Title 4
REVENUE AND FINANCE

Chapters:

4.04 Budgetary Organization

4.05 Marine Passenger Fee Fund

4.06 Allocation of Revenues from Sale of Water

4.09 Sales Tax

4.12 Property Tax

4.16 Fuel Flow Tax

4.17 Driver Facility Charge

4.19 Sitka Permanent Fund

4.20 Miscellaneous Fees

4.24 Hotel, Motel and Bed and Breakfast Transient Room Tax

4.26 Excise Tax on Cigarettes and Tobacco Products

4.28 Investment Policy

4.32 Debt Service Priority

4.35 Delinquent Accounts

4.40 Uncollectable Accounts and Bad Debt Write-Offs

4.42 Small Business Guaranteed Loan Program

NOTE: Footnotes are numbered throughout the text and are located at the end of this title.

Chapter 4.04
BUDGETARY ORGANIZATION

Sections:

4.04.010 Funds, divisions and departments.

4.04.010 Funds, divisions and departments.

The following funds, divisions and departments of the city and borough are established:

FUND	DIVISION	DEPARTMENT
A. General	Administration	Administrator and Assembly
		Attorney
		Municipal Clerk
		Finance
		Assessing
		Planning
		General Office
		Other
	Public Safety	Police
		Fire
		Ambulance
		Search and Rescue
	Public Works	Administration
		Engineering
		Streets
		Recreation
		Building Officials
	Public Service	Library
		Centennial Building
		Convention and Visitors Bureau
		Senior Citizen Building
	Other	Debt Payments
		Support Payments
		Fixed Assets
		Transfers
B. Electric	Operations
C. Water	Operations
D. Wastewater Treatment	Operations
E. Solid Waste	Operations
F. Harbor	Operations
G. Airport Terminal	Operations
H. Marine Service Center	Operations
I. Sawmill Cove Industrial Park	Operations
J. Information Services	Operations
K. Central Garage	Operations
L. Building Maintenance	Operations
M. Special Revenue Funds as needed
N. Trust and Agency Funds as needed
O. General Fixed Assets Account Group
P. General Long-Term Debt Account Group
Q. Public School System
R. Hospital

(Ord. 06-31 § 4, 2006: Ord. 96-1387 § 4, 1996.)

Chapter 4.05
MARINE PASSENGER FEE FUND

Sections:

4.05.010 Establish fund.

4.05.020 Use of proceeds.

4.05.030 Procedures.

4.05.010 Establish fund.

A special revenue fund is established to accept the proceeds of the commercial passenger excise tax collected by the state of Alaska and passed through to the city and borough of Sitka. The proceeds shall be placed in the marine passenger fund. (Ord. 08-29 § 4 (part), 2008.)

4.05.020 Use of proceeds.

The proceeds of the marine passenger fund shall be appropriated to address the impacts caused by the marine passenger ship industry including:

A.  Design, construction, operation, or maintenance of capital improvements to relieve impacts of marine passenger ships and marine passengers;

B.  Operating funds for personnel, training, commodities, rentals, services and equipment for services provided, made available to, or required as a result of marine passenger ships and marine passengers;

C.  Projects and programs that promote safety, environmental improvements, or enforcement of laws caused or required by marine passenger ships and marine passengers;

D.  Acquisition of land required to execute the activities listed in this section;

E.  Beautification and enhancement of the facilities listed in this section;

F.  Surveys, analyses, polls, plans, monitoring, and similar efforts to measure, describe or predict, or manage the impacts of marine passenger ships and marine passengers, for items listed in this section.

(Ord. 08-29 § 4 (part), 2008.)

4.05.030 Procedures.

A.  Preparation of List. The administrator shall annually solicit for marine passenger fee project requests. The solicitation will be posted on the city and borough of Sitka website and published in a newspaper of general circulation no later than December 1st. The administrator shall annually, no later than January 1st, prepare a draft list of projects and programs proposed for funding in the city and borough budget for the following year by revenues from the passenger fee.

B.  The draft list shall be posted on the city and borough of Sitka website and forwarded to the cruise line industry, the Sitka convention and visitors bureau, the tourism committee, and the port and harbor committee not later than January 15th, providing an opportunity for the public, cruise line industry, and the three boards to review and comment on the draft list. The comment period shall close on February 15th. The administrator’s final recommendations will be posted on the city and borough of Sitka website and published in a newspaper of general circulation no later than March 1st.

C.  The administrator shall forward all submittals, cruise line industry comments, the three boards’ comments, public comments, and the administrator’s final recommendations to the assembly for consideration. The assembly will approve the recommendations during its deliberations on the annual city and borough budget.

D.  Funds shall be transferred or expended from the marine passenger fund only to the extent authorized by the assembly by ordinance.

(Ord. 08-29 § 4 (part), 2008.)

Chapter 4.06
ALLOCATION OF REVENUES FROM SALE OF WATER

Sections:

4.06.010 Allocation of revenues from bulk sales of water.

4.06.020 Allocation of revenues from sales of raw water at Sawmill Cove Industrial Park.

4.06.025 Allocation of revenues from sales of water at Sawmill Cove Industrial Park subject to the agreement to convey with Alaska Pulp Corporation.

4.06.030 Allocation of revenues from sales of treated water at Sawmill Cove Industrial Park.

4.06.010 Allocation of revenues from bulk sales of water.

Twenty-five percent of the revenues received by Sitka from bulk sales of water shall be deposited into the general fund. Half of the remainder of the revenues received by Sitka from bulk sales of water shall be deposited into the electric fund, and the other half of the remainder of the revenues received by Sitka from bulk sales of water shall be deposited into the water fund. This section does not apply to sales of water at Sawmill Cove Industrial Park. (Ord. 00-1582 § 4A (part), 2000.)

4.06.020 Allocation of revenues from sales of raw water at Sawmill Cove Industrial Park.

For five years starting on the effective date of the ordinance codified in this chapter, fifty percent of the revenues received by Sitka from the sales of raw water at Sawmill Cove Industrial Park shall be deposited into the Sawmill Cove Industrial Park enterprise fund and the remaining fifty percent of such revenues shall be deposited into the water fund. Upon the passage of five years the revenues received by Sitka from the sales of raw water at Sawmill Cove Industrial Park shall be deposited equally into the general fund, the electric fund, the water fund, and the Sawmill Cove Industrial Park enterprise fund. (Ord. 00-1582 § 4A (part), 2000.)

4.06.025 Allocation of revenues from sales of water at Sawmill Cove Industrial Park subject to the agreement to convey with Alaska Pulp Corporation.

Notwithstanding any other provision of law, fifty percent of the revenues received before April 6, 2009 from sales of raw water subject to Section 9 of the Agreement to Convey between Sitka and Alaska Pulp Corporation shall be paid to Alaska Pulp Corporation. Seventy-five percent of the remainder of the revenues described in the previous sentence shall be deposited in the Sawmill Cove Industrial Park enterprise fund, and twenty-five percent shall be deposited in the general fund. This section shall sunset and be of no further force and effect on April 6, 2009. (Ord. 00-1582 § 4A (part), 2000.)

4.06.030 Allocation of revenues from sales of treated water at Sawmill Cove Industrial Park.

All of the revenues received from the sales of treated water at Sawmill Cove Industrial Park shall be deposited into the water fund. (Ord. 00-1582 § 4A (part), 2000.)

Chapter 4.09
SALES TAX

Sections:

4.09.010 Levy of sales tax.

4.09.020 Collection of tax.

4.09.030 Presumption of taxability—Sales price and purchase price.

4.09.040 Separate statement of tax—No advertising to absorb or refund tax.

4.09.100 Exemptions.

4.09.110 Residence construction tax refund.

4.09.120 Exemption from seasonal sales tax increase.

4.09.210 Exempt sales.

4.09.220 Exempt certificate—Form.

4.09.230 Exemption certificate—Requirements.

4.09.240 Improper use of subject of purchase obtained with exemption certificate—Penalty.

4.09.250 Liability for payment of tax—Security for retailer without place of business—Penalty.

4.09.260 Method of accounting.

4.09.270 Returns—Payment—Authority of city and borough of Sitka.

4.09.280 Form of return.

4.09.285 Additional information required from holders of conditional use permits for short-term rentals in residential zones.

4.09.290 Substantiation of sales and exemptions.

4.09.300 Methods.

4.09.310 Deduction for bad debts.

4.09.320 Timely filing allowance.

4.09.330 Security—Limitations—Sales of security deposit at auction—Bond.

4.09.340 Taxpayer quitting business— Liability of successor.

4.09.350 Procedures on delinquencies.

4.09.360 Tax as debt.

4.09.370 Refunds and credits.

4.09.380 Period of limitation.

4.09.390 Taxes lien.

4.09.400 Rules and regulations.

4.09.405 Confidential and nonconfidential tax information.

4.09.410 Sales tax audits.

4.09.420 Definitions.

4.09.010 Levy of sales tax.

A.  There is levied a consumer’s sales tax on sales, rents, and leases made in the city and borough of Sitka. This tax applies to sales, rentals, and leases of tangible personal property; sales of services sold within the city and borough of Sitka; sales of services performed wholly or partially within the city and borough of Sitka when the provision of such services originates or terminates within the city and borough of Sitka; and rentals and leases of real property located within the city and borough of Sitka. Notwithstanding any provision of law, air or sea charter services, provided a person or entity in the business of providing such charter services, are exempt from sales tax by the city and borough of Sitka if the charter does not commence and end within the city and borough of Sitka.

B.  The rate of levy of the sales tax levied under subsection A of this section is five percent on sales made during the months of October, November, December, January, February, and March. Effective April 1, 2004, the rate of levy of the sales tax levied under subsection A of this section is six percent on sales made during the months of April, May, June, July, August, and September. The rate of levy of the sales tax shall become five percent all year around three days after the administrator certifies in writing to the assembly that either (a) any and all bonds issued pursuant to the ratification by the voters on March 18, 2003, of propositions set out in Ordinances Nos. 02-1707 and 02-1712 are entirely paid off or (b) the seasonal sales tax increase of one percentage point on sales made during the months of April, May, June, July, August, and September described in the previous sentence has generated (or – based on historical projections – will generate in the next succeeding quarter) sufficient revenues to pay off any and all bonds issued pursuant to the ratification by the voters on March 18, 2003, of propositions set out in Ordinances Nos. 02-1707 and 02-

      1712, whether or not such bonds have been paid off.

