. The application shall be
submitted on a form provided by the finance director and shall contain the
name, address, typed of organization, the section under which the exemption Is
claimed, and such other information as is required by the finance director.
Duplicate certificates will be issued on request.
(b) A construction contractor or subcontractor requesting exemption
under subsection (d) of section 3.26.035 must apply to the borough for a
certificate of tax exemption which will be issued, without charge, to
qualified licensed contractors or subcontractors. The exemption shall be
valid for a period of one year, at the end of which an accounting of the use
of the exemption shall be made to the finance director reflecting each
building project and the correct location of the project by legal description
and any other commonly recognized address from which services, materials,
supplies, or other property are purchased or obtained.
(c) The certificates of exemption shall be valid for a period of one
year and the expiration date shall be printed on the fact of the certificate.
Exemption certificates may be renewed annually, without charge, by completing
an application form containing information required to assess the continued
existence of the exemption.
3.26.070 Revocation of certificate of exemption. (a) A certificate of tax
exemption may be revoked by the borough mayor for any of the following acts or
omissions:
1. Falsification of any statement or information in the application
for certificate of exemption;
2. Utilization of the tax- exempt certificate for the purchase or
acquisition of nonexempt property, rentals, or services;
3. Knowingly or negligently permitting or authorizing the use of
the certificate by a person other than an authorized agent or employee of the
person or entity to whom the certificate was issued.
(b) Prior to revocation of a certificate, the holder of the certificate
shall be provided with notice of the alleged violation not less than ten days
prior to the proposed effective date for revocation of the exemption
certificate. The person or entity to whom the certificate was issued may
request a hearing before the borough mayor regarding the alleged violation by
filing a written request with the finance director prior to the effective date
for revocation. If requested, the hearing shall be held within twenty days
after the date of receipt of the request, and the exemption certificate shall
not be revoked prior to the date of hearing.
(c) A decision of the borough mayor revoking an exemption certificate
may be appealed to the assembly by filing a written notice of appeal with the
finance director within ten days after receipt of the decision. The hearing
on the appeal shall be scheduled before the assembly at a regular or special
meeting held within thirty days after receipt of the notice of appeal. The
assembly may, in its discretion, hear the matter either on the record or de
novo. If the appeal is heard de novo, no evidence may be presented before the
assembly which was not presented before the borough mayor.
(d) If an exemption certificate is revoked, a new certificate may not be
issued to the same person or entity for a period of two years from the date of
revocation.
(e) The revocation provided by this section is in addition to any other
penalties provided by law for the violations.
} 26.080 Installment payments. When the payments for a purchase, rental, or
service are made on an installment basis. the entire sales tax should be
collected from the down payment, or, if a down payment is not made or is
I
I
Insufficient to pay the tax, then the entire first installment payment or
payments until the tax is paid.
II n 26 090 an.. n Ile t
1 and payable by the buyer at ales taxes imposed by this chapter ar,
runt al and are t h e buyer at
not the time payment for the °
purchase, service, or
rentals or rendering services that arrew taxable under this chapter shall
! Every person making sales or
I collect the taxes from the purchaser at the time of the sale, rental, or
service or, with respect to credit transactions, at the time of collection of
the sale price, rental, or service fee and shall transmit the money collected
on a quarterly basis to the borough.
3 . 26 .100 Alloc ac ti ^of ssal s t
sales taxes collected under this hallo be allocated r
to support of the
' Kodiak Island Borough school district.
3 28.110 Ta ollector --
n selling or renting traf t r 9 property or rendering services subject to the tax
imposed by this chapter not currently registered with the Kodiak Island
Borough shall file an application for -a certificate of registration with the
borough finance director not later than May 15, 1987, or the date of
commencing business in the borough, or opening of a place of business in the
borough, whichever first occurs. An application for a new business not
Previously registered to collect sales taxes shall be accompanied by a one
hundred 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 an a
established credit with the borough, the finance director may waive the
required deposit. PpliCdnl has
( bl Upon receipt of a properly executed application, on a form provided
by the finance director, accompanied by the required deposit, the finance
officer shall issue the applicant a certificate of registration, stating the
address of the place of business to which it is applicable and authorizing
such person to collect the sales tax. The certificate shall be prominently
displayed at the place of business named on the certificate or, it there is r
regular place of business, the certificate shall be attached to the stand
truck, or other merchandising or service device.
