1990-25 Amending the KIB Code by Adding Chapter 30.26 Sales Tax Providing for the Levying and Collection of a Sales Tax and Penalties for a Failure to CollectKODIAK ISLAND BOROUGH
ORDINANCE NO. 90 -25
WHEREAS, the State of Alaska has m
reductions and may pass further reductio
Island programs such as education, munici.al
sharing; and
By: Mayor
Introduced: 0
Substituted:
Public Hearing:
Defeated:
elby
/06/90
0/04/90
10/04/90
10/04/90
AN ORDINANCE AMENDING THE KIB CODE BY 'DING
CHAPTER 3.26 SALES TAX PROVIDING FOR THE VYING AND
COLLECTION OF A SALES TAX AND PENALTIES FOR F ILURE TO COLLECT
e substantial funding
in funding for Kodiak
assistance and revenue
WHEREAS, the Kodiak Isl. d Borough is responsible for
more than $30 million of programs n education, health and general
programs; and
WHEREAS, about $26 million of the revenue to support
these programs has come fre the State of Alaska while about $2.2
million is collected in local property tax from Kodiak Island
Borough real and person ..1 property owners; and
WHEREAS, i is the desire of the Assembly to determine if
the Kodiak Islana Borough voters would prefer to spread the
anticipated tax creases across more people with a sales tax or
continue to rai =e all tax revenue from property owners only; and
REAS, the ordinance was adopted placing the sales tax
question o- the ballot for the regular election of October 2, 1990
for the oters to ratify or defeat the levy of a sales tax;
NOW, THEREFORE, BE IT ORDAINED by the Kodiak Island
Bore gh Assembly that:
Ordinance No. 90 -25
Page 1 of 19
Section 1: This ordinance is of a permanent and g: eral
nature and shall become a part of the Code of Ordinances.
enacted.
Section 2: A new chapter, 3.26, Sales Tax, is hereby
Section 3: This ordinance becomes effect e on January 1,
1991 if passed by a majority of the voters voti • on the question
at the regular election of October 2, 1990.
ATTEST:
Borough Clerk
PASSED AND APPROVED THIS
AY OF , 1990.
ODIAK ISLAND BOROUGH
Borough Mayor
Presiding Officer
Ordinance No. 90 -25
Page 2 of 19
Sections:
CHAPTER 3.26
SALES TAX
3.26.010 Definitions.
3.26.020 Levy of sales tax.
3.26.030 General exemptions.
3.26.040 Exemption of sales for resale.
3.26.050 Senior citizen exemption.
3.26.060 Certificate of exemption.
3.26.070 Revocation of certificate of exem.tion.
3.26.080 Installment payments.
3.26.090 Accrual and collection.
3.26.100 Allocation of sales tax proce -.s.
3.26.110 Tax collectors -- registration ertificate.
3.26.120 Failure to obtain registration certificate.
3.26.130 Addition of tax.
3.26.140 Assumption of tax prohibi ed.
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 co s and reimbursements.
3.26.210 Penalty and inte -st.
3.26.220 Determination o exemptions.
3.26.230 Failure to col ect taxes.
3.26.240 Preservation .f records -- collection of arrears
tax.
3.26.250 Failure to ile return -- estimated tax.
3.26.260 Returns c• fidential.
3.26.270 Correcti.ns of errors on tax returns.
3.26.280 Returns confidential.
3.26.290 Recov- y of taxes.
3.26.300 Lien o secure payment of tax.
3.26.310 For losure against real property.
3.26.320 Co ection by distraint and sale.
3.26.330 P ohibited acts and penalties.
3.26.340 hree year voter review.
3.26.01 Definitions. As used in this chapter the following
definitions shall apply:
(A) " :uyer" or "purchase" means a person who acquires an
interest n real or personal property, or the right to use real or
persona property, or who acquires services for consideration.
(: "Charitable organization" means an organization having as
its p imary purpose relief of the poor and distressed or of the
unde privileged.
(C) "Finance director" means the tax collector of the Kodiak
I and Borough or an authorized agent of the Borough.
(D) "Rental" means permitting the use or occupancy of real or
ersonal property for consideration.
Ordinance No. 90 -25
Page 3 of 19
(E) "Residential unit" means one or more rooms and a s gle
kitchen in a dwelling designed as a unit for occupancy by no more
than one family for living or sleeping purposes.
(F) "Residential uses" means for use within a residential
unit.
(G) "Sale" means a transfer or exchange of any property, or
every kind and description, or the right to use or .ccupy 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 oth- expense. The
receipt of property or an interest in property s consideration,
the "sales price" or "charge" shall be based • the fair market
value of the property or interest in property
(I) "Seller" means a person, whether a ing as a principal,
agent, or broker, who sells, leases, or r nts real or personal
property or provides services to another f.r consideration.
