Chapter 3.16
SALES TAX

Sections:

3.16.010    Authority.

3.16.020    Definitions.

3.16.030    Tax levied – Rate.

3.16.035    Transactions in the city.

3.16.040    Examples of taxed transactions.

3.16.050    Exceptions.

3.16.055    Sales tax certificate of exemption.

3.16.060    Repealed.

3.16.065    Application of sales tax payments.

3.16.070    Seller accountability.

3.16.080    Taxable sales and sales tax returns.

3.16.083    Taxes levied and interest for delinquency.

3.16.085    Information to be confidential.

3.16.087    Tax records – Inspection and audit.

3.16.090    Tax records – Final tax return.

3.16.095    Liability of third parties.

3.16.100    Collection upon sale.

3.16.110    Repealed.

3.16.120    City manager regulation promulgation authority.

3.16.130    Repealed.

3.16.140    Repealed.

3.16.150    Public statement of tax required – Exception for coin-operated machines.

3.16.160    Liability for payment – Protest of tax.

3.16.170    Tax return – Extension of time.

3.16.180    Estimated tax.

3.16.190    Delinquent taxes – Notice.

3.16.200    Lien for tax, interest and administration costs and penalties.

3.16.210    Delinquent taxes – Foreclosure – Time limit.

3.16.220    Delinquent taxes – Foreclosure – Sale of property – Redemption.

3.16.230    Certificate of sale – Other than real property.

3.16.240    Certificate of sale – Real property.

3.16.250    Delinquent taxes – Seizure of additional property – Chapter nonexclusive.

3.16.260    Violation – Remedies.

3.16.270    Refund of sales tax – Interest.

3.16.280    Appeal.

3.16.010 Authority.

This sales tax is imposed and collected pursuant to the authority granted by the Alaska Constitution, Art. X and this code. (Ord. 445 § 3, 1992; Ord. 419 § 3, 1991; Ord. 199 § 1, 1977; 1978 code § 13.1)

3.16.020 Definitions.

A. “Bulk sales” means sale of unpackaged items in large quantities.

B. “Buyer” includes persons who are purchasers of property and services and lessees of property.

C. “Calendar year” means the period from January 1st through December 31st or any portion thereof ending December 31st.

D. “Distraint” means to seize and hold property as security for a debt.

E. “Mail order sales and sales made by personal solicitation” means sales to consumers made by mail order houses or other sellers having a place of business within the city or having a place of business elsewhere, but who solicit sales within the city, are taxable if the order is accepted within the city and delivery is made by the seller at such place of business or elsewhere within the city.

F. “Medical services” means hospital services and medical services performed by the following persons duly licensed by the state for the providing of such services: medical doctors, dentists, osteopaths, optometrists, chiropractors, and psychologists; retail sales of medicinal preparations, drugs or appliances under a written prescription from one of the foregoing.

G. “Person” includes individuals and every person recognized in law, and every group of the aforesaid who act as a unit.

H. “Rents” includes every letting or renting of property for consideration.

I. “Retail sale” means the transfer of title to tangible personal property for consumption or use, and not for resale, in substantially the same form or condition. “Retail sale” includes every sale of property, regardless of quantity or price, except the following:

1. Sales to wholesale and retail dealers in the property sold, for the purpose of resale within the city by such dealer;

2. Sales of tangible personal property as raw materials to a person engaged in manufacturing for sale, which property becomes an ingredient or component part of the manufactured product or a container thereof, or enters directly into the manufacturing container thereof, or enters directly into the manufacturing process. A building or construction contractor or subcontractor is not a “person engaged in manufacturing.”

J. “Sale” includes all retail sales, rentals and all services. Installment, credit and conditional sales are included within the term.

K. “Sales price” means consideration paid by the buyer in terms of money and, in the case of a sale involving an exchange of property, the fair market value of the property exchanged, all without any deduction for delivery costs, taxes or any other expenses whatsoever; provided, however, seller’s cash discount at the time of payment in exchange for a coupon having a cash value of no more than one-twentieth of one cent is not part of the sales price.

L. “Seller” includes persons or their agents who are vendors of and lessors of property, and persons furnishing services, and every person making sales.