C.  A flat rate of ten dollars per fish box shall be levied on the packaged fish and/or seafood caught or taken and retained by fish charter customers as part of the fish charter. This tax shall be paid by the fish charter customer, collected by whoever packages the fish and/or seafood caught or taken by the fish charter customer, and is in addition to any sales tax paid based on the cost of the charter. This tax is effective January 1, 2007. For purposes of this subsection, a “fish box” means any packaging by a fish charter operator or processor of fish and/or seafood caught or taken as part of the charter by a fish charter customer. The sales tax collected from this levy on fish boxes shall be deposited by the finance director in the following funds in the following ratios:

1.   Twenty percent in the harbor fund;

2.   Thirty percent in the Sitka permanent fund;

3.   Twenty percent in a fisheries enhancement fund, available to be used for any fisheries enhancement proposal upon approval of the proposal by the assembly; and

4.   Thirty percent in the general fund.

D.  Except as provided in subsection C of this section, all moneys accumulated under the terms of this chapter shall be deposited by the finance director in the general fund of the city and borough of Sitka and shall be used for the general operating expenses of the city and borough of Sitka in such a proportion as deemed advisable from time to time by the assembly.

(Ord. 06-38 § 4, 2006: Ord. 03-1758 § 4(B), 2004.)

4.09.020 Collection of tax.

The tax described in Section 4.09.010(A) is imposed on the purchaser and must be collected by the seller and paid to the city and borough of Sitka by the seller as provided in Section 4.09.270. The seller holds all taxes collected in trust for the city and borough of Sitka. The tax must be applied to the sales price. (Ord. 03-1758 § 4(B), 2004.)

4.09.030 Presumption of taxability—Sales price and purchase price.

A.  In order to prevent evasion of the sales tax and to aid in its administration, it is presumed that:

1.   All sales by a person engaging in business are subject to the sales tax;

2.   All property purchased or sold by any person for delivery into the city and borough of Sitka is purchased or sold for a taxable use in the city and borough of Sitka;

3.   All liquor sales by lodges that hold an outdoor recreation liquor license under Alaska Statute 04.11.225 are considered individual sale units, and are taxable separately rather than as part of the lodge’s package sale.

B.  In a sale in which the amount of money paid does not represent the value of the property or service purchased, the sales tax must be imposed on the value of the property or service purchased.

C.  For purposes of this chapter, the sales price or purchase price of property must be determined as of the time of acquisition.

D.  For purposes of this chapter, a sale of services occurs at the time the services are provided.

(Ord. 06-19 (A-1) § 4(B) (part), 2006; Ord. 03-1758 § 4(B), 2004.)

4.09.040 Separate statement of tax—No advertising to absorb or refund tax.

A.  If any person collects a tax in excess of the tax imposed by Section 4.09.010(A), both the tax and the excess tax must be remitted to the city and borough of Sitka.

B.  The sales tax must be stated separately for all sales, except for sales from coin-operated or currency-operated machines, sales of drinks in a bar, sales on the dock, sales from street vending carts, admission fees, taxi fares, and other sales as determined by regulation by the assembly of the city and borough of Sitka.

(Ord. 03-1758 § 4(B), 2004.)

4.09.100 Exemptions.

The following sales are exempt from taxation:

A.  Casual Sales. A casual and isolated sale not made in the regular course of business is exempt from the levy of sales tax imposed by Section 4.09.010(A).

B.  Church Sales. Sale of tangible property or the sale of services by a church are exempt, except where the sale or service is incidental to a business for a profit.

C.  Court Fixed Fees. Any sale where the price is fixed by law, by a court of competent jurisdiction, or by other authority beyond the control of the seller, and where, if the tax were applied, in effect would become an income tax upon the seller, is exempt.

D.  Dues and Fees. Dues or fees paid clubs, labor unions and fraternal organizations are exempt.

E.  Federal and State Prohibitions. A sale which the municipality is prohibited from taxing under the Constitution and laws of the United State or the Constitution of the state of Alaska is exempt.

F.  Freight and Wharfage. Freight and wharfage charges, whether arising out of foreign, interstate or intrastate commerce, are exempt. Warehouse and storage services are taxable.

G.  Governmental Agencies. A sale directly to the United States government, the state of Alaska and its political subdivisions, the city and borough, or any departments thereof, is exempt. Any sale made to Sitka Tribe of Alaska made on or after January 1, 2002, is exempt.

H.  Insurance. The sale of insurance policies, guaranty bonds, and fidelity bonds are exempt.

I.  Loans. The loaning of money and interest charged for loans is exempt.

J.  Medical and Veterinary Services. Medical, dental, hospital, and veterinary services are exempt. The sale of hearing aids and medicinal preparations when prescribed by a licensed practitioner are exempt. Medical, dental, hospital, and veterinary services do not include services rendered by chiropodists, barbers, cosmeticians, masseurs, nor do they include the clipping, grooming, or boarding of animals.

K.  Newspapers. The sale of daily newspapers to a consumer is exempt.

L.  Nonprofit Charitable Organizations. Sales made by nonprofit charitable organizations which do not have paid employees and which do not keep normal business hours are exempt.

M.  Outside City and Borough. Sales of goods or services resulting from orders received from outside the city and borough by mail, telephone, or other similar public communication where delivery of the property ordered is made outside the city and borough by mail or common carrier are exempt.

N.  Over One Thousand Dollars on Sales and Rents of Tangible Personal Property and on Sales of Services, and Over One Thousand Dollars in Rent or Lease of Real Property on a Monthly Basis. That portion of a selling price for a single piece of equipment or tangible personal property or sale unit in excess of one thousand dollars is exempt. A single sale unit is:

1.   Any retail merchandise sale where the selling price is totaled on one invoice or any sales slip, although this exemption does not apply if any portion of the invoice or sales slip refers to more than one business day;

2.   Any sale of services sold by an individual unit price; or

3.   Any liquor sale by lodges that hold an outdoor recreation lodge liquor license.

Notwithstanding any other provision of law, the exemption described in this subsection does not apply to any “running” invoice or sales slip representing the sale of items or commodities which are not services. The exemption described in this subsection applies to any sales of services in which services provided to more than one individual are packaged together or “bundled” for purposes of payment on one invoice or sales slip to the extent that such individuals are members of the immediate family of the person making the payment and the person making the payment provides to the seller a certification of such relationship on a form provided by the city and borough. For purposes of this subsection, “members of the immediate family” are the individual’s spouse, children, parents, parents-in-law, siblings, grandparents, and grandchildren. Notwithstanding any other provision of law, if a seller can provide an invoice prepared no later than March 31, 2004, and evidence of an accompanying deposit of money that was received by the seller no later than March 31, 2004, as a down payment on the selling price for a single piece of equipment or tangible personal property or a single sale unit, the changes enacted by this subsection do not apply.

O.  Public Food. The sale of food and beverages to the public in a school district or college cafeteria or lunchroom which are operated primarily for teachers and students and not for profit is exempt.

P.  Resale. A sale for resale of a product, service or rental to a consumer where the resale is subject to tax is exempt.

Q.  Student Transportation. The service of transporting students to and from a school in vehicles is exempt.

R.  Telephone and Telegraph. Telephone conversations and telegraph messages are exempt. Telephone service to subscribers residing within the city and borough is taxable.

S.  Service Performed by a Licensed Undertaker or Mortician. Fees charged by a licensed undertaker or mortician for services and goods supplied in the course of the undertaking business are exempt.

T.  Long-Term Motor Vehicle and Equipment Rentals. The long-term lease or rental of motor vehicles and equipment is exempt. “Long-term” is defined as being a period of at least thirty consecutive days.

U.  Exemption for Games of Skill and Chance. Sales of lottery tickets and other forms of games of skill and chance allowed under Section 10.40.020 are exempt.

V.  Government-Funded Agencies. Nonprofit organizations that qualify as tax exempt under IRC section 501(c) and derive fifty percent or more of their gross revenue from local, state, or federal government sources are exempt from paying sales tax if:

1.   In order to qualify for this exemption an organization must file an annual report setting out its qualifications; and

2.   Any initial application for exemption shall become effective thirty days after the date of its filing.

W.  Child Care. The sale of child care services is exempt.

X.  Public Transportation. Fees for public transportation are exempt if agency providing public transportation qualifies under subsection V of this section, Government-Funded Agencies.

Y.  Exemption for Retired Persons Who Have Reached the Age of Sixty-Five.

1.   Any retired person, sixty-five years of age or older, who is a resident of the state of Alaska, may apply for and be issued by the finance director a senior citizen sales tax exemption card which entitles the cardholder and the cardholder’s spouse to be exempt from sale tax for the purchase of goods, services or rentals which are solely for the personal use or consumption of the cardholder or the cardholder’s spouse. This exemption does not apply for purchases for the cardholder or the cardholder’s spouse business venture(s), including but not limited to commercial fishing.

2.   Definitions.

a.   To be considered “retired” under this section, both the applicant and spouse must be substantially out of the labor force or, if still working nearly full time, the pay received must be at a reduced rate from what the person earned previously.

b.   As used in this section, “resident of the state of Alaska” means a person who is physically present in the state with the intent to remain in the state indefinitely and to make a home in the state.

3.   Verification.

a.   The applicant, at the time of application for a senior citizen sales tax exemption card, will provide a minimum of two pieces of identification to prove Alaska residency. One of the identification documents must show birth date.

b.   The applicant shall fill out a formal application which will include a verification of their “intent to reside in Alaska.”

4.   No seller shall charge or collect a sales tax on such a sale from any person who displays to the seller at the time of sale such a valid registration card unless the seller knows or has reason to know that the card is being presented in violation of this section.

5.   A seller shall keep a record on any and all such exempt sales and shall submit to the municipality quarterly totals of such sales. A seller shall pay the sales tax on any such sale otherwise exempt but for which such exemption record has not been thus kept and submitted.