3.26.020 Levy of sales tax. (A) A sales tax of one (1)
percent of the sales price or charg is levied on all sales,
rentals, and services made within the orough.
(8) For purposes of the tax lev d by this section, a sale of
tangible personal property is made ithin the borough if:
1. The sale is made b a business located within the
borough and delivery occurs with the borough;
2. The sale is made •y a business located within the
borough, the order is received or solicited within the borough or
payment is received within th- borough, and delivery is made to a
purchase within the Kodiak I =land Borough; or
3. The sale is m..e by a business located outside of the
borough as a result of elicitation inside of the borough and
payment or delivery occuo within the borough.
(C) For the pure. e of the tax levied by this section,
services are made with the borough if, regardless of the location
of the business rende ing the services:
1. The s= vices, or any essential or substantial part
thereof, are rende within the borough, or
2. The order for the services is solicited or received
within the borou or payment is received within the borough, the
services are re dered by a business maintaining an office, agent,
or employee thin the borough, and the services benefit or
directly rel e to any person, property, or organization within the
borough.
(D) e sales tax on rentals is applicable for all real
property ocated within the borough and to rentals of personal
property from a business within the borough and from a business
locate • outside the borough under circumstances which authorize the
impos ion of a sales tax were the property to have been sold
rath= than rented.
3.26.030 General exemptions. The following classes of sales,
rentals, and services are exempt from the tax imposed by this
hapter:
(A) Casual and isolated sales and rentals of personal
Ordinance no. 90 -25
Page 4 of 19
property, and services not rendered in the regular course
business of the seller.
(B) Medical services performed by licensed medical doc••rs,
dentists, osteopaths, optometrists, psychiatrists, psycholotists,
and chiropractors; sales of medicinal preparations an. drugs
prescribed by medical doctors; and hospital services.
(C) Sales, rentals and services to religious and aritable
organizations as defined in subsections 501(c(1), (3), -nd (4) of
the Internal Revenue Code, for the conduct of regular eligious or
charitable functions and activities, and not for th support or
maintenance of the functions and activities, an. not for the
support or maintenance of the general membership •r for communal
living.
(D) Sales of food in school cafeterias and nchrooms that are
operated primarily for students.
(E) Sales and services by non profit - chools and student
organizations within schools for suppo t of the school,
organization, or extracurricular activitie- or events.
(F) Sales rentals, and services to the United States, the
state of Alaska, and any agencies o• political subdivisions
thereof.
(G) Dues or fees to clubs, l..or unions, and fraternal
organizations.
(H) Subscriptions to newspaper and periodicals.
(I) Sales of animal food, s--d, plants, and fertilizers to
farmers or ranchers for farm use.
(J) Sales of insurance and •onds of guaranty and fidelity.
(K) Funeral charges.
(L) Transportation charg s of commercial airlines, passenger
ship companies, or air or boat charter operations.
(M) Services render -. by banking or savings and loan
institutions or credit un ens.
(N) Services render d by an employee to any employer in the
normal course of emplo ent.
(0) Sales, rent ls, and services which the borough is
prohibited from taxi • by the constitution or laws of the United
States or the State •f Alaska.
(P) Retail sales in dining rooms or cafeterias of food
furnished by no •rofit organizations under programs wholly or
partially suppor ed by government funds.
(Q) Nurser and babysitting services.
(R) Long distance transmission of telephone and telegraph
messages.
(S) S- es of heating fuel exclusively for residential uses
(not to i lude fuel used in or on watercraft).
(T) ales of electrical service to exclusively residential
units.
( ) Sale 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
1 trical energy exclusively for private residential consumption.
(W) Sales, rentals, and services to nonprofit associations or
rganizations operated primarily for the purpose of planning,
promoting, and conducting organized group activities for
Ordinance No. 90 -25
Page 5 of 19
participants who are 18 years of age or less.
(X) Charges for garbage /refuse collection for garbage /re se
generated exclusively by residential use.
(Y) Sales of water and sewer utility services •y a
governmental unit operated by a government unit.
3.26.040 Exemption of sales for resale. The follo ng sales
of property and services are exempt for the sales tax:
(A) Sales of property to wholesale dealers loc -ted in the
borough who deal in property of the type sold, for t'e purpose of
a subsequent sale by such dealer in the borough.
(B) Sales to retail dealers located in the b• ough, who deal
in property of the type sold, for the purpose of a subsequent
retail sale by such dealer in the borough, w ch sale will be
subject to the tax imposed by this chapter.
(C) Sales of tangible personal property t'- a person engaged in
manufacturing within the borough of products old primarily within
the borough, which property is converte• into or becomes an
ingredient or component part of the ma sfactured product or a
container therefor, or otherwise en -rs directly into the
manufacturing process.