M. “Services” includes all services of every manner and description which are performed or furnished for compensation and, by way of illustration, includes the following:

1. Professional services;

2. Services in which a product or sale of property may also be involved, including personal property made to order;

3. Utilities, repair, construction, transportation, banking, advertising, maintenance, recreation, amusement, contracting and craftsmen’s services;

4. Services rendered for compensation by any person who furnishes any such service or services in the course of his business or occupation, who has a state or city business license and whose gross revenue exceeds $1,500 during the calendar year of January 1st to December 31st;

5. Services wherein labor and materials are used to accomplish a specified result;

6. Services dispensed by machines and amusement devices including those which are coin-operated;

7. “Services” does not include services rendered to an employer by his employee. (Ord. 06-027 § 3, 2006; Ord. 495 § 3, 1996; Ord. 276 § 4, 1983)

3.16.030 Tax levied – Rate.

A. A sales tax shall be established by the city council and adopted as a part of the city budget.

B. The adopted sales tax shall be levied on the sales price or charge for all sales, rentals and services made within the city. The buyer shall pay the tax to the seller for the use and benefit of the city; provided, however, that the seller need not collect sales tax but the seller must in any event pay the tax to the city whether collected or not.

C. Maximum Tax. The adopted sales tax shall be applied only to the first $1,000 of each separate sale of an item or items, rent or service transaction. The payment of rent, whether for real or personal property, in excess of $1,000 and for more than one month shall be treated as several separate transactions covering the rental for one month each. A transaction involving payment for services or personal property to be rendered or delivered over a period of more than one month for a consideration in excess of $1,000 shall be treated as several separate transactions occurring one each month over the period of time that the service or property is rendered or delivered. (Ord. 07-029 § 10, 2007; Ord. 06-028 § 3, 2006; Ord. 493 § 3, 1996; Ord. 276 § 4, 1983)

3.16.035 Transactions in the city.

The following rules determine whether a transaction is made within the city:

A. A sale or rental is made within the city if delivery occurs in the city and the seller either:

1. Maintains a place of business, or an agent or employee, in the city; or

2. Regularly or repeatedly promotes sales or rentals in the city by means such as advertising, promotional events or solicitation of sales.

B. A service is made within the city if all or a substantial part of the service is rendered in the city.

C. A rental of real property is made in the city if the real property is located in the city.

D. A service involving the construction, repair, renovation, improvement, sale or rental of real property is made in the city if the real property is located in the city. (Ord. 12-012 § 4, 2012; Ord. 10-019 § 3, 2010)

3.16.040 Examples of taxed transactions.

Illustrative examples of transfers of ownership or possession, and rendering of services, which are taxed under this chapter include, but are not limited to, the following:

A. Rentals of all tangible personal property, including vending machines, typewriters, office furniture and equipment, tools, automobiles, construction equipment and aircraft, including all maintenance and repair contracts in connection therewith;

B. Supplying natural or artificial gas, electricity, ice, steam, water and all services by a public or private utility;

C. Transportation for hire of persons by common carrier within the city or to the city from another location, including motor transportation, taxicab companies and all other means of transportation for hire;

D. Service by telephone companies to subscribers or users, including transmission of messages, whether local or long distance. This shall include all services and rental charges having any connection with telephone service, but shall not include deposits;

E. Printing or printed matter of all types, kinds and characters and the service of printing or overprinting;

F. Renting rooms or living quarters or offices or other commercial space of whatever name or nature by hotels, apartments, roominghouses, public lodging houses or by firms or individuals renting single- or multiple-unit residences or offices or other commercial space, including state or federally subsidized rentals. For purposes of computing the maximum tax, a rental of property for a period in excess of one month shall be deemed as a series of rentals with each rental transaction terminating as a rental payment is made. The maximum sales tax payable shall be applicable to each deemed rental with tax payments to accrue and become payable at the time of filing the next monthly return to be submitted following receipt of the rental;

G. Foods, confections, and all liquors, beverages and drinks sold and dispensed by retail stores, restaurants or other dispensers, and sold for immediate consumption upon the premises or delivered or carried away from the premises for consumption elsewhere;

H. Advertising of all kinds, types and characters contracted for or sold in the city, including any and all devices used for advertising purposes and the servicing of advertising devices;

I. Gross proceeds derived from the operation of punchboards, slot machines, marble machines, jukeboxes, merchandise-vending machines, pull-tabs, games of chance, or amusement devices of any kind, and self-service laundry and dry cleaning machines;