6.   No person who has duly applied for and received such a registration card may use it to obtain such tax exemption unless the purchased item is used or consumed by the person duly holding such registration card or his or her spouse.

7.   Violation of this section is a misdemeanor punishable by a fine of not more than three hundred dollars or by imprisonment for not more than thirty days or by both; additionally, the court may order that a registration card which has been used in a violation shall be surrendered to the court, which, in turn, shall return the card to the finance director for cancellation and destruction. A person who has his or her tax exemption registration card thus canceled and destroyed shall not, for period of no less than one year after the court determination of violation, be eligible to apply for or receive a new tax exemption registration card.

8.   A resident at least sixty years old, who otherwise qualifies for the exemption, and is the widow or widower of a person who qualified for the exemption under subsection A of this section, may apply for and be issued a senior citizen sales tax exemption card.

Z.  Exemption of Housing for Students Attending the Sitka Fine Arts Camp. Housing for students attending the Sitka Fine Arts Camp is exempt from the sales tax.

AA. Residential Rent. Rent paid for residential housing for thirty or more consecutive days or an entire calendar month by a person or persons for a room, set of rooms, structure, or suite is exempt from sales taxes. This exemption does not apply to any transaction taxable under Chapter 4.24 regarding the hotel, motel, and bed and breakfast transient room tax.

(Ord. 08-04 § 4, 2008; Ord. 07-12 § 4 (part), 2007; Ord. 06-19 (A-1) § 4(B) (part), 2006; Ord. 04-19 § 4(A), 2004; Ord. 03-1758 § 4(B), 2004.)

4.09.110 Residence construction tax refund.

Upon proper application the city and borough will refund sales tax paid on the construction of an owner-occupied single-family dwelling or duplex.

A.  The dwelling must be a new dwelling unit, not merely an extension of an existing unit. Construction must have begun and a building permit secured after April 22, 1980.

B.  At the time of refund application applicant must be residing in the dwelling, the dwelling must be certified ready for occupancy by the building official and less than one year shall have passed since the issuance of the building permit. No refund shall be made for items purchased prior to the issuance of the building permit. No sales tax paid to businesses outside of the city and borough shall be refunded.

C.  The refund shall be the amount of sales tax actually paid for materials and services used in the construction of the dwelling. This shall include lumber, building materials, electrical and plumbing supplies or services, furnace and other heating apparatus and permanent carpeting and major appliances, such as kitchen stove, refrigerator, washer, dryer and freezer. Items not included are throw rugs, televisions, furniture, drapery, pictures and minor appliances, not built into the building. Also not included are tools and machinery purchased to use in the construction of the dwelling, nor shall it include spare material(s) not used.

D.  Upon application for a refund the applicant shall certify, under penalty of perjury:

1.   The sales tax requested to be refunded has actually already been paid to the supplier;

2.   That all items for which a refund is requested were consumed in the construction of the dwelling or have actually been installed in the dwelling.

E.  Applications for refund shall be made to the finance director and shall be supported by detailed invoices. The finance director will disallow unsupported application or portions thereof. Appeals may be made to the assembly.

(Ord. 03-1758 § 4(B), 2004.)

4.09.120 Exemption from seasonal sales tax increase.

The following retail sales are exempt from any increase in the sales tax imposed on a seasonal basis, including the one percentage point increase for the months of April, May, June, July, August, and September set out in Section 4.09.010(B):

A.  Rentals of Real Property. Rent paid as consideration for the use of real property either for thirty or more consecutive days or an entire calendar month by a person or persons of a room, set of rooms, structure, or suite is exempt from the additional one percent increase for the months of April, May, June, July, August and September. This exemption does not apply to any transaction taxable under the hotel, motel, and bed and breakfast transient room tax set out in Chapter 4.24.

(Ord. 03-1758 § 4(B), 2004.)

4.09.210 Exempt sales.

All exempt sales under Section 4.09.100 must be documented in an invoice. The city and borough of Sitka shall prescribe on a form issued by the finance director the requirement for an invoice. (Ord. 03-1758 § 4(B), 2004.)

4.09.220 Exempt certificate—Form.

A.  The city and borough of Sitka shall provide for a uniform exemption certificate. A purchaser shall use the certificate when purchasing goods, or services for resale or for other exempt transactions.

B.  The certificate must include:

1.   The general character of property or service sold by the purchaser in the regular course of business;

2.   The name and address of the purchaser; and

3.   The signature or electronic signature of the purchaser.

(Ord. 03-1758 § 4(B), 2004.)

4.09.230 Exemption certificate—Requirements.

A.  An exemption certificate executed by a purchaser or lessee must be in the possession of the purchaser or lessee at the time that an exempt transaction occurs.

B.  An exemption certificate must contain the information and be in a format prescribed by the city and borough of Sitka.

C.  If the seller or lessor accepts an exemption certificate and believes in good faith that the purchaser or lessee will employ the property or service transferred in an exempt manner, the properly executed exemption certificate is considered conclusive evidence, as to the seller or lessor, that the sale is exempt.

(Ord. 03-1758 § 4(B), 2004.)

4.09.240 Improper use of subject of purchase obtained with exemption certificate—Penalty.

A.  If a purchaser who uses an exemption certificate uses the subject of the purchase for a purpose other than one allowed as exempt under this chapter, the sale is considered a taxable sale as of the time of first use by the purchaser, and the sales price is the price that the purchaser paid. If the sole nonexempt use is rental while holding for sale, the purchaser shall include in the sales price the amount of the rental charged. Upon subsequent sale of the property, the seller shall include the entire amount of the sales price, without deduction of amounts previously received as rentals.

B.  A person who uses an exemption certificate for property that will be used for purposes other than the purpose claimed is subject to a penalty, payable to the city and borough of Sitka, of one hundred dollars or one hundred percent of the tax due, whichever is greater, for each transaction in which an improper use of a certificate has occurred.

(Ord. 03-1758 § 4(B), 2004.)

4.09.250 Liability for payment of tax—Security for retailer without place of business—Penalty.

A.  Liability for the payment of the sales tax is not extinguished until the taxes have been paid to the department.

B.  A retailer who does not maintain an office or other place of business in the city and borough of Sitka is liable for the sales tax on all property sold or leased and services provided in the city and borough of Sitka in accordance with this chapter and may be required to furnish adequate security to ensure collection and payment of the taxes. When authorized and except as otherwise provided in this chapter, the retailer is liable for the taxes on all property sold and services provided in the city and borough of Sitka in the same manner as a retailer who maintains an office or other place of business in the city and borough of Sitka.

(Ord. 03-1758 § 4(B), 2004.)

4.09.260 Method of accounting.

A person shall report and pay the sales tax using the same method of accounting that the person uses for federal tax purposes. (Ord. 03-1758 § 4(B), 2004.)

4.09.270 Returns—Payment—Authority of city and borough of Sitka.

A.  A person who has a tax liability under Section 4.09.010 shall file a return on a form or in a format prescribed by the city and borough of Sitka and pay the tax due quarterly. The return shall be filed and the tax paid on or before the last day following the end of the quarter for which the tax is due. Each person engaged in business in the city and borough of Sitka is subject to taxation under Section 4.09.010 shall file a return in accordance with the following:

1.   Quarterly. Unless as otherwise provided for in this section, sellers shall on or before the last day of the month succeeding the end of each quarter year ending March 31st, June 30th, September 30th, and December 31st, prepare a return for the preceding quarter year. Returns shall be filed personally, with the finance department by 4:45 p.m. or postmarked on the last day of the month following the end of each quarter year. In the event the last day of the month falls on a legal holiday, Saturday, or Sunday, then the return may be filed on the first business day following.

2.   Monthly. If a seller fails to file or is late in filing returns for two of the last four quarters, the finance director will require the seller to submit returns and payment each month.

3.   Yearly. If a seller submits within the dates required for the four quarterly returns for a calendar year and the total amount collected and remitted to the city and borough of Sitka is two hundred dollars or less, seller may request in writing to the finance director, to file a sales tax return once a year for the previous calendar year. The yearly sales tax return is due on January 31st of each year. If total sales tax collected and/or remitted to the city and borough of Sitka exceeds two hundred dollars, seller will be required to file quarterly sales tax returns for future sales. If seller fails to file yearly sales tax return by due date, seller will be required to file and remit sales tax quarterly. If the seller fails to file yearly sales tax return and the amount of sales tax collected during the period of the return exceeds five hundred dollars, seller will be required to submit sales tax returns and remit sales tax to the city and borough of Sitka monthly for a minimum of one year.

4.   Itinerant Seller. A person doing business within the city and borough of Sitka 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 shown as due within twenty-four hours following the expiration of his license, but in any event prior to leaving the city and borough of Sitka.

5.   Filing to be Continuous. A person who has filed a sales tax return will be presumed to be making sales in successive quarters unless the person files a return showing termination or sale of their business.

B.  For the purposes of the sales tax, a return must be filed by a retailer required to collect the tax.

C.  Each return must be authenticated by the person filing the return or by the person’s agent authorized in writing to file the return.

(Ord. 03-1758 § 4(B), 2004.)

4.09.280 Form of return.

On forms furnished by the city and borough of Sitka, the seller shall furnish the following information, sign the form and certify that it correctly states the information purportedly set forth:

A.  Total sale divided into the following categories:

1.   Retail and wholesale sales,

2.   Services rendered, including materials,

3.   Rentals of property or equipment;

B.  All exemptions listed in Section 4.09.100 will be listed on the form separately by exemption category;

C.  The amount of any refund which the seller wishes to claim for tax paid on purchases made for resale and attachment of “Application for Sales Tax Refund” forms indicating payment of the amount;

D.  The amount of tax due;

E.  Such other information as may be reasonably required.

(Ord. 07-04 § 4(A) (part), 2007: Ord. 03-1758 § 4(B), 2004.)

4.09.285 Additional information required from holders of conditional use permits for short-term rentals in residential zones.