(D) Sales to a building or •nstruction contractor or
subcontractor, for use on a project w hin the borough of building
materials, supplies, and other tan • ble personal property to be
incorporated or used as component 'arts of a completed structure,
driveway, landscaping, and othe portions of the project and
services utilized directly i the construction, erection,
landscaping, and similar work o the project. This exemption shall
not apply to tools, equipment fuel, clothing, food, and similar
items of property utilized b not incorporated into a project.
3.26.050 Senior citizens exemption. (A) A person sixty -five
years of age or older who as resided in the Kodiak Island borough
for a continuous perio• of 30 days or more may obtain a senior
citizens sales tax exe •tion certificate by submitting a completed
application to the f nance director on a form provided by the
borough. The application must be signed by the applicant under
oath and shall co ain information relating to the applicant's
residence, marit- status, rental or ownership of occupied
dwelling, person occupying the dwelling, and other information
reasonably nece sary to determine the applicant's eligibility and
monitor the us of the exemption certificate. The applicant shall
also submit or inspection and copying a birth certificate, or
other evide a determined by the finance director to be adequate,
to establ sh the applicant's age unless the applicant has
previousl established eligibility through the assessor's office
for senior citizen property exemption. The exemption certificate
shall issued without charge in the name of the applicant and
shall •e valid for a period of three (3) years.
(B) An exemption certificate issued to a person who is
pre ented or impaired from personally making purchases or payments
by a physical or mental infirmity may designate not more than two
her persons who shall be authorized to utilize the certificate
hen making purchases and payments on behalf of and for the sole
Ordinance No. 90 -25
Page 6 of 19
use and benefit of the certificate holder or the certifica
holder's spouse.
(C) No person may utilize a senior citizen tax exemp ion
certificate to purchase or acquire property or rentals that . e to
be consumed or utilized by a person or persons other t -n 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 certificat= 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 ot 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 •r the benefit of
a senior citizen which are exempt from tax unde the provisions of
this section shall confirm the identity of t - person or persons
presenting an exemption certificate, if no personally known to
them, by requesting identification and sha maintain records of
each such exempt sale with an appropriate eference to the senior
citizen exemption certificate number. the person making the
sale or rental has reason to believe at it is not for use or
consumption by a senior citizen or othe' qualified user, because of
the volume, type of purchase, or ot -r facts, that person shall
promptly report the possible frau• -ulent use of the exemption
certificate to the borough finance irector. The finance director
shall investigate the sale or sa -s, and if the finance director
determines that the exemption •-rtificate is being abused, the
matter shall be referred to t - borough mayor who shall conduct
such further investigation as s determined necessary and present
the facts to the assembly for =uthorization to initiate prosecution
or revocation action, or bo .
(E) Senior citizens' - xemption certificates shall be subject
to revocation as provide • in section 3.26.070 of this chapter.
3.26.060 Certificate of exemetion. (A) A person entitled to
the exemption under s= tion 3.26.035 or subsections (C), (I) or (W)
of section 3.26.030 - all apply to the borough for a certificate of
tax exemption whic will be issued, without charge, to qualified
persons. The app cation shall be submitted on a form provided by
the finance director and shall contain the name, address, type of
organization, t section under which the exemption is claimed, and
such other in'ormation as is required by the finance director.
Duplicate cec ificates will be issued on request.
(B) A construction contractor or subcontractor requesting
exemption ender subsection (D) of section 3.26.035 must apply to
the boro gh for a certificate of tax exemption which will be
issued, without charge, to qualified licensed contractors or
subcon actors. The exemption shall be valid for a period of one
year, at the end of which an accounting of the use of the exemption
shat be made to the finance director reflecting each building
pr ect and the correct location of the project by legal
d cription and any other commonly recognized address from which
ervices, materials, supplies, or other property are purchased or
obtained.
Ordinance No. 90 -25
Page 7 of 19
pa
(C) The certificate of exemption shall be valid for a per '•d
of one year and the expiration date shall be printed on the facr of
the certificate. Exemption certificates may be renewed annu• ly,
without charge, by completing an application form cont..ining
information required to assess the continued existence •f the
exemption.
3.26.070 Revocation of certificate of exem.tio.. (A) A
certificate of tax exemptions may be revoked by the borough mayor
for any of the following acts or omissions:
1. Falsification of any statement or inf• mation in the
application for certificate of exemption;
2. Utilization of the tax - exempt cer ificate for the
purchase or acquisition of nonexempt prope -ty, rentals, or
services;
3. Knowingly or negligently permi ting or authorizing
the use of the certificate by a person oth -r than an authorized
agent or employee of the person or entity • whom the certificate
was issued.
(B) Prior to revocation of a certi cate, the holder of the
certificate shall be provided with noti•- of the alleged violation
not less than ten days prior to the oposed effective date for
revocation of the exemption certific. e. The person or entity to
whom the certificate was issued may request a hearing before the
borough mayor regarding the allege violation by filing a written
request with the finance director prior to the effective date for
revocation. If requested, the h -aring 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 as mbly at a regular or special meeting held
within thirty days of er receipt of the notice of appeal. The
assembly may, in its discretion, hear the matter either on the
record or de novo. f the appeal is heard de novo, no evidence may
be presented befor 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 th date of revocation.
