Chapter 4.23
TAX ON SALES MADE BY REMOTE SELLERS
Sections:
4.23.040 Adoption of Alaska Remote Sellers Sales Tax Code.
4.23.050 Delegation of authority.
4.23.010 Scope.
This chapter applies only to sales made by remote sellers as defined herein. (Ord. 20-03 § 8 (part), 2020.)
4.23.020 Copies on file.
At least five copies of the Alaska Remote Sellers Sales Tax Code shall be made available for public inspection at least fifteen days prior to the public hearing for adoption of the ordinance codified in this chapter at the time and place set out in the notice published for the hearing of the ordinance. Copies shall be available for public review at the following locations: one copy at the office of the city clerk; one copy at the city planning department; one copy at the city fire department; and two copies at the city library. A person may request, and the city clerk shall provide, a copy of the code(s) at no more than cost. (Ord. 20-03 § 8 (part), 2020.)
4.23.030 Definitions.
When not clearly otherwise indicated by the context, the following words and phrases, as used in this chapter, have the following meanings:
“Commission” means the Alaska Intergovernmental Remote Sales Tax Commission established by agreement between local government taxing jurisdictions within Alaska, and delegated tax collection authority.
“Delivered electronically” means delivered to the purchaser by means other than tangible storage media.
“Entity-based exemption” means an exemption based on who purchases the product or who sells the product. An exemption that is available to all individuals shall not be considered an entity-based exemption.
“Goods for resale” means:
1. The sale of goods by a manufacturer, wholesaler or distributor to a retail vendor; sales to a wholesale or retail dealer who deals in the property sold, for the purpose of resale by the dealer.
2. Sales of personal property as raw material to a person engaged in manufacturing components for sale, where the property sold is consumed in the manufacturing process of, or becomes an ingredient or component part of, a product manufactured for sale by the manufacturer.
3. Sale of personal property as construction material to a licensed building contractor where the property sold becomes part of the permanent structure.
“Marketplace facilitator” means a person that contracts with remote sellers to facilitate for consideration, regardless of whether deducted as fees from the transaction, the sale of the remote seller’s property or services through a physical or electronic marketplace operated by the person, and engages:
1. Directly or indirectly, through one or more affiliated persons in any of the following:
a. Transmitting or otherwise communicating the offer or acceptance between the buyer and remote seller;
b. Owning or operating the infrastructure, electronic or physical, or technology that brings buyers and remote sellers together;
c. Providing a virtual currency that buyers are allowed or required to use to purchase products from the remote seller; or
d. Software development or research and development activities related to any of the activities described in subsection (2) of this definition, if such activities are directly related to a physical or electronic marketplace operated by the person or an affiliated person; and
2. In any of the following activities with respect to the seller’s products:
a. Payment processing services;
b. Fulfillment or storage services;
c. Listing products for sale;
d. Setting prices;
e. Branding sales as those of the marketplace facilitator;
f. Order taking;
g. Advertising or promotion; or
h. Providing customer service or accepting or assisting with returns or exchanges.
“Member” means a taxing jurisdiction that is a signatory of the Alaska Remote Sales Tax Intergovernmental Agreement, thereby members of the Commission, and who has adopted the Remote Seller Sales Tax Code.
“Nonprofit organization” means a business that has been granted tax-exempt status by the Internal Revenue Service (IRS); means an association, corporation, or other organization where no part of the net earnings of the organization inures to the benefit of any member, shareholder, or other individual, as certified by registration with the IRS.
“Physical presence” means a seller who establishes any one or more of the following within a local taxing jurisdiction:
1. Has any office, distribution or sales house, warehouse, storefront, or any other place of business within the boundaries of the local taxing jurisdiction;
2. Solicits business or receives orders through any employee, agent, salesman, or other representative within the boundaries of the local taxing jurisdiction or engages in activities in this state that are significantly associated with the seller’s ability to establish or maintain a market for its products in this state;
3. Provides services or holds inventory within the boundaries of the local taxing jurisdiction;
4. Rents or leases property located within the boundaries of the local taxing jurisdiction.
A seller that establishes a physical presence within the local taxing jurisdiction in any calendar year will be deemed to have a physical presence within the local taxing jurisdiction for the following calendar year.
“Point of delivery” means the location at which property or a product is delivered or service rendered.
1. When the product is not received or paid for by the purchaser at a business location of a remote seller in a taxing jurisdiction, the sale is considered delivered to the location where receipt by the purchaser (or the purchaser’s recipient, designated as such by the purchaser) occurs, including the location indicated by instructions for delivery as supplied by the purchaser (or recipient) and as known to the seller.
2. When the product is received or paid for by a purchaser who is physically present at a business location of a remote seller in a taxing jurisdiction the sale is considered to have been made in the taxing jurisdiction where the purchaser is present even if delivery of the product takes place in another taxing jurisdiction. Such sales are reported and tax remitted directly to the taxing jurisdiction, not to the Commission.
3. For products transferred electronically, or other sales where the remote seller or marketplace facilitator lacks a delivery address for the purchaser, the remote seller or marketplace facilitator shall consider the point of delivery the billing address of the buyer.
“Product-based exemption” means an exemption based on the description of the product and not based on who purchases the product or how the purchaser intends to use the product.
“Remote sales” means sales of goods or services by a remote seller or marketplace facilitator.
“Remote seller” means a seller or marketplace facilitator making sales of goods or services delivered within the state of Alaska, without having a physical presence in a taxing jurisdiction, or conducting business between taxing jurisdictions, when sales are made by Internet, mail order, phone or other remote means. A marketplace facilitator shall be considered the remote seller for each sale facilitated through its marketplace.
“Services” means all services of every manner and description, which are performed or furnished for compensation, and delivered electronically or otherwise outside the taxing jurisdiction (but excluding any that are rendered physically within the taxing jurisdiction), including but not limited to:
1. Professional services;
2. Services in which a sale of property or product may be involved, including property or products made to order;
3. Utilities and utility services not constituting a sale of property or products, including but not limited to sewer, water, solid waste collection or disposal, electrical, telephone services and repair, natural gas, cable or satellite television, and Internet services;
4. The sale of transportation services;
5. Services rendered for compensation by any person who furnishes any such services in the course of his trade, business, or occupation, including all services rendered for Commission;
6. Advertising, maintenance, recreation, amusement, and craftsman services.
“Taxing jurisdiction” means a local government in Alaska that has a sales tax and is a member of the Alaska Remote Sellers Sales Tax Commission.
“Transferred electronically” means obtained by the purchaser by means other than tangible storage media. (Ord. 20-03 § 8 (part), 2020.)
4.23.040 Adoption of Alaska Remote Sellers Sales Tax Code.
The city adopts by reference the January 6, 2020, Edition of all provisions of the Alaska Remote Sellers Sales Tax Code (including the definitional section included in Section 4.23.030) and that portion of the supplemental definitions thereto not included in Section 4.20.020. (Ord. 20-03 § 8 (part), 2020.)
4.23.050 Delegation of authority.
The city hereby delegates the authority to administer and collect tax on sales made by remote sellers to the commission including remote seller sales tax registration, exemption certification, collection, remittance, and audit authority. (Ord. 20-03 § 8 (part), 2020.)