Between June 16, 2005, and January 31, 2006, all holders of conditional use permits for short term rentals in residential zones shall submit with each quarterly sales tax return on a form provided by the city and borough information relating to those rentals. The information to be submitted on the form shall include the property owner’s name, the address of the property, the type of structure, the number of approved rooms, the number of days each dwelling unit is rented on a short-term basis by month, and any status such as relinquishment of the permit. The information submitted with the quarterly return due on or before July 31, 2005, shall include information on both the first and second quarters of 2005. The

finance department may share the information gathered with the planning department under the same restrictions of confidentiality that the finance department holds other tax information that discloses the particulars of a business. (Ord. 05-27 § 4(A), 2005.)

4.09.290 Substantiation of sales and exemptions.

The seller shall maintain records that will substantiate all amounts listed on the returns filed with the city and borough and include the following information needed by line item:

A.  Gross receipts should at a minimum provide documentation for the following sales:

1.   Retail and wholesale sales,

2.   Services rendered, including materials,

3.   Rentals of property or equipment;

B.  A substantiation of sales exempt under Section 4.09.100(M), Outside City and Borough, by a listing of:

1.   The amount of sales or group of similar sale,

2.   The means by which the order was received,

3.   The point to which the sale was delivered,

4.   The means of transportation used for delivery of the goods;

C.  A substantiation of sales exempt under Section 4.09.100(G), Governmental Agencies;

D.  A substantiation of sales exempt under Section 4.09.100(P), Resale;

E.  A substantiation of the balance of all retail sales claimed exempt under Section 4.09.100(N), Over One Thousand Dollars on Sales and Rents of Tangible Personal Property and on Sales of Services, and Over One Thousand Dollars in Rent or Lease of Real Property on a Monthly Basis, by a listing of each sale and the amount of each which was not taxable;

F.  A substantiation of sales exempt from the tax under Section 4.09.100(Y), Exemption for Retired Persons Who Have Reached the Age of Sixty-Five, that lists:

1.   Senior exemption number provided by the city and borough of Sitka to the senior citizen,

2.   Name of senior citizen;

G.  A substantiation of all other sales claimed exempt by documenting each exemption separately.

(Ord. 03-1758 § 4(B), 2004.)

4.09.300 Methods.

A.  The city and borough of Sitka shall adopt regulations providing for payment of the sales tax based on a rounding method.

B.  The city and borough of Sitka may use sampling principles or methods in lieu of one hundred percent examination of records in conducting a sales tax audit.

(Ord. 03-1758 § 4(B), 2004.)

4.09.310 Deduction for bad debts.

A.  A person filing a return under Section 4.09.280 may deduct sales found to be worthless. The bad debt may be deducted when it:

1.   Is written off as uncollectible in the person’s books and records; and

2.   Qualifies as a deduction for federal income tax purposes under 26 U.S.C. (Internal Revenue Code).

B.  If the amount of bad debt exceeds the amount of taxable sales during the period that the bad debt is written off, a person may file a refund claim with the city and borough of Sitka.

C.  If a bad debt deducted under subsection A of this section is subsequently collected, the person who claimed the deduction shall pay the tax levied under Section 4.09.010 on the amount collected. For purposes of this subsection, any payments made on a debt or account are applied:

1.   First to the taxable price of the property or service and the tax levied under Section 4.09.010 on the property or service; then

2.   To interest, service charges, and any other charges.

D.  A person filing a return under Section 4.09.280 may deduct any bad debt that occurred after January 1, 1999, through December 31, 2003, on any return due during the 2004 calendar year. Bad debts that occur during the 2004 calendar year may be deducted on the first quarter return in 2005 and thereafter each first quarter return will be used to declare the previous year’s bad debts.

(Ord. 03-1758 § 4(B), 2004.)

4.09.320 Timely filing allowance.

A.  A person filing a return under Section 4.09.270 may claim an allowance in the amount of three percent of the tax determined to be payable to the city and borough of Sitka or one hundred dollars a quarter, whichever is less, if the return is timely filed and the tax is timely paid provided:

1.   The person remits within the first fifteen days of the second month of the quarter the actual tax collected during the first month of the quarter or one-third of the total tax remitted during the previous quarter (or, if seasonal fluctuations in gross business receipts exist, not less than one-third of the total tax remitted during the same quarter of the previous year); and

2.   The person remits within the first fifteen days of the third month of the quarter the actual tax collected during the second month of the quarter or one-third of the total tax remitted during the previous quarter (or, if seasonal fluctuations in gross business receipts exist, not less than one-third of the total tax remitted during the same quarter of the previous year); and

3.   The person files a return and remits the balance of the tax due as required in Section 4.09.270.

B.  The allowance may be deducted on the return. The allowance may not be greater than the tax determined to be payable to the city and borough of Sitka.

(Ord. 03-1758 § 4(B), 2004.)

4.09.330 Security—Limitations—Sales of security deposit at auction—Bond.

A.  The city and borough of Sitka may require a retailer to deposit with the city and borough of Sitka security in a form and amount that the city and borough of Sitka determines is appropriate. The deposit may not be more than twice the estimated average liability for the period for which the return is required to be filed or ten thousand dollars, whichever is less. The amount of security may be increased or decreased by the city and borough of Sitka, subject to the limitations provided in this section.

B.  If necessary, the city and borough of Sitka may sell at public auction property deposited as security to recover a sales tax or use tax amount required to be collected, including interest and penalties. Notice of the sale must be served personally on or sent by certified mail to the person who deposited the security. After the sale, any surplus above the amount due that is not required as security under this section must be returned to the person who deposited the security.

C.  In lieu of security, the city and borough of Sitka will require a retailer to file a bond issued by a surety company authorized to transact business in the state of Alaska to guarantee solvency and responsibility if such retailer failed to remit sales tax on a previous business to the city and borough of Sitka.

D.  In addition to the other requirements of this section, the city and borough of Sitka will require the corporate officers, directors, or shareholders of a corporation to provide a personal guaranty and assumption of liability for the payment of the tax due under this chapter.

E.  Appeals may be made to the assembly on the requirement to file a bond issued by a surety company.

(Ord. 03-1758 § 4(B), 2004.)

4.09.340 Taxpayer quitting business—Liability of successor.

A.  All taxes payable under this chapter are due and payable immediately whenever a taxpayer quits business, sells, exchanges, or otherwise disposes of the business or disposes of the stock of goods. The taxpayer shall make a return and pay the taxes due within ten days after the taxpayer quits business, sells, exchanges, or otherwise disposes of the business or disposes of the stock of goods.

B.  Except as provided in subsection D of this section, a person who becomes a successor in the taxpayer’s business or stock of goods is liable for the full amount of the tax and shall withhold from the sales price payable to the taxpayer a sum sufficient to pay any tax due until the taxpayer produces either a receipt from the city and borough of Sitka showing payment in full of any tax due or a statement from the city and borough of Sitka that tax is not due.

C.  If a tax is due but has not been paid as provided in subsection A of this section, the successor is liable for the payment of the full amount of tax. The payment of the tax by the successor is considered to be a payment on the sales price and, if the payment is greater in amount than the sales price, the amount of the difference becomes a debt due to the successor from the taxpayer owing the tax under subsection A of this section.

D.  A successor is not liable for any tax due from the person from who the successor acquired a business or stock of goods if:

1.   The successor gives written notice to the city and borough of Sitka of the acquisition; and

2.   An assessment is not issued by the city and borough of Sitka against the former operator of the business within three months after receipt of the notice from the successor. If an assessment is issued by the city and borough of Sitka and a copy of the assessment is not mailed to the successor, the successor is not liable for the tax due.

(Ord. 03-1758 § 4(B), 2004.)

4.09.350 Procedures on delinquencies.

A.  Penalty and interest will be assessed as follows:

1.   If the seller does not file the proper forms and or remit the sales tax then due on the dates listed in Section 4.09.270, a penalty equal to five percent of the delinquent tax, but in no event less than fifteen dollars, shall be added to the tax for the first month or any part thereof, and an additional five percent shall be added to the tax due for each month or fraction thereof for delinquency until a total penalty of twenty-five percent has accrued. It shall be assessed and collected in the same manner as the tax is assessed and collected. The minimum penalty amount for the second month will be twenty-five dollars. The minimum penalty amount for the third month will be fifty dollars and the minimum penalty amount for the failure to file the proper forms and or remit the sales tax after ninety days after due date will be one hundred dollars.

2.   In addition to the penalty provided in subsection (A)(1) of this section, interest at the rate of twelve percent per year on the delinquent tax from the date of delinquency until paid shall accrue and be collected in the same manner as the delinquent tax is collected.

B.  Written Demand and Additional Procedures. If a seller fails to file the return or make the remittance in accordance with Section 4.09.270, the finance director shall make written demand upon the seller, mailed to his last known address, for submission of the return and/or remittance. In the event of noncompliance with the demand, the finance director may do any or all of the following actions:

1.   Criminal Action. File a criminal complaint against the seller in the district court for violation of Section 4.09.270;

2.   Civil Action. Make a sales tax assessment against the seller, with the assessment based upon an estimate of the gross revenue received by the seller during the period and institute civil action to recover the amount of the tax. The estimate of gross revenue shall be derived from past returns of the seller, the general economic level on the business community and, if available, returns of comparable businesses;

3.   Hearing. Notify the seller in writing by certified mail that a hearing will be held to determine the sales tax liability of the seller at a specified time and place not less than fifteen days after the date of the notice. The seller shall present himself at the hearing and make available for inspection his books, papers, records, and other memoranda pertaining to gross revenues derived from his commercial transactions sufficient to enable the city and borough of Sitka to make a determination whether the return is required or tax due;

4.   Publish. Publish in a newspaper of general circulation within the city and borough of Sitka the name and amount of sales tax due, if any, of a person convicted of the crime of violating this chapter or a person against whom the city and borough of Sitka has recovered a judgment for unpaid sales tax.

C.  Waiver of Penalties. The administrator shall waive the penalties on failure to submit tax returns if:

1.   The seller submits a written request to the administrator;

2.   The submitted returns have no taxable sales and no taxable events under the bed tax set out in Chapter 4.24; and

3.   The finance director verifies that the seller has never filed a tax return regarding sales tax or bed tax with the city and borough of Sitka.

(Ord. 03-1758 § 4(B), 2004.)