(E) The evocation provided by this section is in addition to
any other p- nalties provided by law for the violations.
3.26.080 Installment •a ents. When the payments for a
purchas., rental, or service are made on an installment basis, the
entire =ales tax should be collected from the down payment, or, if
a dow payment is not made or is insufficient to pay the tax, then
the entire first installment payment or payments until the tax is
3.26.090 Accrual and collection. Sales taxes imposed by this
chapter are due and payable by the buyer at the time of payment for
Ordinance No. 90 -25
Page 8 of 19
the purchase, service, or rental and are delinquent if not pax
when due. Every person making sales or rentals or render g
services that are taxable under this chapter shall collect he
taxes from the purchaser at the time of the sale, rental, or
service or, with respect to credit transactions, at the t' e of
collection of the sale price, rental, or service fee an. shall
transmit the money collected on a quarterly basis to the .orough.
3.26.100 Allocation of sales tax proceeds.
percent (100 %) of sales taxes collected under this cha
allocated to support of the Kodiak Island Borough sc
3.26.110 Tax collectors - -re
persons engaged in selling or renting proper
services subject to the tax imposed by this cha
registered with the Kodiak Island Borough shall
for a certificate of registration with the bor
not later than May 15, 1991, or the date of
the borough, or opening of a place of bu
whichever first occurs. An application
previously registered to collect sales
by a one hundred dollar ($100) deposit,
who does not maintain a permanent p
borough or who is not a local reside
Island Borough, a two hundred do
registrant may recover by a deduct'
with the first quarterly retur
insufficient, the balance shall
established credit with the bor
the required deposit.
(B) Upon receipt of a operly executed application on a form
provided by the finance director and accompanied by the required
deposit, the finance cifficer 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 talc. The certificate shall be prominently
displayed at the plao(e of business named on the certificate or, if
there is no regular place of business, the certificate shall be
attached to the stand, truck, or other merchandising or service
device. /
(C) The certificate of registration is nonassignable and
nontransferable, and must be surrendered to the finance director by
the person or entity to whom it is issued upon cessation of
business at the location named in the certificate. If the business
is continued at the same location but there is a change in its
business /form, the certificate holder making such change shall
surrende the old certificate to the finance director for
cancel =tion and the successor organization shall apply for a new
certi cate of registration. Upon receipt of such application
prop= ly executed, a new certificate bearing a new number will be
iss -ed to such successor.
(D) When there is a change of address for the certificate
lder's place of business, a new certificate of registration is
equired, bearing the same registration number, showing the new
e hundred
er shall be
of district.
istration certi cate. (A) All
y or rendering
ter not currently
ile an application
ugh finance director
ommencing business in
iness in the borough,
for a new business not
xes shall be accompanied
r, in the case of a person
ce of business within the
t residing within the Kodiak
ar ($200) deposit which the
n from the remittance submitted
filed or, if that return is
e refunded. If an applicant has
ugh, the finance director may waive
Ordinance No. 90 -25
Page 9 of 19
address.
(E) An applicant for a new certificate required to refle• a
change in business form or change of address for an exi- ing
certificate holder is not required to post a deposit wi the
application.
3.26.120 Failure to obtain registration certificate. It shall
be unlawful for any person to engage in, or continue i , business
within the borough or to conduct activities within e borough,
other than casual or occasional sales, unless and unt'h such person
obtains a certificate of registration. In the eve the finance
director ascertains that any such person is e•gaging in, or
continuing in, business within the borough, othe than casual or
occasional sales, without a certificate of reg stration, one or
more of the following remedies may be sought:
(A) Conduct a special audit of such pers• 's records and make
a demand upon such person to obtain a sale- tax certificate, in
which case such person who has engaged in •usiness or activities
within the borough without a certificate s 11 pay a special fee to
reimburse the borough for the expense of e audit, which fee shall
be the lesser of the sum of one thousa i dollars ($1,000) or ten
percent (10 %) of any tax found to be d However, the fee may be
waived at the discretion of the fin ce director for good cause
shown. The finance director shall -lso assess any delinquencies
and applicable penalties and intere-', if any, against such person,
if such person engaged in sales or ether transactions which were or
are subject to the borough sales tax.
(B) Report the facts to t - borough attorney for appropriate
action.
3.26.130 Addition of to . (A) The tax collector shall add the
tax imposed by this chapter to the price or charge, showing the tax
as a separate and distin item. The tax imposed on the sale of
more than one separately •riced item may be shown as a total tax on
the aggregate price of all items purchased and delivered at one
time. Tax levied by = city shall also be added to the price as
required by the appl cable city code.
