Chapter 17.10
SALES TAX
Sections:
17.10.010 Sales tax.
17.10.020 Exceptions.
17.10.030 Exemptions.
17.10.040 Tax based on selling price.
17.10.050 Application for exemption.
17.10.060 Sales tax licensing.
17.10.070 Sales tax returns.
17.10.080 Remittance of tax.
17.10.090 Termination, sale or transfer of retail business.
17.10.100 Penalties and interest.
17.10.110 Estimated tax.
17.10.120 Tax evasion.
17.10.130 Tax audits.
17.10.140 Deductible collection expenses.
17.10.150 Tax liens interest.
17.10.160 Enforcement remedies.
17.10.170 Situs of taxable transaction.
17.10.180 Definitions.
17.10.190 Resale certificate.
17.10.010 Sales tax.
There shall be levied and collected a sales tax of five percent of the selling price on all retail sales and rentals of goods and services in the city, except as provided in Section 17.10.020. (Ord. O-03-07-2 § 1, 2003: Ord. O-93-6-6 § 1 (part), 1994)
17.10.020 Exceptions.
No sales tax shall be levied or collected on the following retail sales, rentals of goods, and services:
(a) Medical, dental, optometric and hospital services;
(b) Prescription medicines, oxygen used for medical purposes, blood and blood plasma, artificial limbs, eyes, organs, hearing aids, prescription eyeglasses, teeth, crutches, wheelchairs and walking aids sold or rented by a registered or certified doctor, nurse, dentist, optician, audiologist, pharmacist or hospital institution;
(c) Services and construction materials for actual use and either consumption or absorption in a construction project for which a building permit has been issued;
(d) That portion in excess of one thousand five hundred dollars of the selling price of each retail sales transaction of a snowmachine or an all-terrain vehicle (ATV);
(e) Rentals, leases or transfers of an interest in real property for a period in excess of twenty-seven days;
(f) Gross receipts or proceeds from carrier sales made directly to consumers or users of newspapers or any other periodicals;
(g) Purchases made with food coupons, food stamps or other type of certificate issued under 7 U.S.C. 2011-2025 (Food Stamp Act);
(h) Purchases made with food instruments, food vouchers, or other type of certificate issued under 42 U.S.C. 1786 (Special Supplemental Food Program for Women, Infants and Children);
(i) Incidental and de minimus use of residential housing for income-producing purposes;
(j) That portion in excess of one thousand five hundred dollars of the selling price of each retail sales transaction of an automobile, minivan, suburban, van or pickup truck;
(k) The following fees charged by banks, savings and loan associations, credit unions and investment banks:
(1) Maintenance of banking accounts and credit card accounts,
(2) Interest for loans and on credit card accounts,
(3) Loan origination services,
(4) Points on assessed loans,
(5) Set up services for any financial service such as escrow accounts,
(6) Closing costs on loans but only such costs that are not exact reimbursement of third party services such as credit checks, title insurance or appraisal fees,
(7) Overdraft and NSF fees,
(8) Stop payment fees,
(9) Wire transfer fees,
(10) Debit card fees,
(11) Telephone banking charges,
(12) Foreign currency exchange services,
(13) Notary services,
(14) Signature guarantee services,
(15) Fees for the purchase of checks, cashier checks, money orders, travelers checks;
(l) Dues or fees to clubs, labor unions or fraternal organizations;
(m) Child care, pre-elementary school and baby-sitting services;
(n) Goods or services, other than charitable gaming, sold by student organizations to raise funds for extracurricular activities or events;
(o) Retail sales of food are exempt in the following:
(1) When served in cafeterias or lunchrooms of elementary, secondary, post-secondary schools, colleges or universities which are operated primarily for students and staff, and are not operated for the public or for profit,
(2) Meals delivered by a nonprofit organization to handicapped or senior citizens at their place of residence; or meals served on the premises of a nonprofit senior citizen organization which receives funding from the state of Alaska or a political subdivision of the state; provided the sale price of such meals does not exceed the cost of delivery or service of such meals;
(p) Wharfage charges, whether arising out of foreign, interstate or intrastate commerce. (Ord. O-07-04-01 § 1, 2007; Ord. O-03-10-2 § 1, 2003; Ord. O-03-01-6 § 1, 2003; Ord. O-01-4-2 § 2, 2001; Ord. O-96-5-6, 1996; Ord. O-93-6-6 § 1 (part), 1994)
17.10.030 Exemptions.
(a) Gross receipts deriving from transactions in the following categories shall be exempt from sales taxation upon presentation by the buyer of a valid exemption certificate and reasonable identification:
(1) Retail sales and rentals of goods and services directly to a municipality, a state, or the United States government;
(2) Retail sales and rentals of goods or services except the rental of hotel or motel rooms directly to a nonprofit religious, charitable, cemetery, hospital or educational entity, and used exclusively for nonprofit religious, charitable, cemetery, hospital or educational purposes;
(3) Retail sales and rentals of goods except the rental of hotel or motel rooms directly to a nonbusiness organization composed entirely of persons with ninety days or more of active service in the armed forces of the United States whose conditions of services and separation were other than dishonorable, or the property of the auxiliary of such organization.