J. The sale of tickets or admissions to places of amusement, entertainment, recreational or athletic events, or dues or fees for the privilege of having access to or use of amusement, entertainment, athletic or recreational facilities, including free or complimentary passes and tickets, admissions dues or fees. Such free or complimentary passes and tickets, dues or fees are declared to have a value equivalent to the sale price or value of the tickets, passes, admissions dues or fees;

K. Subject to PMC 3.16.050(S), sales of tangible personal property and services made for the purpose of developing and improving real estate, even though such real estate is intended for resale as real property;

L. Services of drycleaners, laundries (including self-service laundry and dry cleaning machines), garages, barbershops, beauty shops and cold storage and locker plants;

M. Retail sales of motor fuels, oils and lubricants;

N. The provision of services rendered by lawyers, accountants, shoe repair shops, carpenters and cabinetmakers, house painters and decorators, tinsmiths and sheet iron workers, watchmakers, radio and television advertising, photographers (including all film development), computer programmers, printing establishments, garages, mechanics and machinists, plumbers and electricians, welders and stove cleaners, and services of all other tradesmen, craftsmen and professional practitioners and service fees (except commissions) charged by travel agencies; and

O. The provision of electrical, telephone, water, garbage, sewer, natural gas and cablevision utility services including the installation and connection charges and fees. (Ord. 12-012 § 4, 2012; Ord. 10-019 § 4, 2010; Ord. 06-027 § 4, 2006; Ord. 06-019 § 3, 2006; Ord. 448 § 3, 1992; Ord. 420 § 3, 1991; Ord. 407 § 3, 1989; Ord. 276 § 4, 1983)

3.16.050 Exceptions.

The tax levied shall not apply to the following:

A. Casual and isolated sales not exceeding $50.00 and not made in the regular course of business;

B. Sales of insurance and bonds of guaranty, fidelity and surety;

C. Gross receipts or proceeds derived from funeral charges and services, medical or dental services rendered and hospital services;

D. Gross receipts or proceeds derived from the transportation of students to and from grade or high schools in motor or other vehicles;

E. Gross receipts or proceeds derived from the sale of food in public, common, high school or college cafeterias or lunchrooms operated primarily for the public and not operated for profit;

F. Gross receipts or proceeds derived from sales or services which the municipality is prohibited from taxing under the laws of the state or under the laws of the United States; or gross receipts of proceeds from the transportation, loading, unloading or storing of cargo from vessels or aircraft in foreign or interstate commerce, or on goods in transit or awaiting and being processed for shipment;

G. Gross receipts or proceeds derived from carrier sales made directly to consumers or users of newspaper or any other periodicals;

H. Gross receipts or proceeds derived from sales to the United States Government or the state or any political subdivision thereof, including the city; provided, however, that the exemption shall not apply to the sale of materials and supplies to contractors for the manufacture or production of property or rendering services for sale to such government units or agencies on a contract bid award, in which event the contractor shall be deemed the buyer, subject to the payment of the tax;

I. Dues or fees to clubs, labor unions or fraternal organizations;

J. Real estate agent’s gross receipts received on behalf of the owner and derived from sale of real property, but excepting the real estate agent’s fee earned as commission for sale of such property, which fee or commission shall be taxable up to the maximum taxable amount set out in PMC 3.16.030(C);

K. Sales of tickets for school entertainments, school athletic events and activities (excluding, without limitation, those of the type described in PMC 3.16.040(I)) conducted for charitable purposes or community benefits;

L. Bulk sale of feed, seed and fertilizer to farmers;

M. Sales of air, train, boat, cruise line or bus tour transportation, car rentals, or accommodations, where the underlying service is provided outside the city, and commissions related to such sales;

N. Receipts from filling of doctors’ prescriptions by licensed pharmacists;

O. Sales of drugs and medicines for use in hospitals and clinics;

P. Subject to PMC 3.16.055(A), sales of food supplies to cafes, restaurants and other establishments where food is sold to the public for use in the normal course of business of cafes, restaurants and other such establishments;

Q. Subject to PMC 3.16.055(A), sale of food supplies to hospitals, children’s homes having six or more charges, recreational camps and schools;

R. Construction Materials.

1. Subject to PMC 3.16.055(A), sales of tangible personal property which property is to be used in the construction of or renovations to improvements to real property and is to be physically incorporated into and to become a part of the real property. Among other things, this subsection does not include tangible personal property used for repairs or maintenance (and thus materials for repairs or maintenance shall be subject to tax, unless otherwise exempted).