4.09.360 Tax as debt.

A.  The tax imposed by this chapter and related interest and penalties become a personal debt of the person required to file a return from the time the liability arises, regardless of when the time for payment of the liability occurs.

B.  If the personal representative of an estate has voluntarily distributed the assets held in that capacity without reserving sufficient assets to pay the taxes, interest, and penalties, the personal representative is personally liable for any deficiency, to the extent permitted under AS 13.16.

C.  This section applies to corporate officers, directors, or shareholders required by the city and borough of Sitka to personally guarantee the payment of the taxes for their corporation. The officer or employee of a corporation whose duty it is to collect, truthfully account for, and pay to the city and borough of Sitka the taxes imposed by this chapter and who fails to pay the taxes is liable to the city and borough of Sitka for the taxes imposed by this chapter and the penalty and interest due on the taxes.

(Ord. 03-1758 § 4(B), 2004.)

4.09.370 Refunds and credits.

The city and borough of Sitka may credit or refund overpayments of taxes, taxes erroneously or illegally assessed or collected, penalties collected without authority, and taxes that are found unjustly assessed or excessive in amount, or otherwise wrongfully collected. The city and borough of Sitka shall set limitations, specify the manner in which claims for credits or refunds are made, and give notice of allowance or disallowance. When a refund is allowed to a taxpayer, it shall be paid out of the general fund on a warrant issued under a voucher approved by the city and borough of Sitka. (Ord. 03-1758 § 4(B), 2004.)

4.09.380 Period of limitation.

The amount of any tax imposed under this chapter may be determined and assessed at any time within a period of six years after the tax became due and payable. The period shall begin on the date when a return is required to be filed. Where no return has been filed, then the period does not begin to run until the discovery of the delinquency occurs. No suit or other proceeding for the collection of the tax shall be begun after the expiration of the period. (Ord. 03-1758 § 4(B), 2004.)

4.09.390 Taxes lien.

The tax, interest and penalty imposed under this chapter shall constitute a lien in favor of the city and borough of Sitka upon all property of the person owing the tax. This lien arises upon delinquency and continues until the liability is satisfied or the lien is foreclosed. When recorded, the lien authorized under this section shall have priority over all other liens, except those for property taxes and special assessments. (Ord. 03-1758 § 4(B), 2004.)

4.09.400 Rules and regulations.

The finance director shall from time to time cause to be promulgated rules and regulations as are necessary and advisable to provide for the application and interpretation of this chapter and to submit them to the assembly for its adoption or rejection, and to cause to be provided methods and forms for reporting and collecting the tax in accordance with this chapter and regulations. (Ord. 03-1758 § 4(B), 2004.)

4.09.405 Confidential and nonconfidential tax information.

A.  The following information is publicly available information:

1.   Names and addresses of business owners who have filed tax returns under this chapter;

2.   Whether a business is registered to collect taxes under this chapter in the city and borough of Sitka;

3.   Whether a business is current in tax returns and in remitting sales tax due under this chapter, and the number of returns not filed; and

4.   Names and exemption numbers of governmental agencies and government funded agencies which have received a tax-exempt number from the city and borough of Sitka relating to taxes due under this chapter.

B.  The city and borough of Sitka may permit any authorized representative of any federal, state or other local government agency to inspect and copy any tax returns filed and reports prepared under this chapter, if the other governmental agency provides substantially similar access to the city and borough of Sitka and if the city and borough of Sitka determines that other governmental agency provides adequate safeguards for the confidentiality of the tax returns and reports.

C.  Except as otherwise provided in this section, tax forms and their contents shall be confidential and shall not be disclosed by the finance department except:

1.   In connection with efforts by the city and borough of Sitka to collect the tax;

2.   In response to a subpoena issued by a court, state agency or governmental board or commission;

3.   In connection with legislative inquiry specifically authorized by the assembly;

4.   In connection with the city and borough of Sitka audits for purposes of verifying city and borough of Sitka accounting practices;

5.   In compilation of statistics and studies by the finance department for public distribution, so long as information from individual businesses is not identifiable as to source. (Ord. 07-04 § 4(A) (part), 2007.)

4.09.410 Sales tax audits.

A.  Any seller who has established a sales tax account with the city and borough of Sitka, who is required to collect and remit sales tax, or who is required to submit a sales tax return under the provision of Section 4.09.270 is subject to a discretionary sales tax audit at any time. The purpose of such an audit is to examine the business records of the seller in order to determine whether appropriate amounts of sales tax revenue have been collected by the seller and remitted to the city and borough of Sitka.

B.  The finance director shall be responsible for directing that sales tax audits take place and for selecting the particular sellers whose business records will be audited.

C.  Sales tax audits of seller’s business records may be accomplished by either an employee of the city and borough of Sitka’s finance department or by an individual or firm under contract with the city and borough of Sitka.

D.  Sellers selected for a sales tax audit will be notified by letter and will be required to meet with, and make available for inspection and copying all pertinent business records including income tax returns that may be requested for the prior six fiscal years for examination, to the finance department employee, or contractor conducting the audit, within thirty days of notification. Under extenuating circumstances, the finance director may grant an extension of time for compliance at the director’s discretion.

E.  After completion of a sales tax audit, sellers subject to the audit will be notified of the results of the audit by letter. If the audit has resulted in an additional sales tax liability to the city and borough of Sitka, the additional sales tax must be remitted to the city and borough of Sitka within fourteen days after the receipt of the letter, or the additional sales tax will be considered delinquent and subject to the procedures on delinquencies outlined in Section 4.09.350. If the audit has resulted in a refund due the seller, the refund will be sent to the seller within fourteen days, or applied to the seller’s account, at the seller’s option.

F.  It shall be the seller’s responsibility to maintain business records in sufficient detail to substantiate all information reported on sales tax returns, including sales qualifying as retail sales exempt from taxation under the provision of Section 4.09.100. If insufficient detail exists within a seller’s business records to substantiate retail sales exemptions, such sales will be reclassified as taxable sales and subject to sales tax collection and remittance.

G.  Any seller notified of an additional sales tax liability as a result of a sales tax audit shall have the right to appeal the additional liability to the assembly. Such an appeal must be filed with the municipal clerk within thirty days of notification by letter of the liability. If an additional liability is appealed, the accumulation of penalties and interest under the provisions of Section 4.09.350 will be suspended on the date the appeal is filed with the municipal clerk; if the appeal is subsequently denied by the assembly, all such penalties and interest will be retroactive back to the original date of notification of additional liability by letter.

H.  Any seller refusing to comply with the provisions of this section shall be subject to any or all of the procedures on delinquencies as outlined in Section 4.09.350, including the filing of a criminal complaint against the seller in district court.

(Ord. 03-1758 § 4(B), 2004.)

4.09.420 Definitions.

In this chapter:

A.  “Consideration” means a valuable inducement and includes, without limitation, money, property, and services;

B.  “Engaging in business” means carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit;

C.  “Lease,” “leasing,” or “rental,” regardless of whether a transaction is characterized as a lease or rental under generally accepted accounting principles, 26 U.S.C. (Internal Revenue Code), AS 45.01 through AS 45.08, AS 45.12, AS 45.14, and AS 45.29 (Uniform Commercial Code), or other provisions of federal, state, or local law:

1.   Means a transfer of possession or control of tangible personal property of a fixed or indeterminate term for consideration; a lease or rental may include future options to purchase or extend;

2.   Does not include:

a.   A transfer of possession or control of property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments;

b.   A transfer of possession or control of property under an agreement that requires the transfer of title upon completion of required payments if payment of an option price does not exceed the greater of one hundred dollars or one percent of the total required payments; or

c.   Providing tangible personal property along with an operator for a fixed or indeterminate period of time; a condition of this exclusion is that the operator is necessary for the equipment to perform as designed; for the purpose of this subsection, an operator must do more than maintain, inspect, or set up the tangible personal property;

3.   Includes agreements covering motor vehicles and trailers if the amount of consideration may be increased or decreased by reference to the amount realized upon sale or disposition of the property as defined in 26 U.S.C. 7701(h)(1);

D.  “Maintaining an office or other place of business” means:

1.   A person’s having or maintaining in the city and borough of Sitka, directly or by an affiliate, an office, distribution house, sales house, warehouse, or place of business; or

2.   An agent’s operating within the city and borough of Sitka under the authority of the person or its affiliate, whether the place of business or agent is located in the city and borough of Sitka permanently or temporarily or whether the person or affiliate is authorized to do business in the city and borough of Sitka;

E.  “Manufacturing” means combining or processing components or materials, including the processing of ores in a mill, smelter, refinery, or reduction facility, to increase the value of the components or materials for sale in the ordinary course of business; “manufacturing” does not include construction;

F.  “Person” means an individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate, or other entity, including a gas, water, or electric utility owned or operated by a borough, municipality, or other political subdivision of the state;

G.  “Purchase price” means “sales price” and applies to the measure subject to sales tax;

H.  Residential Rent. Rent paid for residential housing for thirty or more consecutive days or an entire calendar month by a person or persons for a room, set of rooms, structure, or suite is exempt from sales taxes. This exemption does not apply to any transaction taxable under Chapter 4.24 regarding the hotel, motel, and bed and breakfast transient room tax;

I.  “Sale,” “selling,” or “purchasing” means the transfer of property for consideration or the performance of a service for consideration;

J.  “Sales price”:

1.   Means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:

a.   The seller’s cost of the property sold;

b.   The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;

c.   Charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;

d.   Delivery charges;

e.   Installation charges;

f.   The value of exempt personal property given to the purchaser where taxable and exempt personal property have been bundled together and sold by the seller as a single product or piece of merchandise;

g.   Credit for a trade-in, as determined by state law;

2.   Does not include:

a.   Discounts, including cash, term, or coupons that are not reimbursed by a third party that are allowed by a seller and taken by a purchaser on a sale;

b.   Interest, financing, and carrying charges from credit extended on the sale of personal property or services if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser;

K.  “Sales tax” means the applicable tax imposed by Section 4.09.010;

L.  “Service” means an activity that is engaged in for another person for consideration and that is distinguished from the sale or lease of property; in determining what a service is, the intended use, principal objective, or ultimate objective of the contracting parties is irrelevant; “service” includes:

1.   Activities performed by a person for its members or shareholders;

2.   Construction activities and all tangible personal property that will become an ingredient or component part of a construction project; and

3.   Labor; professional services; transportation; telephone or other communications service; entertainment, including cable, subscription, or pay television or other telecommunications service; the supplying of food, lodging, or other accommodations in hotels, restaurants, or elsewhere; admission to exhibitions; the use of a computer, computer time, a computer system, a computer program, a computer network, or any part of a computer system or network; and the supplying of equipment for use;

M.  “Tangible personal property” means personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses; “tangible personal property” includes electricity, water, gas, steam, and prewritten computer software;

N.  “Tax” means the tax levied by Section 4.09.010.

(Ord. 07-12 § 4 (part), 2007; Ord. 03-1758 § 4(B), 2004.)