Col The certificate of registration is nonas$Ignable and
or n ontransferable, and must be surrendered to the finance director by the person
entity
' namedi fl the cerrtificate.ss led the businessaois continued at the same location
but there is a change in its business form, the certificate holder mak,ng sole
Change shall surrender the old certificate to the finance director or
cancellation and the successor organization shall apply for a new certit
of registration. Upon receipt of such application
certificate bearin .ate
g a new number well be issued to such asuccessor tea, a new
CO) When there is a change of address for the certificate holder's
of business, a new certificate of registration as required, bearing ;he same
registration number, showing the new address. J•a,e
(el An applicant for a new certificate required to reflect a change
business form or a change of address for an existing certificate holder ,s ,
required to post a deposit with the application.
J�28 12 l s to ohs,. re in
a e in fia o , f It snail be un.awa
for any person to en Or business ithin the conduct activities within the o borough pother than casual or occasiona r sa es c
unless and until such person obtains a certificate of registration In 're
event the finance director ascertains that any es.
continuing in, business within the borough, other than casual or goccasiona,
sales. without a certificate of registration, one or more of the following
remedies may be sought:
(al Conduct a special audit of such person's records and make a demand
upon such person to obtain a sales tax certificate, an which case such
who has engaged in business or activities within the borough without a
certificate shall per ,,,�
Day 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 doI
: or ten percent of any tax found to be due. However, the tee may be waived al
the di ac ration of the finance director for good ds ars
.
director shall also assess any applicable shown. penalties finance
es
interest, if an against h person. if delinquencies. and suds person
engaged p in sales es and
other transactions which were or person.
subject to the borough sales tax.
or
( b) Report the facts to the borough attorney for appropriate action
3.26 130 Addition of tax. (a) The tax collector shall add the tax imposed
by this chapter to the price or charge, showing the tax as a separate and
distinct item. The tax imposed on the sale of more than one separately priced
item may be shown as a total tax on the aggregate price of all items purchaaed
and delivered at one time. Tax levied by a city shall also be added to the
price as required by the applicable city code.
(b) The owner or other person providing products or services through a
coin - operated vending or amusement machine shall collect the tax levied by
this chapter and may include that tax in the fee charged to operate the
machine. The allocation of the payment required to operate the machine.
between the purchase price and sales tax, shall be explained by notice or
marking on the device.
(c) A business selling gasoline or diesel fuel delivered to the
customer's vehicle in bulk may include the sales tax as an extra charge in the
metered price for the fuel if a notice is posted on the meter or pump, or
otherwise prominently displayed. explaining the allocation of the total cost
between the charge for the fuel and the sales tax.
(d) A business engaged in the sale of beverages for consumption on the
premises may, in lieu of adding the tax as a separate item, include the tax
imposed by this section in the price for the beverage. A notice shall be
prominently displayed in the establishment dispensing the beverages explaining
the allocation of the total price between the charge for the beverage and the
sales tax collected.
(e) A business providing for -hire passenger vehicle transportation
services may, in lieu of adding the tax as a separate item, include the tax
imposed by this chapter in the charge for the transportation. A notice shalt
be prominently displayed in each for -hire passenger vehicle explaining the
allocation of the total charge between transportation charges and the sales
tax collected.
(f) When authorized by this section to be included in the price or
charge for a product or service, the tax to be collected and remitted shall be
determined by multiplying the gross receipts from the services or product by
.05 and dividing that product by 1.05. Notices required by this section shall
be provided by the borough.
3.26.140 Assumption of tax prohibited. No person may advertise or state to
the public, or to any buyer, tenant, or consumer of property or services,
directly or indirectly that the tax imposed by this chapter or any part
thereof will be assumed or absorbed by that person, or that it will not be
added to the sale! price or charge, or that it will be refunded; nor may any
person assume, absorb, or fail to separately state the tax to the buyer.
tenant, or consumer, unless otherwise specifically authorized by this chapter.
3 26 150 Tax schedule. The amount of tax to be added to the purchase prices,
rental, or service charge shall be determined in accordance with the following
schedule in addition to any sales tax levied by a city where the sale is
occur ing:
6 p Tax
Under 49 cents None
$ .50 through t1. 49 i 01
1.50 through 2.49 .02
2.50 through 3.49 .03
3.50 and over Continue as same scale.