(b) A retail sale or rental of goods or services described in subsection (a) of this section, from which the otherwise exempt buyer derives income is exempt only if that income is solely from use of the goods and services by nonprofit religious, charitable, hospital or educational groups for classroom space.
(c) Purchasers of electric, water, sewer and landfill utility services are exempt from payment of one percent of the sales tax due under this chapter. (Ord. O-05-10-01 § 2, 2005; Ord. O-00-6-2 § 3, 2000: Ord. O-93-6-6 § 1 (part), 1994)
17.10.040 Tax based on selling price.
The seller shall apply the applicable sales tax percentage to the selling price and add the amount of the sales tax to the sale or rental price. The tax shall be stated separately on all invoices, receipts and other documents of the sale. (Ord. O-06-09-07 § 2, 2006: Ord. O-03-07-2 § 3, 2003: Ord. O-93-6-6 § 1 (part), 1994)
17.10.050 Application for exemption.
(a) No exemption may be granted except upon written application for the exemption on a form supplied by the assessor. The claimant must file the application no later than February 1st of the assessment year for which the exemption is sought, but during the same year the city council for good cause shown may waive the claimant’s failure to make timely application for the exemption for that year and authorize the assessor to accept the application as if timely filed. The claimant must file a separate application for each assessment year in which the exemption is sought. If an application is filed within the required time and is approved by the assessor, he or she shall allow an exemption in accordance with the provisions of Section 17.10.030. If a claimant whose failure to file by February 1st of the assessment year has been waived as provided in this subsection and the application for exemption is approved, the amount of tax which the claimant may have already paid for the assessment year with respect to the property exempt shall be refunded to him or her.
(b) The assessor may at any time require proof, in the form he or she considers necessary, of the grounds for the exemption and the amount of the exemption claimed under this section. The claimant shall have the burden of establishing his or her qualifications for an exemption, and the exemption ordinance and statutes shall be strictly construed. (Ord. O-07-04-01 § 2, 2007; Ord. O-93-6-6 § 1 (part), 1994)
17.10.060 Sales tax licensing.
(a) No person may engage in any retail sales transaction as a seller within the city without first procuring an annual sales tax license from the office of the city clerk.
(b) An application for a sales tax license shall include the name of the applicant; the mailing, residential, and business addresses of the applicant; certification by the applicant that he or she has not had any business license or tax license suspended or revoked within six months prior to the date of the application; proof of compliance with all state and federal licensing and registration requirements; and such other information as the city clerk may deem reasonably necessary for the proper administration of this chapter. The information contained in the application shall be submitted under oath or affirmation of the applicant.
(c) No sales tax license shall be issued to or renewed for a person who is required to have a state business license registration or permit, until that applicant submits evidence (1) that he or she has in his or her possession, or has applied for, the state business license, registration or permit; and (2) that all license, registration and permit fees have been paid current. A licensee, registrant or permittee whose fee falls due annually shall have thirty days after the due date in which to submit proof that the state license, registration or permit has been obtained. No sales tax license may be issued to or renewed for a person owing a judgment, delinquent taxes, or a utility bill to the city, except by terms and conditions established in each such case by the city manager.
(d) There shall be a fee of fifteen dollars with the original application for the sales tax license. The license shall be renewed annually by February 1st upon payment of a fee of twenty-five dollars and completion of a renewal form as provided by the city clerk. The sales tax license shall be nontransferable. (Ord. O-00-11-E § 2, 2000; Ord. O-93-6-6 § 1 (part), 1994)
17.10.070 Sales tax returns.
(a) For each separate business entity, a seller shall complete a Nome sales tax return reporting in a manner established by the form, all retail sales during the preceding calendar month. Each sales tax return shall set forth the gross receipts of the retail business for the calendar month, including all taxable and nontaxable transactions. The dollar amount and exemption certificate identification number for each exempted transaction shall be identified on the tax return with the exception of exemptions provided under NCO Section 17.10.030(c), along with such other information as the city clerk may require. Each sales tax return for a calendar month shall be signed and sworn or affirmed under oath by the seller, and shall be received at the office of the city clerk or postmarked with sufficient postage on or before the twentieth day of the month succeeding the end of that calendar month. In the event that the due date is a Saturday, Sunday or legal holiday, the sales tax return shall be received or postmarked with sufficient postage on or before the next following business day. All taxes, penalties and interest due shall be remitted with the sales tax form.