2. Subject to PMC 3.16.055(A), sales of tangible personal property to a person currently and duly licensed as a contractor under AS 8.18, which property is to be used in the construction of or renovations to improvements to real property and is to be physically incorporated into and to become a part of the real property;

S. Services by an individual which do not exceed $1,500 per calendar year of January 1st to December 31st and are not licensed by the state;

T. Food coupons, food stamps and other allotments issued under 7 U.S.C. 2011 through 2036 (Food Stamp Program) or food instruments, food vouchers or other type of certificate issued under 42 U.S.C. 1786 (Special Supplemental Food Program for Women, Infants and Children). For purposes of this subsection, the value of a food stamp allotment paid in the form of a wage subsidy as authorized under AS 47.25.975(b) is not considered to be an allotment issued under 7 U.S.C. 2011 through 2036 (Food Stamp Program);

U. Gross receipts or proceeds received by those schools that comply with AS 14.45.100 through 14.45.130, to include religious schools and other private schools, that are derived from the provision of educational services to children at least five years of age; provided, however, such gross receipts or proceeds for other services, to include without limitation, education services to children less than five years of age and day care for children of any age, are not exempt from the tax, except to the extent such comparable services are provided for free by the Matanuska-Susitna Borough School District to children similarly situated;

V. Subject to PMC 3.16.055(A), purchases of utility services (other than cable television), including the installation and connection charges and fees, by an organization holding a current, valid 501(c)(3) or 501(c)(4) exemption letter from the Internal Revenue Service;

W. Subject to PMC 3.16.055(A), sales, services and rentals to a buyer that has a current, valid 501(c)(3) or 501(c)(4) exemption ruling from the Internal Revenue Service;

X. Subject to PMC 3.16.055(A), sales, services and rentals made by a seller that has a current, valid 501(c)(3) or 501(c)(4) exemption ruling from the Internal Revenue Service; provided, that this exemption does not apply to the following:

1. Sales, services, rentals, and games of chance including pull tabs occurring at a fair with annual attendance over 50,000 people, and

2. Sales, services or rentals made on a regular basis from a fixed location that is open more than 20 hours per week;

Y. The following sales and services by banks, savings and loan associations, credit unions and investment banks:

1. Services associated with any deposit accounts, including service fees, NSF fees and attachment fees,

2. Fees for the purchase of bank checks, money orders, travelers’ checks and similar products for payment,

3. Loan fees and points associated with loan transactions,

4. Pass-through charges on loan transactions which include sales tax, and

5. Services associated with the sale, exchange or transfer of currency, stocks, bonds and other securities;

Z. Sales of aviation fuel (Jet A, Jet B, low lead and others) at the Warren “Bud” Woods Palmer Municipal Airport. (Ord. 16-002 § 3, 2016; Ord. 12-012 § 5, 2012; Ord. 06-028 § 4, 2006; Ord. 06-027 § 5, 2006; Ord. 06-019 § 4, 2006; Ord. 613 § 3, 2004; Ord. 595 § 3, 2002; Ord. 569 § 2, 2001; Ord. 564 § 3, 2000; Ord. 518 § 3, 1997; Ord. 517 § 3, 1997; Ord. 510 § 3, 1997; Ord. 448 § 4, 1992; Ord. 440 § 3, 1991; Ord. 365 § 3, 1987; Ord. 276 § 4, 1983)

3.16.055 Sales tax certificate of exemption.

A. No sales in the city shall be exempted from sales tax under PMC 3.16.050(Q), (R), (S), (W), (X), and (Y) unless and until the person obtains from the director of finance a certificate of exemption.

B. A person may apply to the director of finance for a certificate of exemption on a form approved by the director of finance The director of finance may require additional information of the applicant as necessary to determine whether the application should be granted.

C. The director of finance may revoke a certificate of exemption after notice to the holder of the certificate and a hearing, if the director of finance finds that the holder of the certificate:

1. Gave materially false information when applying for the certificate of exemption;

2. Used the certificate of exemption in a transaction that was not exempt from sales tax under PMC 3.16.050;

3. Permitted the use of the certificate of exemption by a person other than an authorized agent or employee of the holder of the certificate; or

4. Ceased to be entitled to exemption from sales tax.

D. If the director of finance revokes a person’s license, that person is not exempt from paying sales tax under PMC 3.16.050 until the person obtains a new certificate of exemption, which may not occur sooner than one year after the revocation.