3.26.160 Maximum taxable sale. (a) If the sales price of an item or items
or the charge for rental of any property or performance of any service exceeds
five hundred dollars for a single transaction, that portion of the price or
charge in excess of five hundred dollars shall be exempt from the tax levied
by this chapter.
(b) In determining the maximum tax payable with regard to a single
transaction for the rendering of services on a substantially regular basis,
which services are generally repetitive in nature and are to be performed over
a period of time under a contract. each period of payment or partial payment
under the contract shall be deemed a separate service transaction. The
maximum tax payable shall be applicable to each deemed service transaction
with tax payments to accrue and become payable at the time of filing the next
quarterly return to be submitted following receipt of payment for the service.
(c) For purposes of computing the maximum tax, a rental of property for
a period in excess of one month shall be deemed as a series of rentals with
each rental transaction terminating as a rental payment is made. The maximum
sales tax payable shall be applicable to each deemed rental with tax payments
to accrue and become payable at the time of filing the next quarterly return
to be submitted following receipt of the rental.
3 26 170 Title to tax proceeds. The title to the taxes collected pursuant
this chapter shall vest in the borough upon collection by the tax collector.
Title to taxes collected on behalf of any city within the Kodiak Island
Borough shall vest in each respective city upon collection by the finance
director. Cities within the Kodiak Island Borough may be authorized to
continue to collect their own sales tax so described in their cods if the
finance director determines such an authorization to be in the best interest
of the city and the Kodiak Island Borough.
x.26 180 Sales tax returns. Cal Each person who sells or rents property or
renders services 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 sales, rentals, and services made
or rendered within the borough;
2. The amount received from nontaxable sales, rentals, and
services, with a brief explanation of the nontaxable status;
3. The amount received from taxable sales, rentals, and services;
4. The amount of tax attributable to the taxable sales, rentals,
and services;
S. The taxes collected;
6. A listing of rental pr ope r t y(iesl by street address showing the
total number of units and the number of units rented for each month of the
reporting period; and
7. Such other information and supporting papers as the assembly may
require in the reporting form.
Cb) The taxes collected shall be remitted with the reporting form after
deducting any administrative fees that may be allowed by section 3.26.200.
Col 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_
(d) A person making sales or rentals or rendering services within the
borough shall make a return, even though none of the reported transactions are
taxable, unless the person is a licensed medical doctor, dentist, osteopath.
optometrist. chiropractor, hospital, religious or charitable organization. or
club, or a labor union.
(el A person who fails to timely comply with the provisions of this
chapter relating to the filing of quarterly reports and remittance of taxes
collected for any one quarter during a calendar year shall, if required by
written notice from the finance director, file -the required reports and
transmit collected sales taxes monthly until such time as the finance director
determines that a willingness and ability to comply with the requirements of
this chapter has been established. Monthly reports and remittances shall be
due on the last day of each month following the month of collection. Any
person may, upon notification to the finance director, file reports and
transmit taxes monthly.
(fl A person doing business within the borough for a period of time that
' is, or can reasonably expected to be, less than six months in duration shall
file sales tax returns and remit taxes on a monthly basis as provided in
subsection (el of this section.
(gl A final sales tax return shall be filed and the tax due remitted
within fifteen 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
lax, interest, and penalties due. If the purchaser fails to withhold the
required sum from the payment due to the seller, the purchase shall also be
liable for the taxes, penalties, and interest owed by the seller to the
ibor ough.
1,28.190 Credit for taxes. A person who has collected and remitted a tax o
- a sale, which tax is subsequently determined not to be due because of refun
is granted for returned merchandise, payment is refused on a check received
'conjunction with a sale, or similar circumstances. may take a credit against
future taxes. Proper documentation shall be made available by the tax
collector, on request, to substantiate the credit taken.
3 26.200 Administrative costs and reimbursements. To compensate sellers,
renters, and persons rendering services for keeping the sales tax records and
filing returns as required by this chapter and making prompt remittances.
those persons shall be entitled to a fee equal to two percent of the amount of
the tax collected, and that amount may be deducted when making remittances;
provided that the reports and remittances ars received on or before the due
date for such reports and remittances. A person filing a report or remitting
taxes collected after the due date forfeits the right and claim to the fee
provided by this section and shall remit the entire tax due.