Chapter 4.12
PROPERTY TAX

Sections:

4.12.010 Definitions.

4.12.020 Property subject to tax.

4.12.025 Exemptions.

4.12.030 Assessor’s duties.

4.12.040 Assessment of property at full and true value.

4.12.050 Property owners’ returns.

4.12.060 Report of property acquisition by owner.

4.12.070 Assessment notice.

4.12.080 Board of equalization.

4.12.090 Assembly clerk ex officio clerk of board.

4.12.100 Appeal to board of equalization.

4.12.110 Tax levy fixed by assembly.

4.12.120 Liability for taxes on personal property.

4.12.130 Due date.

4.12.150 Rates of penalty and interest—Priority for crediting payments.

4.12.160 Demand for payment of personal property taxes.

4.12.170 Methods of collection.

4.12.180 Collection by distraint and sale.

4.12.190 Taxes lien against property.

4.12.200 Action for collection of tax.

4.12.210 Real property tax collection.

4.12.220 Foreclosure list.

4.12.230 Clearing delinquencies.

4.12.240 List to lienholder.

4.12.250 General foreclosure.

4.12.260 Answer and objection.

4.12.270 Judgment.

4.12.280 Transfer and appeal.

4.12.290 Redemption period.

4.12.300 Effect.

4.12.310 Additional liens.

4.12.320 Possession during redemption period.

4.12.330 Expiration.

4.12.340 Deed to municipality.

4.12.350 Disposition and sale of foreclosed property.

4.12.360 Repurchase by record owner.

4.12.370 Proceeds of tax sale.

4.12.410 Effect on purchase of irregularities, omissions or defects.

4.12.420 Enforcement of special assessments.

4.12.010 Definitions.

The following terms and phrases whenever used in this chapter shall have the meanings ascribed to them in this section.

A.  “Real property” includes:

1.   Land itself, whether laid out in lots or otherwise,

2.   All buildings, structures, improvements, fixtures of whatsoever kind permanently fixed thereon,

3.   All possessory rights and privileges belonging or in any ways appertaining thereto, including possessory rights to tidelands;

B.  “Tangible property” means property which may be seen, weighed and measured by the physical senses and capable of being possessed. Stocks and bonds shall not be considered tangible property;

C.  “Tract” includes all lands, pieces or parcels of land, which may be separately assessed together with the fixtures and improvements thereon;

D.  “Business property” includes all personal property and real property as hereinabove defined which is used for business purposes;

E.  “Boat or vessel” means an item designed and constructed for the principal purpose of transporting goods or persons by water. Registration, licensing or documentation shall not be conclusive, but shall be considered along with the use and hull design, including whether or not the item is actually and reasonably used in transporting persons or articles in navigation.

1.   Materials that have been attached or installed as of January 1st of any year as part of the manufacture of a boat or vessel shall be taxed as a boat or vessel for purposes of this chapter if as of January 1st of any year the product of the manufacture is recognizable as a boat or vessel by a reasonable person.

(Ord. 06-50 § 4 (part), 2007: Ord. 00-1597 § 4, 2000; Ord. 97-1470 § 4, 1998; Ord. 82-526 § 4 (part), 1983; Ord. 72-20 § 3 (part), 1972; B.C.S. § 3.20.010.)

4.12.020 Property subject to tax.

A.  All property within the corporate limits of the city and borough, both real and personal, of every nature, not exempt under the laws of the United States or the state of Alaska is subject to taxation for school and municipal purposes, and taxes upon such property must be assessed, levied and collected as provided herein, except the following property shall not be subject to taxation:

1.   Personal property consisting of household goods, jewelry, intangibles and personal effects, including motorcycles and snowmobiles not used in business and all motor vehicles subject to the motor vehicle registration tax.

B.  All boats and vessels located within the boundaries of the city and borough on January 1st of any given year shall be subject to taxation under the same procedures and with the same assessment dates and due dates as personal property, except that valuation and taxation shall be on the basis of registered and certified length according to the schedule set forth below:

Class and Vessel Size		Annual Property Tax
Class 1	Less than 15 feet in length	$20.00
Class 2	15 to less than 20 feet in length	$30.00
Class 3	20 to less than 30 feet in length	$50.00
Class 4	30 to less than 50 feet in length	$100.00
Class 5	50 or more feet in length	$200.00

(Ord. 04-49 § 4, 2004; Ord. 94-1280 § 4, 1994; Ord. 93-1182 § 4, 1993; Ord. 91-989 § 4, 1991; Ord. 84-619 § 4(A), 1984; Ord. 82-526 § 4 (part), 1983; B.C.S. § 3.20.020.)

4.12.025 Exemptions.

A.  The following property is exempt from general taxation: All properties set forth in AS 29.45.030(a) through (e) and (1) which are adopted and incorporated herein by reference.

B.  Exemptions shall be granted and claimed as set forth under AS 29.45.030(f) and (j) which are adopted and incorporated herein by reference.

C.  Definitions set forth in AS 29.45.030(i) and (m) are also adopted and incorporated herein by reference.

D.  If property, or an interest in property, is determined not to be exempt, under AS 29.45.030(a)(7), reverts to an undeveloped state, or the lease is terminated, the exemption shall be granted, subject to the provisions of AS 29.45.030(a)(7) and (m).

E.  All or a portion of the property of an organization not organized for business or profit making purposes and used exclusively for community purposes, may be exempted if income derived from rental of that property does not exceed the actual cost to the owner of the use by the renter.

Each optional exemption must receive prior approval by the board of equalization giving consideration to the benefits provided the community by the organization and to the amount of property to be removed from the tax rolls.

In order to be considered a community service organization an organization must:

1.   Benefit a significant portion of the public; and

2.   Not profit persons other than employees; and

3.   Qualify for a federal income tax exemption under 26 USC 501.

F.  Deteriorated property shall have a partial exemption. For purposes of this subsection, “deteriorated property” is commercial property, not used for residential purposes located in Sawmill Cove Industrial Park (as shown in Exhibit A to the ordinance codified in this subsection) that: (1) contains one or more structures at least fifteen years old of age that the owner or owners have arranged to spend at least two million dollars to rehabilitate, renovate, or replace; and (2) is dedicated for manufacturing or processing goods that are sold outside the city and borough. To qualify for this exemption, the arrangement for spending must be in the form of either executed financing document(s) or segregated escrow account(s) set aside for the completion of rehabilitation, renovation, or replacement no later than two years after January 1st of the first tax year for which the exemption is received. Any property owner desiring the benefit of this exemption for deteriorated property must apply in writing to the assessor by November 15th of the calendar year before the January 1st assessment date. For the first year for which an exemption has been applied for in which substantial rehabilitation, renovation, or replacement has occurred during the year immediately before the January 1st assessment date on any such structure as defined in this subsection, the tax rate shall be one-tenth of one percent (one mill), and it shall rise by one mill thereafter until it reaches five-tenths of one percent (five mills) in the fifth year. No property shall receive the exemption described in this subsection for more than five years, and no property shall receive this exemption or any particular rate under this exemption if the owner of such property has bargained away by contract the right to apply for such exemption or such rate. The city and borough’s power to grant this exemption for deteriorated property expires at the close of business on December 31, 2001, pursuant to the repeal of the statutory authority effective January 1, 2002.

G.  For all tax years beginning with the 2002 tax year, the senior citizen or disabled veteran exemption set forth in AS 29.45.030(e) and (f) may not be granted except upon written application on a form provided by the assessor. The application shall be filed by April 30th of each year. The assembly for good cause shown may waive the claimant’s failure to make timely application and authorize the assessor to accept the application as if timely filed. If a failure to timely file has been waived and the application approved, the amount of the tax that the claimant has already paid for the property exempted shall be refunded to the claimant. A once qualified senior citizen or disabled veteran need not file the application for successive tax years but must notify the assessor of any change in ownership, residency, permanent place of abode or status of disability.

H.  Business property inventory that is subject to sale and is nonreal property shall be exempt from taxation, as an optional exemption as set forth in AS 29.45.050(c).

(Ord. 06-50 § 4 (part), 2007: Ord. 02-1658 § 4, 2002; Ord. 01-1616 § 4, 2001; Ord. 89-895 § 4, 1989; Ord. 86-694 § 4, 1986.)

4.12.030 Assessor’s duties.

A.  Manner of Listing Property. The assessor shall complete the listing of all real and personal property subject to taxation within the limits of the corporation before July 1st of each year. The listing of all taxable property may be made upon permanent separate ledger cards which will be the combined assessment roll and tax ledger. Real property shall be assessed to the owner of record as shown in the records of the recorder for the recording district; provided, however, that any other person having an interest in the property may be listed on the assessment records with the owner. The person in whose name any property is listed as owner thereof shall be conclusively presumed to be the legal owner of record. If the owner of land is unknown, such land may be assessed to an “unknown owner” or

      “unknown owners.” No assessment shall be invalidated by a mistake, omission or error in the name of the owner of the real property assessed, if the property is correctly described.

B.  Description of Real Property. The assessor may list real property located in a subdivision by lot and block or tract description, and unsubdivided property according to the land office section and township survey description, or by describing the boundaries of the property, or by reference to the book and page of the records of the recorder where the description may be found, or by tax lot number referring to a public record kept by the assessor of descriptions of real property, or by any other description capable of being made certain. Initial letters, abbreviations, fractions and exponents to designate the township, range, section or part of a section, or the number of a lot or block or part of a lot or block, or a distance, course, bearing or direction, may be used in a description of real property.