E. If the director of finance revokes a person’s license, that person must pay sales tax, interest, penalties, etc., on all sales made to or by the person which were not duly exempt.

F. A contractor duly licensed under AS 8.18 may obtain a sales tax certificate of exemption for one calendar year upon payment of the fee established in the current, adopted budget.

G. A buyer who proposes to undertake the construction of or renovations to improvements to real property within the city may, at the time of applying and receiving the building permit, apply for a certificate of exemption and pay the sales tax in the amount established by the current, adopted budget in the year in which the building permit is issued. The buyer may renew the certificate for only one additional calendar year for an additional amount which will be collected based on the current, adopted budget, and after that year purchases for the original construction shall not be exempt. (Ord. 12-012 § 6, 2012; Ord. 10-019 § 5, 2010; Ord. 07-034 § 3, 2007; Ord. 07-029 § 11, 2007; Ord. 07-008 § 3, 2007; Ord. 06-027 § 6, 2006)

3.16.060 Special collection for building construction.

Repealed by Ord. 06-027. (Ord. 276 § 4, 1983)

3.16.065 Application of sales tax payments.

A. Payments on sales tax accounts shall be applied to the earliest delinquent amount due, first to accrued penalty, second to accrued interest and then to sales tax payments owed by the seller.

B. Amounts of delinquent sales tax, interest or penalty that have been reduced to judgment, are the subject of a confession of judgment, or are the subject of a written payment agreement between the city and the seller are payable as provided in the judgment, confession of judgment or payment agreement, respectively, and, except as provided otherwise in the judgment, confession of judgment or payment agreement, thereafter cease to be subject to the further accrual of interest or penalty under this chapter. (Ord. 10-019 § 6, 2010)

3.16.070 Seller accountability.

Upon collection by the seller of the taxes imposed in this chapter, title to the collected taxes shall vest in the city. All taxes collected are city moneys, and the seller holds the money in trust for the city and is at all times accountable to the city for such moneys. Collection of any tax or taxes, interest, administrative costs and penalties due and payable to the city under this chapter may be enforced through civil action brought in any court of competent jurisdiction. Every sale which is made within the city, unless explicitly exempted by this chapter or a subsequent ordinance, shall be presumed to be subject to the tax imposed under this chapter in any action to enforce the provisions of this chapter. (Ord. 445 § 4, 1992; Ord. 199 § 1, 1977; 1978 code § 13.7)

3.16.080 Taxable sales and sales tax returns.

A. Taxable Sales.

1. Except as provided in subsections (B) and (C) of this section, every seller with annual taxable sales of $250,000 or more based on the prior year’s taxable revenue and new businesses, on or before the last business day of each month, shall make out a return for the preceding month.

a. The sales tax return, and the related remittance of sales tax, is due and must be received, not merely postmarked, by the city not later than 5:00 p.m. on the last business day of the month immediately following the month for which the return was prepared.

b. Failure of the United States Postal Service or any private delivery service to make timely delivery of a sales tax return or the related remittance of sales tax shall not excuse an untimely filing or remittance.

2. Except as provided in subsections (B) and (C) of this section, every seller with annual taxable sales of between $100,000 and $249,999.99 based on the prior year’s taxable revenue, shall submit a sales tax return on or before the last business day of the month following the end of the quarter year ending March, June, September, and December.

a. The sales tax return, and the related remittance of sales tax, is due and must be received, not merely postmarked, by the city not later than 5:00 p.m. on the last business day of the month immediately following the quarter for which the return was prepared.

b. Failure of the United States Postal Service or any private delivery service to make timely delivery of a sales tax return or the related remittance of sales tax shall not excuse an untimely filing or remittance.

3. Except as provided in subsections (B) and (C) of this section, every seller with annual taxable sales of below $100,000 based on the prior year’s taxable revenue, shall submit a sales tax return on or before the last business day of the month following the end of the half year ending June and December.

a. The sales tax return, and the related remittance of sales tax, is due and must be received, not merely postmarked, by the city not later than 5:00 p.m. on the last business day of the month immediately following the quarter for which the return was prepared.

b. Failure of the United States Postal Service or any private delivery service to make timely delivery of a sales tax return or the related remittance of sales tax shall not excuse an untimely filing or remittance.

B. Alaska State Fair Business License. For all sales made during and at the Alaska State Fair under a special city business license for sales at the Alaska State Fair only, the tax return shall be due on or before the tenth day of October in the year of the sales.