3.28.210 Penalty and interest. fa) A person who fails to remit taxes
collected on or before the due date shall pay. in addition to the tax due, a
penalty of five percent of the tax that is then due and unpaid for each month
or any fraction of a month during which any part of the tax remains unpaid
until a total penalty of twenty percent has accrued. which penalty shall be
added to all returns until the tax, penalty, and interest have been paid. For
the purposes of this section, petite! payments shall be credited first to
,penalty and interest and then to the tax obligation originally due.
fb) Taxes that are not remitted to the borough when due shall draw
interest from the date of delinquency until paid at the rate of fifteen
percent per year. Interest shall not accrue on the late payment penalty
assessed by subsection (a) of this section, but shall accrue on the civil
penalty assessed by section 3.26.230.
3.26.220 Determination of exemptions. (a) Every sale of property or service
and every rental made within the borough or rendered or received by a person
within the borough, unless explicitly exempted by ordinance, is presumed to be
subject to the tax imposed by this chapter.
(b) A purchaser, tenant, or other person obtaining property or service
who claims an exemption under a provision of this chapter for which a
certificate of exemption is required shall display the certificate at the time
of the purchase or rental and the certificate number shall be noted on the
receipt, invoice, or other evidence of the transaction.
fc) A purchaser, tenant, or other person obtaining property or services
who believes the tax has been charged in error may make a claim to the borough
for refund within thirty days alter the date of sale.
((I) If the finance director denies a refund of the tax, the taxpayer may
appeal to the borough mayor by filing a written notice of appeal, within ten
days after the finance director's decision, setting forth all facts relating
to the claimed exemption. The borough mayor shall provide an opportunity for
a hearing within thirty days after the receipt of the notice appeal.
3 28.230 Failure to collect taxes. (a) A person required by this chapter to
collect sales taxes levied, who fails to collect such taxes on taxable
'transactions, shall be assessed with a civil penalty of double the tax that
should have been collected, as determined by an audit.
(b) If any of the following defenses are established, the civil penalty
imposed by this section shall be waived:
1. The securing, in good faith, of a certificate of exemption or a
statement of eligibility for exemption from the person against whom the tax
. ,would have been levied;
2. Proof of a belief, based upon advice of legal counsel or the
borough finance director, that the sale, rental. or rendering of service was
not subject to the tax levied by this chapter, accompanied by proof of
notification in writing to the borough mayor based on such belief prior to or
iimmediately following the transaction;
3. A reasonable attempt, in good faith, to collect the tax from the
buyer.
fc) A purchaser, renter, or other person obtaining property or services
i who falls to pay the tax levied by this chapter on a taxable transaction shall
the assessed with a civil penalty of double the taxes that should have been
paid.
(d) The civil penalties imposed by this section shall be in addition to
any other civil or criminal penalties imposed by this chapter.
3.26 240 Preservation of records collection of arrears tax. fa) Every
person required by this chapter to collect and remit taxes shall keep and
preserve suitable records of the gross sales, rentals, or service receipts,
together with bills of sale and other pertinent records and documents which
may be necessary to determine the amount of the tax due under this chapter and
to substantiate the information provided in filed returns. The records
, to be maintained shall be preserved for three years alter the
remittance of the taxes and shall be subject to examination by the borough
finance director or any other authorized employee of the borough while engaged.
in reviewing or auditing the records of any taxpayer required to make a rat
under the provision so this chapter. The borough shall give written notice
intent to conduct an audit under this section not less than five days prior to -
the audit.
(b) Collection of arrears tax by the borough shall be limited to the
period of three years prior to the date when the finance director or
authorized agent began an audit of the taxpayer's records, wrote to the person
through use of regular mail concerning an apparent violation of this chapter,
or took some other recorded action to require a certificate of registration or
other compliance with this chapter.
3 26 250 Failure to file return -- estimated tax. If the borough is unable to
ascertain the correct tax to be paid by a seller because of the failure or
refusal of the seller to file a return, keep accurate records, or allow their
inspection, or because a return has been falsified, the borough may prepare an
estimate of the tax due based on any information that may be available.
Notice of the estimated tax shall be provided to the seller and shall become
final for the purpose of establishing the tax liability unless the seller,
within thirty days after receipt of notice of the estimated tax, files an
accurate return supported by records determined by the finance director to be
satisfactory. establishing a lesser liability.