(b) As part of the reporting requirement of this section a permittee, vendor or operator conducting a charitable gaming business and acting as a seller in the city shall file with the city copies of all reports reflecting sales in the city which are required to be filed by a permittee, vendor or operator with the state pursuant to AS 05.15.080 and AS 05.15.083. The permittee, vendor or operator shall file these reports with the city with the first succeeding sales tax return due to the city after the time required for the permittee, vendor or operator to file the report under AS 05.15.080 and AS 05.15.083. In the event a permittee, vendor or operator has obtained from the state an extension of time to file a report from the state, the time for the permittee, vendor or operator to file the report required by this section shall likewise be extended provided that the permittee, vendor or operator files with the city written authorization of any extension from the state before the next succeeding sales tax report is due. In the event a permittee utilizes a vendor to sell pull-tabs on its behalf, the vendor acting as a seller in the city shall, as part of the reporting requirement of this section, file with the city copies of all reports provided by the vendor to the permittees to enable the permittees to file their quarterly and annual reports under AS 05.15.080.
(c) For purposes of this section, the terms “operator”, “permittee” and “vendor” have the meanings given to those terms in AS 05.15.690. (Ord. O-01-11-3 § 2, 2001: Ord. O-93-6-6 § 1 (part), 1994)
17.10.080 Remittance of tax.
(a) A full remittance of all sales tax levied shall be due and owing from the seller to the city on the twentieth day of the month succeeding the end of the calendar month of the taxable transaction, whether or not the same tax has been collected from the buyer. Upon receipt of sufficient proof that the seller has made a diligent effort to collect delinquent sales tax due and owing from a buyer, the city clerk may deduct from the sales tax due to the city for the first or fourth calendar quarter that amount of sales tax paid to the city on uncollectible accounts during the preceding calendar year.
(b) In addition to the monthly reporting and remittance requirements of this chapter, a person doing business within the city, and liable for an itinerant nonresident business license on less than an annual basis, shall file a sales tax return and remit in full the tax due within twenty-four hours following the expiration of his license, and on each occasion of departing from the city for a period of time exceeding twelve hours. (Ord. O-93-6-6 § 1 (part), 1994)
17.10.090 Termination, sale or transfer of retail business.
(a) A seller who sells, transfers or assigns a substantial portion of his or her retail business interest to another person shall make a final sales tax return within twenty days after the date of said conveyance. The purchaser of the business shall withhold a portion of the purchase money sufficient to pay any sales tax, penalties and interest which may be due, unless the seller displays a receipt from the city clerk showing that all tax obligations imposed by this chapter have been paid in full. Any purchaser of a business who fails to withhold said moneys due and owing to the city shall be personally liable for said taxes, penalties and interest owed by the seller to the city.
(b) A seller who terminates his business without the benefit of a purchaser, successor or assign, shall make a final tax return and settlement of tax obligations within fifteen days of said termination.
(c) Any person who has filed a sales tax return shall be presumed to be making sales in succeeding months unless he or she files a subsequent return declaring the termination or sale of the retail business. (Ord. O-93-6-6 § 1 (part), 1994)
17.10.100 Penalties and interest.
(a) A penalty of five percent of the sales tax due and owing shall be added to the tax for the first month or fraction thereof of delinquency or failure to file a sales tax return with the information required under Section 17.10.070, and an additional five percent of the sales tax due and owing shall be added to the tax for the second month, or fraction thereof, of delinquency or failure to file a tax return with the information required under Section 17.10.070 for a total penalty of ten percent for each month of delinquency or failure to file a sales tax return as required under Section 17.10.070. Any surcharge required by AS 12.55.039 shall also be imposed.
(b) In addition to penalties, interest shall accrue on the principal amount of the delinquent tax at the rate of eight percent per annum from the date of the delinquency until paid.