C.  Independent Investigation by Assessor. The assessor shall not be bound to accept as correct the return made by any person, but if he thinks it necessary or expedient, or if he suspects that a person who has not made a return has property subject to taxation he shall make an independent investigation as to the property of that person and may make his own valuation and assessment of the taxable amount thereof, which shall be prima facie evidence for all legal purposes and proceedings.

D.  Content of Assessment Roll. The assessor shall prepare an annual assessment roll in duplicate, after consideration of all returns made to him pursuant to this chapter, and after careful inquiry from such sources as he may deem reliable. On the roll he shall enter the following particulars:

I.  The names and last known addresses of all persons with property liable to assessment and taxation;

2.   A description of all taxable property;

3.   The assessed value, quantity, or amount of the property;

4.   The arrears of taxes, if any, owing by any persons.

E.  Corrections by Assessor. The assessor may correct any error or supply any omission made or arising in the preparation of the assessment roll at any time before the sitting of the board of equalization.

F.  Completion of Assessment Roll. After the hearings held by the board of equalization are concluded the assessor shall complete the annual assessment roll, at a time to be determined by the assembly which shall be based on values as of January 1st immediately preceding, and he shall certify the same.

G.  Supplementary Assessment Rolls. The assessor shall include property omitted from the assessment roll on a supplementary roll, using the procedures set forth in this chapter for the original roll.

I.  Entry of Changes by Assessor. The assessor shall enter changes authorized and approved by the board and certified to by the finance director upon his records and no assessed valuations shall thereafter be changed.

J.  Delivery of Assessment Roll to Assembly. When the final assessment records have been completed. by the assessor as herein provided, the assessor shall deliver to the assembly a statement of the total assessed valuation of all real and personal property within the city and borough.

(Ord. 86-691 § 4, 1986; Ord. 84-6 19 § 4(B)(l), 1984; B.S.C. § 3.20.030.)

4.12.040 Assessment of property at full and true value.

Property shall be assessed at its full and true value in money, as of January 1st of the assessment year. In determining the full and true value of property in money, the person making the return or the assessor, as the case may be, shall not adopt a lower or different standard of value because the same is to serve as a basis of taxation, nor shall he adopt as a criterion of value the price for which the property would sell at auction, or at a forced sale, either separately or in the aggregate with all of the property in the taxing district, but he shall value the property at such sum as he believes the same to be fairly worth in money at the time of assessment. (B.C.S. § 3.20.040.)

4.12.050 Property owners’ returns.

A.  Submission Basis. By no later than February 15th of each year, every person shall submit to the assessor a return of any business property or personal property, subject to taxation, owned by him, or in which he has an interest, and of the property held or controlled by him in a representative capacity, in the manner prescribed in this title, which return shall be based upon property values existing as of January 1st in the same year. For good cause shown, prior to delinquency, an extension of time of up to twenty-nine days may be granted by the assessor, but he may grant no extension ending later than March 15th of the tax year.

B.  Contents. The person making the return in every case shall state an address to which all notices required to be given to him under this title may be mailed or delivered.

The returns shall show the nature, description, and true value of the property and the place where the property is situated and the return shall be in such form and include such additional information as the assembly may prescribe, and shall be signed and verified by the person liable or his or its authorized agent or representative.

In addition the person making the return shall give the name or names of any person or persons to whom he conveyed property during the previous year and a brief description of the property so conveyed sufficient to identify it on the tax records.

C.  Additional Information. The assessor may, by notice in writing to any person by whom a return has been made, require from him a further return containing additional details and more explicit particulars and upon receipt of the notice, that person shall comply fully with its requirements within thirty days.

D.  Criminal Penalty for Failure to Comply. Failure to file assessment returns as required and within the time provided above or refusal to give other information as required herein shall be a misdemeanor and, upon conviction, shall subject the violator to penalty as provided in Chapter 1.12.

(Ord. 82-518 § 4, 1982; Ord. 76-257 § 4,1976; Ord. 72-20 § 3 (part), 1972; B.C.S. § 3.20.050.)

4.12.060 Report of property acquisition by owner.

A.  Every person, partnership, association, corporation or other entity who acquires ownership in or possession of any real property located within the city and borough or of the following types of personal property located within the city and borough: Boats, house trailers, self-propelled mobile equipment not licensed under the provisions of the laws of the state of Alaska and movable construction or logging equipment of a value of more than five hundred dollars, is required to register such acquisition with the city and borough assessor on forms supplied for that purpose within fifteen days after such acquisition.

B.  All persons, partnerships, associations, corporations, or other entities within the city and borough owning or possessing within the city and borough any trailer, boat or movable construction or logging equipment shall within fifteen days after the relocation within the city and borough or removal from the city and borough of the personal property, notify the assessor of the city and borough of the relocation or removal on forms supplied for that purpose.

C.  Any person, partnership, association, corporation or other entity within the city and borough who violates any of the provisions of this section is guilty of a misdemeanor.

(B.C.S. § 3.20.060.)

4.12.070 Assessment notice.

A.  Notice Mailed to Property Owners. The assessor shall give to every person named in the assessment roll a notice of assessment. The assessment notice shall be directed to the person to whom it is to be given and shall be sufficiently given if it is mailed by first class mail addressed to, or is delivered at, his address as last known to the assessor, the notice may be addressed to the person at the post office nearest to the place where the property is situated. The date on which the notice is mailed or is delivered shall be deemed to be on the date on which the notice is given for the purposes of this chapter.

B.  Notice Published in Newspaper, or Posted. When all valuation notices have been mailed, the assessor shall cause to be published in a newspaper of general circulation which is published in the city and borough at least once each week for two successive weeks a notice that the assessment rolls have been completed. In the event no newspaper of general circulation is published in the city and borough the assessor shall cause such notice to be posted at two public places for a period of two weeks. Such notice shall state when and where the equalization hearings shall be held.

C.  Form of Notice. The notice shall show the assessed value of each tract assessed. On the back of each assessment notice shall be printed a brief summary for the information of the taxpayer, of the dates when the taxes are payable, delinquent, and subject to interest and penalty, dates when the board will sit for equalization purposes and any other particulars specified by the assembly.

D.  Duty to Call Attention to Errors. It shall be the duty of every person receiving a notice of assessment to advise the assessor of any error or omission he may have observed in the assessment of his property in order that ate assessor may correct the same.

(B.C.S. § 3.20.070.)

4.12.080 Board of equalization.

A.  Assembly to Sit as Board. The date on which the assembly shall sit as a board of equalization shall be the first Monday in May unless otherwise changed by resolution. The board shall adjourn over and continue its sessions as business requires.

B.  Purpose, Duties and Powers.

The purpose of the board of equalization is to examine the assessment roll, to equalize and revise the assessment for the current year where the assembly considers it necessary, and to hear complaints and protests on the part of taxpayers or owners of property assessed;

2.   The assembly siting as the board has the power and the duty to raise or lower the valuation of any property, real or personal which they consider in any way in error and to add to the assessment list any and all parcels of real property and any and all tangible personal property they find has been omitted and to place a fair, just and correct valuation thereon and to assess it, and equalize the assessment. Assessment and equalization of the board has the same effect as though the property had been originally assessed by the assessor.

C.  Duties and Powers of Board. The assembly sitting as a board of equalization shall have the full power, and it shall be the duty of the board:

1.   To raise or lower the valuation of any property, real or personal, which may be by them deemed unequally or unfairly assessed or otherwise in error;

2.   To add to the assessment list any and all parcels or real property and any and all tangible personal property which they may find to have been unfairly omitted from such list:

a.   To place a fair, just and correct valuation thereon,

b.   To assess the same, and equalize such assessment.

Such assessment and equalization of the board shall have the same effect as though such property had been originally assessed by the duly appointed assessor.

D.  Board to Send Additional Notices. If it appears to the board of equalization that there are overcharges or errors or invalidates in the assessment roll, or in any of the proceedings leading up to or after the preparation of the roll, and there is no appeal before the board, or if the name of a person is ordered by the board to be entered on the assessment roll, by way of addition or substitution, for the purpose of assessment, the board shall require the assessor to mail notice of assessment to that person or his agent giving him at least thirty days from the date of the mailing within which to appeal to the board against the assessment.

(B.C.S. § 3.20.080.)

4.12.090 Assembly clerk ex officio clerk of board.

The clerk of the assembly shall be ex officio clerk of the board of equalization and shall record in the minutes of the meeting all proceedings before the board, the names of all persons protesting assessments, all changes, revisions, corrections and orders relating to claims or adjustments. Within three days following the final hearings of the board the clerk transmit to the assessor all corrections, revisions, or changes authorized and approved by the board and shall certify that the changes so reported are as approved by the board of equalization. (B.C.S. § 3.20.090.)

4.12.100 Appeal to board of equalization.

A.  Any person who receives notice or whose name appears on the assessment roll may appeal to the board with respect to any alleged error in the valuation, overcharge, omission or neglect of the assessor not adjusted to the taxpayer’s satisfaction.

B.  Filing of Appeal by Person Assessed. Notice of appeal, in writing, specifying the grounds for appeal, shall be filed with the board within thirty days after the date on which the assessor’s notice of assessment was given to the person appealing, and the notice must be filed not later than five p.m. of the day prior to the day of any board of equalization hearing at which the appeal shall be heard; provided however, that the board, in what it deems unusual circumstances, by unanimous vote may waive this time provision. Such notice must contain a certification that a true copy thereof was mailed or delivered to the assessor. If notice of appeal is not given within that period, the right of appeal shall cease as to any matter within the jurisdiction of the board, unless it is shown to the satisfaction of the board that the taxpayer was unable to appeal within the time so limited. A copy of the notice of appeal must be sent to the assessor as above indicated.

C.  Appeal Record. Upon receipt of the notice of appeal, the assessor shall make a record of the same in such form as the assembly may direct, which record shall contain all of the information shown on the assessment roll in respect to the subject matter of the appeal, and the assessor shall place the same before the board from time to time as may be required by the board.