C. Special Events and Seasonal Events. For all sellers only operating at special events and seasonal events, the tax return shall be due on or before the last business day of the month following the event(s).

D. Sales Tax Forms.

1. All returns shall be upon forms provided by the city, setting forth the amount of all sales, rentals and services, all nontaxable sales, rentals and services, all taxable sales, rental and services, the amount of tax thereon, and such other information as the city may require, and sign and transmit the same to the city.

2. All tax returns shall show such further information as the city may require enabling the city to compute correctly and collect the tax levied in this chapter.

3. In addition to the information required on returns, the city may request, and the seller must furnish, any information deemed necessary for a correct computation of the tax. (Ord. 12-012 § 7, 2012; Ord. 10-019 § 7, 2010; Ord. 07-029 § 12, 2007; Ord. 634 § 3, 2004; Ord. 445 § 5, 1992; Ord. 199 § 1, 1977; 1978 code § 13.8)

3.16.083 Taxes levied and interest for delinquency.

A. Late Filing Fee. Sales tax return late filing fee will be assessed as established in the current, adopted budget.

B. Taxes Levied. The tax levied, whether or not collected from the buyer, shall be paid by the seller to the city at the time of transmitting the return, and if not so paid, the tax shall immediately become delinquent.

C. Delinquency Costs. In the event the tax is not paid before delinquency, as provided in this chapter, delinquency costs shall be added to the tax.

1. Delinquency sales tax shall bear the interest established in the current, adopted budget.

2. In addition, delinquent sales tax shall be subject to a late payment penalty established in the current, adopted budget.

D. Penalty. The penalty assessed on the delinquent remittance of sales tax or for failure to file a sales tax return shall be waived by the director of finance, upon written application of the seller accompanied by a payment of all delinquent sales tax, interest and penalty otherwise owed by the seller to the city if:

1. The seller applies for a waiver of the penalty within 30 days after the delinquency or the director of finance in his or her discretion may extend the 30-day period for good cause; and

2. The seller has not been delinquent in their sales tax remittance within the previous 24 consecutive months. (Ord. 14-024 § 3, 2014; Ord. 12-012 § 8, 2012)

3.16.085 Information to be confidential.

Except as otherwise provided in this chapter, all returns, reports and information required to be filed with the city under this chapter, and all information deducible from such filed returns, reports and information shall be kept confidential and are not subject to public inspection. Except upon court order, such returns, reports and information shall be made available only to employees and agents of the city whose job responsibilities are directly related to such returns, reports and information; to the person supplying such returns, reports, and information; and to persons authorized in writing by the person supplying such returns, reports and information. The following information shall be made available to the public: The name and address of current business license holders; whether a business license holder is more than 30 days delinquent in filing returns and in remitting sales tax; and if so delinquent, the amount or estimated amount of sales tax due and the number of returns not filed. The city manager or his designee may, from time to time, publish the names of sellers delinquent in remitting sales taxes and the amount thereof. Information may also be made available to the public in the form of statistical reports if the identity of particular sellers is not revealed by the reports. (Ord. 375 § 3, 1987)

3.16.087 Tax records – Inspection and audit.

The records that a seller is required to maintain under this chapter shall be subject to inspection and copying by authorized employees or agents of the city for the purpose of auditing any return filed under this chapter, or to determine the seller’s liability for sales tax where no return has been filed. In addition to the information required on returns, the city may request, and the seller must furnish, any information deemed necessary for a correct computation of the tax. The city may adjust a return for a seller if, after investigation or audit, the city determines that the figures included in the original return are incorrect, and that additional sales taxes are due, and the city adjusts the return within three years of the original due date for the return. (Ord. 10-019 § 8, 2010)

3.16.090 Tax records – Final tax return.

It shall be the duty of every seller required to make a return and pay over any tax under this chapter to keep and preserve suitable records of the gross daily sales together with invoices of purchases and sales, bills of lading, bills of sales and other pertinent records and documents which may be necessary to determine the amount of tax due under this chapter and such other records of goods, wares, merchandise and other subjects of taxation under this chapter as will substantiate and prove the accuracy of such returns. It shall also be the duty of every seller who makes exempt sales to keep records of such sales, which shall be subject to examination by the city or any authorized employee thereof while engaged in checking or auditing the records of any seller required to make a report under the terms of this chapter. All such records shall remain in the city and be preserved for a period of three years after payment of the taxes, unless the city has authorized, in writing, their destruction or disposal at an earlier date, and shall be open to examination at any time by the city or any authorized employee or agent thereof while engaged in checking such records. The burden of proving that a sale, rental or service was not taxable shall be upon the seller.