(c) Penalties and interest shall be assessed and collected in the same manner as the sales tax is assessed and collected. (Ord. O-01-11-1 § 2, 2001: Ord. O-99-1-8 § 2, 1999: Ord. O-99-11-3 § 34, 1998: Ord. O-93-6-6 § 1 (part), 1994)
17.10.110 Estimated tax.
(a) On or after the fifth day of delinquency in the filing of the required sales tax return, the assessor shall assess against the delinquent seller a sales tax for the period based on a reasonable estimate of the gross taxable revenues computed from prior tax returns submitted by the delinquent seller, plus twenty-five percent of the estimated gross taxable revenue. If the assessor determines that insufficient prior tax returns are available for computing a reasonable estimate of the gross taxable revenues, he or she may calculate the estimate from other sources of information, including but not limited to information derived from comparable businesses. Said assessment shall be due and owing on the first day of delinquency, and shall be subject to the same penalties and interest provided in Section 17.10.100.
(b) The estimated assessment of sales tax due and owing, as provided in subsection (a) of this section, shall become irrebuttable evidence of the amount due and owing to the city unless the city clerk receives, within ten days of the signing of the certified card, certified mailing of notice of the estimated assessment, an accurate and complete sales tax return for the delinquent period together with a full payment of all taxes, penalties and interest due, and an additional payment of fifty dollars to defray the expense to the city of estimating the delinquent taxes and providing notice thereof. (Ord. O-93-6-6 § 1 (part), 1994)
17.10.120 Tax evasion.
Any person who fails to file a statement required by this chapter, or who makes a false affidavit of the amount, location, kind or value of property subject to sales taxation, with intent to evade the taxation, is guilty of a misdemeanor. Upon conviction, he or she is punishable by a fine of not more than one thousand dollars plus any surcharge required to be imposed by AS 12.55.039, or by imprisonment for not more than ninety days, or by both, together with the costs of prosecution. (Ord. O-99-11-3 § 35, 1998: Ord. O-93-6-6 § 1 (part), 1994)
17.10.130 Tax audits.
(a) The assessor is not bound to accept a sales tax return as correct. He or she may make an independent investigation of all retail sales transactions. In such case, the assessor may make his or her own valuation of the taxable property, which shall be prima facie evidence in a court of law.
(b) For the conduct of an investigation, the assessor or his or her agent may enter any premises during reasonable hours, and may examine all books, records and other documents and property that may reasonably lead to the discovery of evidence of retail sales transactions. A person shall, upon request, furnish to the assessor or his or her agent every facility and assistance for the purposes of the investigation.
(c) An assessor may examine a person on oath. Upon request during reasonable hours, the person shall present himself or herself for examination by the assessor.
(d) Each seller liable to collect and pay sales tax shall maintain for a period of three years all books, records and other documents containing evidence of retail sales transactions, and shall produce any and all said books, records and other documents for examination and inspection at any reasonable time by the assessor. (Ord. O-93-6-6 § 1 (part), 1994)
17.10.140 Deductible collection expenses.
A seller may deduct three percent of the amount of the tax due for any reporting period as compensation for the costs of collection, recordkeeping, accounting and remittance, provided receipt of the tax return and the tax remittance are timely and accurate and provided, however, that such a tax collection discount shall not exceed thirty-five dollars for any single monthly reporting period. No tax collection discount shall be allowed to the seller if either the sales tax return or the tax payment is delinquent at the time of payment, or if the assessor determines that the seller has failed to maintain proper recordkeeping and accounting of retail sales transactions during the tax period. (Ord. O-93-6-6 § 1 (part), 1994)
17.10.150 Tax liens interest.
(a) The tax, interest, penalties and other costs due and owing under this chapter shall constitute a lien of the city upon the assets or property of the delinquent seller.
(b) A notice of lien for amounts described in subsection (a) of this section may be filed in the office of the district recorder, Nome recording district, second judicial district; however failure to so record said interests shall not be construed as a waiver or abrogation of any and all priorities, rights and interests of the city at law and in equity. Upon full satisfaction of payment of all taxes, interest, penalties and costs due and owing to the city, the assessor shall file a certificate discharging the lien. (Ord. O-93-6-6 § 1 (part), 1994)
17.10.160 Enforcement remedies.
If sales tax is not paid when due, the city may enforce the payment of the tax, penalties and interest by any method available in law, including but not limited to distraint and sale of personal property, a personal action against the delinquent taxpayer, a lien foreclosure action, and criminal misdemeanor prosecution. (Ord. O-93-6-6 § 1 (part), 1994)
17.10.170 Situs of taxable transaction.
(a) Whenever any element or constituent part of a retail sale or rental of goods or services occurs in the city, the transaction shall be construed as occurring in the city for tax purposes except as provided in subsection (b) below.