3.26.260 Returns confidential. Except in connection with official
investigations or proceedings of the borough, whether judicial or
administrative, involving taxes due under this chapter. no officer, employee,
. or agent of the borough may divulge any information disclosed in a report or
return filed under this chapter. The prohibition of this section shall not
prohibit the preparation and use of statistical summaries of sales tax data
that do not disclose the identity of any person filing reports required by
this chapter.
1 26.170 Corrections of errors on tax returns. If the taxpayer makes an
error or errors in computing the lax on a return, the finance director or
authorized agent shall correct such error or errors and immediately notify
person filing the return by ordinary mail that such correction has been made.
Any additional tax due, together with applicable penalty and interest in
accordance with section 1.26.210, for which the taxpayer becomes liable shall
be payable immediately by the taxpayer. If the taxpayer makes an error which
results in overpayment of tax, the finance director shall allow credit against
taxes due on future returns, or shall authorize a refund in accordance with
section 3.26.260.
3 26 280 Refund of overpayment. The finance director shall refund
overpayment of taxes brought about by mathematical errors in the return or
reports filed by the person remitting the tax; computational errors made by
the remitter or borough personnel with respect to said return or reports;
duplicate payments by remitter; or any overpayments made by a person filing a
: tax return that may be determined as a result of an audit of such person's
records: provided, however. that in no event shall the remitter of sales taxes
be entitled to a refund for overpayment of sales taxes where the overpaid
taxes have actually been collected by said person. In the event the amount of
overpayment is one hundred dollars or less a cash refund may be authorized at
1 the discretion of the finance director. In no event shall there be a refund
for overpayments that were made more than three years prior to the discovery
of the overpayment by the person filing the returns or the finance director or
authorized agent.
'! 3 26 290 Recovery of taxes. Taxes due but not paid may be recovered by the
borough in an action against the buyer, tenant, or recipient of services 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
transmitted and taxes not requested or demanded by the person charged with the
. duty of collecting of tax may be recovered by an action against the person
selling or renting the property or services.
3 26 300 Lien to secure Payment of tax,. (a) The tax imposed by this
chapter, together with any penalty and interest that may accrue, shall
constitute • lien in favor of the borough upon all of the property. real and
personal, and any interest in such property owned or held by the person or
persons required to pay the tax. The lien arises at the time of delinquency
and continues for a period of two years from the date of notice to the borough
of the delinquency unless an action is initiated during that period to
foreclose the lien or the lien is satisfied by distraint and sale.
(b) The date of notice to the borough of delinquency shall be the first
Of the following events to Occur:
1. A required return is filed accurately reflecting the tax due and
the return is not accompanied by the required remittance.;
2. A notice of estimated tax is provided to a person by the borough
and the thirty day period for filing an accurate return has expired.
(c) The lien created by this section is not valid against a mortgagee,
deed of trust beneficiary, or other person holding a lien or security interest
in the property, or a purchaser or judgment creditor, who acquires an interest
in the property prior to filing by the borough of a notice of lien in the
office of the Kodiak district recorder.
3.26.310 Foreclosure eaainst real property. A lien for the tax, interest,
and penalties created by this chapter may be foreclosed, when authorized by
the assembly, by commencement of an action in the superior court pursuant to
the procedure set forth in AS 09.45.170 -220.
3 26.320 Collection by distraint and sale. (al The borough may collect
taxes, with interest, penalties, and other additional amounts permitted by
law, by distraint and sale of the property of the person liable to pay the
taxes, interest, penalty or other additional amount, who neglects or refuses
to pay them within ten days after receipt of notice and demand for payment.
(b) In case of neglect or refusal to pay taxes or deficiencies as
provided in this section, the finance director may issue a warrant authorizing
any police officer to levy upon, seize, and sell any property, except exempt
property, belonging to the person for the payment of the amount due, with
interest and penalty. When distraint is made as provided in this section, the
police officer charged with the services shall make an inventory of the
property served and leave a signed copy of that inventory with the owner or
possessor of the property, or at the dwelling or usual place of business. If a
person of suitable age and discretion can be found, or if the taxpayer is a
corporation or other type of organization with an officer, manager, general
agent, or agent for process, with a notation of the amount demanded and the
time and place of sale.