Any seller who filed or should have filed a sales tax return for the prior month shall file a return for the current month even though no tax may be due. This return shall show why no tax is due and, if the business is sold, the name of the person to whom it was sold. If any seller sells, leases or otherwise disposes of his business, he shall make a final sales tax return within 15 days after the date of sale. (Ord. 445 § 6, 1992; Ord. 199 § 1, 1977; 1978 code § 13.9)

3.16.095 Liability of third parties.

A. If any seller sells, assigns, transfers, conveys, leases, forfeits, abandons or otherwise disposes of the business or accounts receivable, then the purchaser, successor, transferee, lessee, assignee, creditor or secured party shall withhold a sufficient portion of the purchase money or loan to pay the amount of such sales taxes, penalties, administrative costs and interest as may be due and unpaid to the city and to pay such to the city. If the purchaser, assignee, transferee, lessee, successor, creditor or secured party fails to withhold from the purchase money or loan, or fails to otherwise provide for or make the payment of the taxes, interest, administrative costs and penalties owed by the business as provided in this chapter, then the purchaser, assignee, transferee, lessee, successor, creditor or secured party shall be personally liable, jointly and severally with the seller, for the payment of the taxes, penalties, administrative costs and interest accruing and unpaid to the city on account of the operation of the business of any former owner, owners, operators or assigns. This section is in addition to any rights of the city arising under AS 45.06.101 et seq.

B. Upon termination, dissolution or abandonment of a corporate business, any officer having control or supervision of sales tax funds collected or who is charged with the responsibility for the filing of returns or the payment of sales tax funds collected, shall be personally liable for any unpaid taxes, interest, administrative costs, and penalties on those taxes, if such officer willfully fails to pay or cause to be paid any taxes due from the corporation. In addition, regardless of willfulness, each director of the corporation shall be jointly and severally liable for said amounts. The officer shall be liable only for taxes collected which became due during the period he or she had the control, supervision, responsibility, or duty to act for the corporation. This section does not relieve the corporation of other tax liabilities or otherwise impair other tax collection remedies afforded by law. (Ord. 445 § 7, 1992)

3.16.100 Collection upon sale.

A. The tax levied under this chapter shall be paid by the buyer, and it shall be the duty of every seller to collect from the buyer the full amount of the tax, except that the tax on receipts or proceeds from various mechanical devices as provided in PMC 3.16.150 shall be paid by the operator thereof.

B. Every seller shall add the amount of the tax levied by this chapter to the total sale price, and the tax shall be stated separately on any sales receipts or slips, rent receipts, charge tickets, invoices, statements of account or other tangible evidence of sale. When so stated, the tax shall constitute a part of such price and shall be a debt from the buyer to the seller until paid and shall be recoverable at law in the same manner as other debts.

C. Seller shall be charged the fee established in the adopted budget for failure to collect the tax required by this chapter. (Ord. 14-024 § 4, 2014; Ord. 199 § 1, 1977; 1978 code § 13.10)

3.16.110 Tax rate.

Repealed by Ord. 06-028. (Ord. 493 § 4, 1996; Ord. 276 § 4, 1983)

3.16.120 City manager regulation promulgation authority.

The city manager may take any action necessary or appropriate to the implementation of this chapter by promulgation of regulations which may include the adoption of forms. Such regulations or any proceedings adopted by the city manager are effective at the time indicated by him, but are subject to revision or repeal by the city council at the next meeting following their effective date or at the time that the council acts thereon. (Ord. 199 § 1, 1977; 1978 code § 13.12)

3.16.130 Business license – Required.

Repealed by Ord. 10-019. (Ord. 09-008 § 3, 2009; Ord. 199 § 1, 1977; 1978 code § 13.13)

3.16.140 Business license – Requirements.

Repealed by Ord. 10-019. (Ord. 445 § 8, 1992; Ord. 199 § 1, 1977; 1978 code § 13.14)

3.16.150 Public statement of tax required – Exception for coin-operated machines.

A seller shall not advertise or hold out or state to the public or to any buyer, directly or indirectly, that the tax payment or any part thereof imposed by this chapter will be assumed or absorbed by the seller or that it will not be added to the sales price or that it will be refunded or absorbed in whole or in part. The seller shall, whenever feasible, separately state the tax to the buyer on each taxable transaction. When not feasible to state separately, the seller shall prominently display a sign indicating the imposition of the tax. The revenue from a coin-operated machine shall be treated in gross on a monthly basis, without reference to the amount paid or played on a particular transaction. (Ord. 199 § 1, 1977; 1978 code § 13.15)

3.16.160 Liability for payment – Protest of tax.

A. A seller shall determine in the first instance whether a sale is exempt under this chapter; however, if the seller incorrectly determines that a sale is exempt, the seller is liable to the city for the tax just as if he had collected it.