(b) Sales and rentals of goods and services resulting from orders received from outside the city by mail, telephone or other similar public modes of communications shall not be construed as a taxable transaction if delivery of the goods ordered is made outside the city by mail or common carrier, or if the performance of the services ordered occurs outside the city. Any fractional portion of services performed inside the city shall not be included in this exception, and shall be fully taxable. (Ord. O-93-6-6 § 1 (part), 1994)
17.10.180 Definitions.
For purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them in this section:
“Common carrier” means a person or entity engaged in transporting passengers or goods or both for valuable consideration in the normal course of the business of that person or entity, or a seller engaged in transporting directly to a common carrier goods sold by him or her in a retail sales transaction directly to a buyer residing outside the city.
“Retail Sales transaction”means any sale, lease, rental transfer or assignment of any right, title or interest in any goods, personal property or real property and any provision of labor or services, for valuable consideration, for any purpose except resale without alteration by a buyer presenting a resale certificate issued pursuant to Section 17.10.190 of this chapter applicable to the sales or service transaction. In determining whether an item or service is being purchased for resale without alteration in the regular course of the business of the buyer, the vendor shall be responsible to: (1) require the buyer to present the valid resale certificate and (2) verify that the resale certificate applies to the good or service being purchased [make a diligent inquiry into the purpose of the purchase by the buyer], and shall be held to the standard of inquiry expected of a reasonable and prudent person under similar circumstances acting in good faith toward the taxing authority.
“Seller” means every person making a retail sale transaction to a buyer or consumer, every person renting real or personal property, and every person performing services, for valuable consideration. In the event that retail sales transactions are being conducted in the name of a corporation, partnership, cooperative, association, joint venture, or other entity, the “seller” for purposes of responsibility and liability for the collection and remittance of sales tax shall include every director, officer and partner without exception, and also shall include every employee, agent and other person in a position of control and authority to collect and remit said sales taxes to the city.
“Selling price” means the fair market value of all detriment incurred by the buyer on the retail sale, including cash payments, debt obligations, and the value of exchanged items or services.
Used Exclusively for Religious Purposes. Retail sales and rentals of goods and services “used exclusively for religious purposes” means only goods, services or rentals which are used for, consumed in, or rendered only for the construction, alteration, maintenance, repair or outfitting of the following described property legally possessed by and used exclusively by a religious organization: the residence of a bishop, pastor, priest, rabbi, minister or religious order of a recognized religious organization; a structure, its furniture and its fixtures used solely for public worship, charitable purposes, religious administrative offices, religious education or a nonprofit hospital; lots supporting and adjacent to a structure or residence mentioned above in this subsection, which are necessary to convenient use of said structure or residence; and lots required by city ordinance for parking near a structure used solely for public worship, charitable purposes, religious administrative offices, religious education or a nonprofit hospital. (Ord. O-03-07-1 § 2, 2003; Ord. O-93-6-6 § 1 (part), 1994)
17.10.190 Resale certificate.
(a) No sale will be considered a “sale for resale without alteration” for purposes of taxation under this chapter unless, at the time of sale, the buyer presents the seller with a valid city resale certificate applicable to the good or service purchased.
(b) Any person may apply for a resale certificate by submitting an application on a form prepared by the city clerk together with an application fee of one-hundred fifty dollars. The form shall contain the following information:
(1) Name of applicant;
(2) Identification of the good or service the applicant intends to resell without alteration;
(3) Copy of the applicant’s city sales tax certificate;
(4) Description of the manner in which the good or service will be resold;
(5) Such other and further information reasonably requested by the city clerk.
(c) Upon receipt of a complete application, the city clerk or the clerk’s designee shall grant or deny the application in whole or in part within five business days from the date the application was submitted.
(d) Any applicant whose application is denied may appeal the denial to the city manager. The appeal shall be made in writing, state the reasons therefore and shall be submitted within ten calendar days fro the date of issuance of the city clerk’s decision.
(e) The city manager shall issue a written decision on an appeal no later than twenty calendar days from the date of receipt of the appeal. The city manager’s decision shall be final.
The applicant may appeal the city manager’s decision by filing a written notice of appeal with the Superior Court for the Second Judicial District of Nome, in accordance with court rules for administrative appeals. Any appeal must be filed no later than thirty days from the date of issuance of the city manager’s decision.
(f) The city clerk may issue regulations regarding resale certificates. Such regulations shall be approved by the city council by resolution.
(g) Resale certificates shall expire the end of each calendar year unless renewed. The renewal application fee shall be one-hundred fifty dollars. A renewal application shall identify any information that has changed since the date of the previous application. The city clerk may require submission of additional information with a renewal application. (Ord. O-03-07-1 § 3, 2003)