(c) The police officer shall immediately publish a notice of the time
and place of sale at public auction, together with a description of tne
property distrained, in a newspaper published in the borough and post a copy
of the notice at the post office nearest the place where the sale Is ;o oe
made.
(d) The time of sale shall be not less Than lifteen or more than s..ty
days from the date of the notification to the owner or possessor of tne
property, and the plate proposed for the sale shall not be more than five
miles from the place of making the distraint. The sate may be continued from
time to time in the discretion of the police officer, but not for more :Nan
thirty days alter the date specified in the notice.
(e) The property distrained shall be restored to the owner or possessor
if, before the sale. payment of the amount due is made to the police officer
charged with the collection, together with the fees and other charges
(f) The police officer conducting the sale under this section snal• give
to the purchaser a certificate of sale on payment in full of the purchase
price. The certificate of sale:
1. Is prima facie evidence of the right of the police officer to
make the sale, and conclusive evidence of the regularity of the officer's
proceedings in making the sale;
2. Transfers to the purchaser all right, title, and interest or the
delinquent in and to the property sold;
3. Where the property consists of stock, is notice, when received.
to the corporation to record the transfer on their books and records in the
same manner es if the stock were transferred or assigned by the party hoid,ng
the stock in lieu of an original or prior certificate, which is void, whether
cancelled or not; and
4. Where the subject of the sale is security or other evidence of
debt, is a good and valid receipt to the person holding it. as against a
person holding or claiming to hold possession of the security or other
evidence of debt.
CO If property seized and sold is not sufficient to satisfy the ciaim
of the borough for which distraint or seizure is made. the police officer may,
thereafter, and as often as is necessary, proceed to seize and sell in !,ke
manner any other property subject to the lien created by this chapter until
the amount due from the taxpayer together with all expenses is fully paid.
(h) A person in possession or control of property subject to distraint,
upon which • levy is made, shall, upon demand by the police officer making th .
levy, surrender the property to the police officer, unless the property is, at
the time of the demand, subject to an attachment under judicial process. A
person who fails or refuses to so surrender the property is personally liable
to the borough for • sum equal to the value of the property not so
surrendered, but not exceeding the amount of the taxes or deficiencies,
including penalties and interest for the collection of which levy is made,
together with costs and interest from the date of the levy.
(i) All persons shall, on demand of a police officer about to distraint
or having distrained on property or rights of property, exhibit all books
containing evidence or statements relating to the property liable to distrain
for the tax due.
(j) The provisions of this chapter are not exclusive but are in addition
to all other existing remedies provided by law for the enforcement of a levy
and collection of taxes of the borough.
3.26.330 Prohibited acts and penalties.. (a) No person may:
1. Fail or refuse to file a completed tax return required by this
chapter, upon demand, or falsify any materiel statement in that return:
2. Fei1 or refuse to collect taxes levied by this chapter and remit
those taxes to the borough es required:
3. Conduct any business in the borough relating to sales. rentals,
or services subject to taxation under this chapter without first applying for
end obtaining a certificate of registration to collect the taxes imposed on
sales, rental, and services: or
4. Falsify any portion of an application for a certificate of
exemption.
(b) A person who violates a prohibition contained in subsection (a) of
this section is, upon conviction, punishable by a fine of not more than three
hundred dollars or imprisonment for a term not to exceed thirty days, or by
both.
(c) A person who violates any other provision of this chapter not
specifically set forth in subsection (a) of this section is, upon conviction,
punishable by a fine of not more than two hundred dollars.
3.26.340 Three veer voter review. The question of continuing to levy and
collect the sales tax described in this chapter shall be put to the registered
voters of the Kodiak Island Borough every third year at the regular election.
KODIAK ISLAND BOROUGH
Codes for Taxable Activities
July 1, 1987
CODE ACTIVITY,
7310 Advertising
7900 Amusements
7333 Artists /Photographers
5813 Bars /Package Stores
7230 Beauticians
7390 Business Services
2091 Canneries
4800 Communications
1500 Contracting
7800 General Repair Services
2000 Grocers
8000 Health Services
7010 Hotels /Motels
8100 Legal Services
8700 Miscellaneous Services
5912 Pharmacies
7299 Personal Services
6510 Rentals
5812 Restaurants
5300 Retail Sales to Consumers
7540 Service Stations
4120 Taxi Cabs
4930 Utilities
7530 Vehicle Repairs