(B) The owner •r other person providing products or services
through a coin -ope ated vending or amusement machine shall collect
the tax levied by this chapter and may include that tax in the fee
charged to oper =te the machine. The allocation of the payment
required to op rate the machine, between the purchase price and
sales tax, sh 11 be explained by notice or marking on the device.
(C) A usiness selling gasoline or diesel fuel delivered to
the custom '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 oh the meter or pump, or otherwise prominently displayed,
explaining the allocation of the total cost between the charge for
the fu l and the sales tax.
(D) A business engaged in the sale of beverages for
consdmption on the premises may, in lieu of adding the tax as a
separate item, include the tax imposed by this section in the price
f the beverage. A notice shall be prominently displayed in the
stablishment dispensing the beverages explaining the allocation of
Ordinance No. 90 -25
Page 10 at 19
the total price between the charge for the beverage and the sa -s
tax collected.
(E) A business providing for -hire passenger ve icle
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 shall be pre inently
displayed in each for -hire passenger vehicle expla ing the
allocation of the total charge between transportation • arges and
the sales tax collected.
(F) When authorized by this section, to be in uded in the
price or charge for a product or service, the tax • be collected
and remitted shall be determined by multiplying the gross receipts
from the services or product by .01 and dividin• that product by
1.01. Notices required by this section shall provided by the
borough.
3.26.140 Assum•tion of tax •rohibit-d. No person may
advertise or state to the public, or to =ny buyer, tenant, or
consumer of property or services, directl or indirectly that the
tax imposed by this chapter or any part ereof will be assumed or
absorbed by that person, or that it wil not be added to the sales
price or charge, or that it will be r funded, nor may any person
assume, absorb, or fail to separately state the tax to the buyer,
tenant, or consumer, unless otherw -e specifically authorized by
this chapter.
3.26.150 Tax schedule. Th- amount of tax to be added to the
purchase price, rental or sery ce charge shall be determined in
accordance with the following schedule in addition to any sales tax
levied by a city where the s.. le is occurring:
Charge Tax
Under 49 cent- None
$ .50 throug• $1.49 $.01
1.50 throu•h 2.49 .02
2.50 thr• gh 3.49 .03
3.50 an over . Continue at same scale
3.26.160 Ma imum taxable sale. (A) If the sales price of an
item or items or the charge for rental of any property or
performance or any service exceeds five hundred dollars for a
single trans- tion, that portion of the price or charge in excess
of five hun• ed dollars shall be exempt from the tax levied by this
chapter.
(B) In determining the maximum tax payable with regard to a
single t ansaction for the rendering of services on a substantially
regula basis, which services are generally repetitive in nature
and a e to be performed over a period of time under a contract,
each period of payment or partial payment under the contract shall
be eemed a separate service transaction. The maximum tax payable
s 11 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
Ordinance No. 90 -25
Page 11 of 19
for the service.
(C) For purposes of computing the maximum tax, a rental .f
property for a period in excess of one month shall be deemed .- a
series of rentals with each rental transaction terminating =s a
rental payment is made. The maximum sales tax payable sh- 1 be
applicable to each deemed rental with tax payments to acc'ue and
become payable at the time of filing the next quarterly r- turn to
be submitted following receipt of the rental.
3.26.170 Title to tax proceeds. The title t• the taxes
collected pursuant to this chapter shall vest in the orough upon
collection by the tax collector. Title to taxe collected on
behalf of any city within the Kodiak Island Borou• shall vest in
each respective city upon collection by the finance director.
Cities within the Kodiak Island Borough may •e authorized to
continue to collect their own sales tax so desc abed in their code
if recommended by the finance director a • approved by the
assembly.
3.26.180 Sales tax returns. (A) =ch person who sells or
rents property or renders services taxa• e under this chapter in
any quarter ending March 31, June 30, Se ember 30, and December 31
shall, on or before the last day of th month following the end of
each quarter year, or April 30, July 3 , October 31, and January 31
respectively, complete, sign, and f le with the borough a return
for that quarter upon forms furnish -d by the borough, setting forth
the following
1.
services made
2.
and services,
3.
services;
4.
The amount recei -d from all sales, rentals, and
or rendered with'. the borough;
The amount rece ed from nontaxable sales, rentals,
with a brief a planation of the nontaxable status;
The amount regoived from taxable sales, rentals, and
The amount $f tax attributable to the taxable sales,
rentals, and services;
5. The taxe collected;
6. A lists g of rental property(ies) by street address
showing the total n ber of units and the number of units rented
for each month of a reporting period, and
7. Suc other information and supporting papers as the
assembly may req ire in the reporting form.
(8) The to es collected shall be remitted with the reporting
form after deducting any administrative fees that may be allowed by
section 3.26 400.
(C) 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 onth.