D.  Notice of Hearing. The board shall cause a notice of the sitting at which the appeal is to be heard to be mailed by the assessor to the person by whom the notice of appeal was given, and to every other person in respect of whom the appeal is taken, to their respective addresses as last known to the assessor.

E.  Hearing of Appeal. At the time appointed for the hearing of the appeal or as soon thereafter as the appeal may be heard, the board shall hear the appellant, the assessor, other parties to the appeal and their witnesses and consider the testimony and evidence adduced, and shall determine the matters in question on the merits and render its decision accordingly.

If any party to whom notice was mailed above set forth fails to appear the board may proceed with the hearing in his absence.

The burden of proof in all cases shall be upon the party appealing.

F.  Entry of Decisions. The board shall from time to time enter in the appeal record its decision upon appeals brought before it and shall certify to the same.

G.  Appeal to Court. An appellant or the assessor may appeal a determination of the board of equalization to the Superior Court as provided by Rules of Court applicable to appeals from the decisions of administrative agencies. Appeals are heard on the record established at the hearing before the board of equalization.

(Ord. 86-692 § 4, 1986; B.C.S. § 3.20.100.)

4.12.110 Tax levy fixed by assembly.

A.  Determination of Rate and Levy of Tax. When the final assessment records are completed by the assessor, the assessor shall deliver to the assembly a statement of the total assessed valuation of all real and personal property in the city and borough. The assembly shall then fix the rate of tax levy and designate the number of mills upon each dollar of value of assessed taxable real and personal property that shall be levied and shall levy the tax accordingly. The rate of levy shall be fixed by resolution and the levy for school and municipal purposes shall be made and fixed separately, but the aggregate thereof may not exceed three percent of the assessed value of the property assessed.

B.  Mailing Tax Statements – Billing Date. When the assembly has levied the tax, the assessor of the city and borough shall prepare tax statements to be mailed to the persons listed as the owners on the tax rolls, all of the tax statements shall be mailed on the same day. This day shall be known as the billing date. The finance director of the city and borough shall cause to be published in a newspaper having a general circulation within the city and borough, a notice that

      the tax statements have been mailed and the date upon which they are mailed as well as the date which has been determined to be the billing date.

C.  Lien for Taxes. General taxes levied by the city and borough are a lien upon the property assessed, and the lien is prior and paramount to all other liens or encumbrances against the property assessed.

D.  Taxes to Be Based on the Roll. All taxes levied or collected shall be calculated, levied and collected upon the assessed values entered in the assessment roll and certified by the assessor as correct, subject to the taxpayers’ rights of appeal and to the corrections and amendments made in the rolls.

E.  Validity of Assessment Rolls. An assessment roll as completed and certified by the assessor and as corrected and amended by him in conformity with the applicable provisions of this chapter and the decisions of the board is, except as amended as a result of an appeal to the court as provided by Section 4.12.100(G) of this chapter, valid and binding on all persons, notwithstanding any defect, error, omission or invalidity in the assessment roll, or proceedings pertaining to the assessment roll.

(B.C.S. § 3.20.110.)

4.12.120 Liability for taxes on personal property.

The owner of personal property assessed is personally liable for the amount of taxes assessed against his personal property, and the tax, together with penalty and interest, may be collected when due in a personal action brought in the name of the city and borough against the owner. (B.C.S. § 3.20.120.)

4.12.130 Due date.

A.  All property taxes become due sixty days after the billing date, unless that date falls on a Saturday, Sunday or holiday, in which case the taxes shall be due on the next business day. The date of payment shall be the date of actual receipt by the municipality or the postmark date, whichever is earlier.

B.  Those taxes not paid by the due date are delinquent.

(Ord. 89-896 § 4(A), 1989.)

4.12.150 Rates of penalty and interest—Priority for crediting payments.

If the taxes are not paid when due and become delinquent, (a) a penalty of three percent of the total tax for the current year shall be added; (b) an additional penalty of seven percent shall be added to any tax more than thirty days delinquent; and (c) an additional penalty of five percent will be added to any tax amount remaining delinquent after sixty days. Interest at a rate of twelve percent per year shall be charged on all of the unpaid taxes, not including the penalties, from the due date until paid in full. All payments made for taxes, penalty and interest on any one piece of property shall be credited first to the penalty, then to the interest, then to the past due taxes, and then to the current taxes, in that order. (Ord. 07-22 § 4 (part), 2007: Ord. 99-1554 § 4, 1999; Ord. 97-1469 § 4, 1997.)

4.12.160 Demand for payment of personal property taxes.

Prior to December 31st of each year the finance director shall mail, postage fully prepaid, to all persons whose personal property taxes are delinquent demand for payment of the taxes plus penalty and interest. This shall be the date of mailing of the notice of tax due referred to in Section 4.12.180(B)(1) and (2). (B.C.S. § 3.20.160)

4.12.170 Methods of collection.

Personal property taxes together with the penalty and interest may be collected, after the same become due, either by distraint or in a personal action brought in the name of the city and borough against such owner in the courts of the state, or both such methods of collection may be used, in the discretion of the assembly. Neither of such methods shall be deemed exclusive remedies. (B.C.S. § 3.20.170.)

4.12.180 Collection by distraint and sale.

A.  Persons Subject to Enforcement. If, at any time, a taxpayer is more than six months delinquent in any of the sales or personal property taxes levied by the city and borough or due the city and borough, he shall be subject to the enforcement procedures provided for herein, which are in addition to any other enforcement procedures already provided for and are not exclusive.

B.  Distraint. The lien of personal property taxes and other nonreal taxes may be enforced by distraint and sale of the personal property of the person assessed. The procedure shall be as follows:

1.   Demand shall be made of the person assessed by sending him a notice of the amount of the tax due, the penalty and interest and the total and notice to the effect that if the taxes and all penalty and interest are not paid by a date certain, which date shall be not less than thirty days from the date of mailing, that his personal property shall be subject to distraint and sale. The notice shall be sent by certified mail, return receipt requested or may be served in person with return of the person making service. The notice shall be signed by the finance director.

2.   If no payment is made within the time specified or any extension agreed to in writing between the parties, the finance director shall issue a warrant directed to an enforcement officer of the city and borough to be designated by the municipal administrator, direct him to forthwith seize, levy upon, distrain, and sell by public auction such personal property of the person assessed as the tax may have been levied upon, and that if the same is not sufficient to satisfy the tax, penalty, interest, costs, and expenses of sale, such warrant may authorize the seizure, levy, distraint and sale of such other personal property of the person against whom the tax was assessed as may be sufficient to satisfy such tax, penalty, interest, costs and expenses of sale.

3.   No sale of any property may be made without at least fifteen days’ notice being given by publishing a notice of the sale at least two times in a newspaper of general circulation within the city and borough and by sending a copy of the notice by certified mail to the person assessed.

4.   Sale. The sale of such property shall be made at public auction and such personal property shall be sold to the highest bidder for cash. All sales of personal property shall be made at a time of day to be fixed by the finance director in such notice, and the same shall be fixed between the hours of ten a.m. and five p.m. of the day of sale, and the sale may be adjourned by the finance director from day to day for want of purchasers or sufficient bids, or if for any valid reason the finance director is prevented from attending at the time and place set for the sale, the sale may be adjourned and continued from day to day if necessary until all of such personal property has been sold to pay the costs and expenses herein provided, and the tax, penalty and interest in full.

5.   From the proceeds of the sale which shall convey all the right title and interest of the person assessed, shall be paid, in the following order, the actual expenses of sale, tax, penalty, interest, other costs including attorney’s fees.

6.   Schedule of Costs. The following shall be the schedule of costs and attorney’s fees:

a.   If redemption is made prior to sale:

i.  Actual costs of seizing and preserving the property

ii. Actual costs of publication and giving notice

iii. Attorney’s fees in the amount of twenty percent of the first one hundred dollars, but with a minimum of ten dollars, fifteen percent of the next five hundred dollars, and ten percent thereafter,

b.   If no redemption is made and the property sold:

i.  All the costs stated next above plus any actual accruing costs

ii. Attorney’s fees in addition to those stated of fifteen percent of the first one hundred dollars but with a minimum of ten dollars, five percent of the balance.

7.   Any remaining sums shall be returned to the person assessed, or if not claimed within three years become the property of the city and borough.

8.   Finance Director to Preserve Records. The finance director shall thereupon apply the proceeds of the sale in the manner hereinbefore set forth, and shall keep a record of all such sales and all such proceedings, and shall keep on file the returns of the finance director relating thereto, and in all cases of sale of personal property, he shall, if requested, give the purchaser a bill of sale on behalf of the city and borough under his hand and the seal of the city and borough.

(Ord. 86-693 § 4, 1986; B.C.S. § 3.20.180.)

4.12.190 Taxes lien against property.

Whenever the tax on real property has not been paid when due, the assembly may enforce the lien of such tax by the sale of the property assessed. (B.C.S. § 3.20.190.)

4.12.200 Action for collection of tax.

A.  If the tax on real property is not paid when due, the assembly may enforce the lien of the tax by the sale of the property assessed, after foreclosure in the special proceeding provided for herein by order of the Superior Court.

B.  If the tax on a leasehold interest in tax exempt property is not paid when due, the city and borough may enforce the tax by a personal action against the delinquent taxpayer brought in the magistrate or Superior Court, in addition to other remedies available to the city and borough to enforce the lien.

(B.C.S. § 3.20.200.)

4.12.210 Real property tax collection.

A.  The municipality shall enforce delinquent real property tax liens by annual foreclosure.

B.  If the tax on property described in AS 29.45.070 or on a taxable interest in tax exempt property is not paid when due, the municipality may enforce the tax by a personal action against the delinquent taxpayer brought in the district or superior court, in addition to other remedies available to enforce the lien.

(Ord. 86-718 § 4 (part), 1986.)

4.12.220 Foreclosure list.

A.  The municipality shall:

1.   Annually present a petition for judgment and a certified copy of the foreclosure list for the previous year’s delinquent taxes in the superior court for judgment;

2.   Publish the foreclosure list for four consecutive weeks in a newspaper of general circulation distributed in the municipality;

3.   “Within ten days after the first public