( A person making sales or rentals or rendering services
withi the borough shall make a return, even through none of the
repo ted transactions are taxable, unless the person is a licensed
med cal doctor, dentist, osteopath, optometrist, chiropractor,
h pital, religious or charitable organization, or club, or a labor
/ion.
Ordinance No. 90 -25
Page 12 of 19
(E) A person who fails to timely comply with the provision of
this chapter relating to the filing of quarterly reports and
remittance of taxes collected for any one quarter during a ca -ndar
year shall, if required by written notice from the •inane
director, file the required reports and transmit collect =d sales
taxes monthly until such time as the finance director determines
that a willingness and ability to comply with the requi ements of
this chapter has been established. Monthly reports and emittances
shall be due on the fifteenth day of each month follow g the month
of collection. Any person may, upon notification • the finance
director, file reports and transmit taxes monthly.
(F) A person doing business within the boroug for a period of
time that is, or can reasonably expected to b-, less than six
months in duration shall file sales tax returns =nd remit taxes on
a monthly basis as provided in subsection (e) •f this section.
(G) A final sales tax return shall be fled and the tax due
remitted within fifteen days after the date of selling or
terminating a business. The purchaser .f the business shall
withhold a portion of the purchase mone sufficient to pay any
sales tax, penalties, and interest that may be due until seller
displays a receipt from the borough evid -ncing total payment of the
tax, interest, and penalties due. f the purchaser fails to
withhold the required sum from the p. ent due to the seller, the
purchaser shall also be liable f•. the taxes, penalties, and
interest owed by the seller to the •orough.
3.26.190 Credit for taxes. A person who has collected and
remitted a tax on a sale for which tax is subsequently determined
not to be due because a refund 's granted for returned merchandise,
payment is refused on a check received in conjunction with a sale,
or similar circumstances ma take a credit against future taxes.
Proper documentation shall •e made available by the tax collector,
on request, to substantia'e the credit taken.
3.26.200 Admini- trative costs and reimbursements. To
compensate sellers, r nters, and persons rendering services for
keeping the sales to 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 tha amount may be deducted when making remittances,
provided that th reports and remittances are received on or before
the due date fo such reports and remittances. A person filing a
report or remitting taxes collected after the due date forfeits the
right and clam to the fee provided by this section and shall remit
the entire tax due.
3.264210 Penalty and interest. (A) A person who fails to
remit taxes collected on or before the due date shall pay, in
additio to the tax due, a penalty of five percent of the tax that
is th due and unpaid for each month or any fraction of a month
duri • which any part of the tax remains unpaid until a total
pen ty of twenty percent has accrued, which penalty shall be added
to .11 returns until the tax, penalty, and interest have been paid.
F the purposes of this section, partial payments shall be
Ordinance No. 90 -25
Page 13 of 19
credited first to penalty and interest and then to the t
obligation originally due.
(B) Taxes that are not remitted to the borough when due s all
draw interest from the date of delinquency until paid at the ate
of fifteen percent per year. Interest shall not accrue on th- late
payment penalty assessed by subsection (a) of this secti• , but
shall accrue on the civil penalty assessed by section 3.2:.230.
3.26.220 Determination of exemptions. (A) Eve sale of
property or service and every rental made within th- borough or
rendered or received by a person within the bor•ugh, unless
explicitly exempted by ordinance, is presumed to be = ubject to the
tax imposed by this chapter.
(8) A purchaser, tenant, or other person obta ning property or
service who claims an exemption under a provisi• of this chapter
for which a certificate of exemption is require shall display the
certificate at the time of the purchase •r rental and the
certificate number shall be noted on the receipt, invoice, or other
evidence of the transaction.
(C) A purchaser, tenant, or other per -•n obtaining property or
services who believes the tax has been c -rged in error may make a
claim to the borough for refund within hirty days after the date
of sale.
(D) If the finance director den es a refund of the tax, the
taxpayer may appeal to the borough m- or by filing a written notice
of appeal, within ten days after t finance director's decision,
setting forth all facts relating to the claimed exemption. The
borough mayor shall provide an •pportunity for a hearing within
thirty days after the receipt • the notice of appeal.
3.26.230 Failure to co ect taxes. (A) A person required by
this chapter to collect sa es taxes levied who fails to collect
such taxes on taxable tra - actions shall be assessed with a civil
penalty of double the t that should have been collected, as
determined by an audit.
(B) If any of t - following defenses are established, the
civil penalty imposed by this section shall be waived:
1. The s curing, in good faith, of a certificate of
exemption or a st- ement of eligibility for exemption from the
person against wh• the tax would have been levied;
2. Pr ••f of a belief, based upon advice of legal counsel
or the boroug finance director, that the sale, rental, or
rendering of ervice was not subject to the tax levied by this
chapter acco panied by proof of notification in writing to the
borough ma r based on such belief prior to or immediately
following a transaction;
3. A reasonable attempt, in good faith, to collect the
tax from/the buyer.
A purchaser, renter, or other person obtaining property or
servi•es who fails to pay the tax levied by this chapter on a
taxa••le transaction shall be 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
dition to any other civil or criminal penalties imposed by this
Ordinance No. 90 -25
Page 14 of 19
chapter.
3.26.240 Preservation of records collection of arrears x.
(A) Every person required by this chapter to collect and -mit
taxes shall keep and preserve suitable records of the gross =ales,
rentals, or service receipts, together with bills of sale an other
pertinent records and documents which may be necessary to determine
the amount of the tax due under this chapter and to su•- tantiate
the information provided in filed returns. The records quired to
be maintained shall be preserved for not less than hree years
after the remittance of the taxes and shall b- subject to
examination by the borough finance director or any o er authorized
employee of the borough while engaged in reviewing •r auditing the
records of any taxpayer required to make a r -turn under the
provision to this chapter. The borough shall g e written notice
of intent to conduct an audit under this sectio not less than five
days prior to the audit.
(B) Collection of arrears taxed by e borough shall be
limited to the period of three years prior to the date when the
finance director or authorized agent •-gan an audit of the
taxpayer's records, wrote to the person t ough use of regular mail
concerning an apparent violation of t.is chapter, or took some
other recorded action to require a cer ificate of registration or
other compliance with this chapter.
3.26.250 Failure to file return -- estimated tax. If the
borough is unable to ascertain e correct tax to be paid by a
seller because of the failure o- refusal of the seller to file a
return, keep accurate record , or allow their inspection, or
because a return has been fa sified, the borough may prepare an
estimate of the tax due b• -ed on any information that may be
available. Notice of the Otimated tax shall be provided to the
seller and shall become filial 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 $y the finance director to be satisfactory,
establishing a lessen /liability.
3.26.260 Ret rns confidential. Except in connection with
official investig.etions or proceedings of the borough, whether
judicial or admiryistrative, 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. Th,j 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.
6.270 Corrections of errors on tax returns. If the
taxpa er makes an error or errors in computing the tax on a return,
the finance director or authorized agent shall correct such error
or errors and immediately notify the person filing the return by
ordinary mail that such correction has been made. Any additional
tax due, together with applicable penalty and interest in
Ordinance No. 90 -25
Page 15 of 19
accordance with section 3.26.210, for which the taxpayer beco -s
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 uture
returns, or shall authorize a refund in accordance with ection
3.26.280.
3.26.280 Refund of overpayment. The finance d ector, or
authorized agent, shall refund overpayment of taxes b ought about
by mathematical errors in the return or reports filed •y the person
remitting the tax, computational errors made by t'e remitter or
borough personnel with respect to said return or reports, duplicate
payments by remitter, or any overpayments made b a person filing
a tax return that may be determined as a result o an audit of such
person's records, provided, however, that in o event shall the
remitter of sales taxes be entitled to a refu • for overpayment of
sales taxes where the overpaid taxes have ac ually been collected
by said person. In the event the amount of overpayment is one
hundred dollars or less, a cash refund m- be authorized at the
discretion of the finance director. In -o event shall there be a
refund for overpayment that was made mor than three years peioe to
the discovery of the overpayment by th person filing the returns
or the finance director or authorized agent.
3.26.290 Recovery of taxes. axes due but not paid may be
recovered by the borough in an action against the buyer, tenant, or
recipient of services if that pe'-on has failed or refused to pay
the tax on request by the Belle or submitted a false certificate
of exemption. Taxes collecte• but not transmitted and taxes not
requested or demanded by t person charged with the duty of
collecting of tax may be rec•vered by an action against the person
selling or renting the pro. -rty or services.
3.26.300 Lien to s= ure •a ent of tax. (A) The tax imposed
by this chapter, toget -r with any penalty and interest that may
accrue, shall constitu-e a lien in favor of the borough upon all of
the property, real an personal, and any interest in such property
owned or held by t person or persons required to pay the tax.
The lien arises a the time of delinquency and continues for a
period of two yea's from the date of notice to the borough of the
delinquency unle =s an action is initiated during that period to
foreclose the 1 en or the lien is satisfied by distraint and sale.
(B) The d.te of notice to the borough of delinquency shall be
the first of he following events to occur:
1 A required return is filed accurately reflecting the
tax due d the return is not accompanied by the required
remittanc ;
2. A notice of estimated tax is provided to a person by
the borQfugh and the thirty day period for filing an accurate return
has a fired.
C) The lien created by this section is not valid against a
mor gagee, deed of trust beneficiary, or other person holding a
li n or security interest in the property, or a purchaser or
j dgment creditor, who acquires an interest in the property prior
Ordinance No. 90 -25
Page 16 of 19
to filing by the borough of a notice of lien in the office of h
Kodiak district recorder.
3.26.310 Foreclosure against real property. A lien •r the
tax, interest, and penalties created by this chapter may be
foreclosed, when authorized by the assembly, by commence nt of an
action in the superior court pursuant to the procedure s forth in
AS 09.45.170 -220.
3.26.320 Collection by distraint and sale. (A The borough
may collect taxes, with interest, penalties, and o• er additional
amounts permitted by law, by distraint and sale of the property of
the person liable to pay the taxes, interest, •enalty or other
additional amount, who neglects or refuses to q.y them within ten
days after receipt of notice and demand for p ent.
(B) In case of neglect or refusa to pay taxes or
deficiencies as provided in this section, t finance director may
issue a warrant authorizing any police officer to levy upon, seize,
and sell any property, except exempt pr••erty, belonging to the
person for the payment of the amount due, with interest and
penalty. When distraint is made as pr • ided in this section, the
police officer charged with the servic=s shall make an inventory of
the property served and leave a sign -. copy of that inventory with
the owner or possessor of the proper y, or at the dwelling or usual
place of business, if a person of - uitable age and discretion can
be found, or if the taxpayer is a corporation or other type of
organization with an officer, m. ager, general agent, or agent for
process, with a notation of t - amount demanded and the time and
place of sale.
(C) The police officer hall immediately publish a notice of
the time and place of sal- at public auction, together with a
description of the propert 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 to be made.
(D) The time of %ale shall be not less than fifteen or more
than sixty days from / the date of the notification to the owner or
possessor of the property, and the place proposed for the sale
shall not be more/ than five miles from the place making the
distraint. The dale may be continued from time to time in the
discretion of thq'police officer, but not for more than thirty days
after the date ,pecified 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 fficer charged with the collection, together with the
fees and oer charges.
(F) he police officer conducting the sale under this section
shall g
full o
Ve to the purchaser a certificate of sale on payment in
the purchase price. The certificate of sale:
1. Is prime facie evidence of the right of the police
officer to make the sale, and conclusive evidence of the regularity
of a officer's proceedings in making the sale;
2. Transfers to the purchaser all right, title, and
terest of the delinquent tax payer in and to the property sold;
3. Where the property consists of stock, is notice, when
Ordinance No. 90 -25
Page 17 of 19
received, to the corporation to record the transfer on their books
and records in the same manner as if the stock were transferr -. or
assigned by the party holding the stock in lieu of an origi :1 or
prior certificate, which is void, whether canceled or not; and
4. Where the subject of the sale is security other
evidence of debt, is a good and valid receipt to the perso holding
it, as against a person holding or claiming to hold pos- - ssion of
the security or other evidence of debt.
(G) If property seized and sold is not sufficien to satisfy
the claim of the borough for which distraint or sei re is made,
the police officer may, thereafter, and as often as is necessary,
proceed to seize and sell in like manner any other p operty subject
to the lien created by this chapter until the amo.nt due from the
taxpayer together with all expenses is fully pai..
(H) A person in possession or control of . operty subject to
distraint, upon which a levy is made, shall, upon demand by the
police officer making the levy, surrender he property to the
police officer, unless the property is, at t time of the demand,
subject to an attachment under judicial . ocess. A person who
fails or refuses to so surrender the prope ty is personally liable
to the borough for a sum equal to the va e of the property not so
surrendered, but not exceeding the mount of the taxes or
deficiencies, including penalties and nterest for the collection
of which levy is made, together with costs and interest from the
date of the levy.
(I) All persons shall, on dem d of a police officer about to
distraint or having distrained on .roperty or rights of property,
exhibit all books containing evid >nce 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 material
statement in that retur
2. Fail qk' refuse to collect taxes levied by this
chapter and remit th se taxes to the borough as required;
3. Cond ct any business in the borough relating to
sales, rentals, or services subject to taxation under this chapter
without first plying for and 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 •.f exemption.
(B) 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 •t to exceed thirty days, or by both.
( A person who violates any other provision of this chapter
not s. cifically set forth in subsection (a) of this section is,
upon onviction, punishable by a fine of not more than two hundred
dol ars.
Ordinance No. 90 -25
Page 18 of 19
KODIAK ISLAND BOROUGH
Codes for Taxable Activities
CODE ACTIVITY
7310 Advertising
7900 Amusements
7333 Artists/Ph e ographers
5813 Bars /Pac age Stores
7230 Beaut ians
7390 Bus ness Services
2091
4800
1500
7600
2000
8000
7010
8100
8700
5912
7299
6510
5= 2
5300
7540
4120
4930
7530
nneries
Communications
Contracting
General Repair Services
Grocers
Health Services
Hotels /Motels
Legal Services
Miscellaneous Services
Pharmacies
Personal Services
Rentals
Restaurants
Retail
Service Stations
Taxi Cabs
Utilities
Vehicle Repairs
Ordinance No. 90 -25
Page 19 of 19