B. If the seller determines that a transaction is not exempt, but the buyer believes the transaction to be exempt, then the buyer may protest.

1. A buyer who protests the payment of the tax levied under this chapter shall pay the tax with the sales price and shall deliver to the city director of finance and to the seller a written statement of protest within five working days of the sale that identifies the sale, rental or service that is the subject of the tax protested, the amount of tax paid, the buyer’s and seller’s name, mailing address and telephone number and the basis for the protest.

2. The city director of finance, after investigation (if necessary) and after consultation with the city attorney, will rule on each protest and send to the buyer a notice that his claim has been allowed or disallowed within 30 days of receipt of the statement by the city. If the claim has been allowed, a refund will be remitted with the notice. In the event the claim is disallowed, the buyer may seek review thereof by the city manager within 30 days. Unless such review is sought within such time, the decision of the city director of finance is final. (Ord. 12-012 § 9, 2012; Ord. 10-019 § 11, 2010; Ord. 445 § 9, 1992; Ord. 199 § 1, 1977; 1978 code § 13.16)

3.16.170 Tax return – Extension of time.

The city manager may, in his discretion, upon written application duly made, grant an extension of time for filing returns and remitting the tax each month to any seller, provided:

A. That such extension is a dire necessity for bookkeeping reasons and would avert undue hardship upon such seller; and

B. That such seller is not delinquent in any payment of tax or filing of returns or otherwise in violation of this chapter; and

C. Provided further, that no such extension shall be for more than 21 days each month.

No such extension shall be made retroactive to cover existing delinquencies. (Ord. 199 § 1, 1977; 1978 code § 13.17)

3.16.180 Estimated tax.

A. In the event that the city is unable to ascertain the tax due to be remitted by a seller by reason of seller’s failure to keep accurate books, to allow inspection, or to file a return or seller’s falsification of records, the city may make an estimate of the tax due based on any information available to it. Notice of the estimate of tax due shall be furnished the seller, and the amount therein stated shall become final 33 days thereafter for the purposes of determining liability of seller to the city, unless the seller earlier files an accurate return, supported by satisfactory records, indicating a lesser liability, or unless the city proves a greater liability within six years from the date the final estimate is established. A seller shall immediately notify the city of any fire, theft or other casualty which would prevent his complying with this chapter. Such casualty constitutes a defense to any penalty provided in this chapter, but does not excuse the seller from liability for taxes due. Accidental loss of funds or records is not a defense under this section.

B. Nothing in this section shall prevent the city from filing and maintaining an action to collect any taxes collected or which should have been collected in addition to any penalty assessed. In such action, the estimated tax due made by the city shall be prima facie evidence of the amount payable. (Ord. 445 § 10, 1992; Ord. 199 § 1, 1977; 1978 code § 13.19)

3.16.190 Delinquent taxes – Notice.

A. Whenever any seller fails to submit the required return, or such return is reasonably believed by the city to contain incorrect reporting, the city may notify such seller in writing by certified mail, return receipt requested.

B. The seller shall have 15 days to provide evidence that the seller’s reporting is correct such as the seller’s books, sales receipts, papers, records and other memoranda pertaining to gross revenue and the determination of sales tax liability and in the event of noncompliance by the seller the city may forthwith take such legal action as provided for in this chapter. (Ord. 12-012 § 10, 2012; Ord. 199 § 1, 1977; 1978 code § 13.20)

3.16.200 Lien for tax, interest and administration costs and penalties.

A. The tax, interest, penalties and administrative costs imposed under this chapter shall constitute a lien in favor of the city upon the assets, including all real and personal property, of every person making taxable sales within the city. The lien arises upon delinquency and continues until the liability for the amount is satisfied or the property of the delinquent person is sold at foreclosure sales. When recorded, the sales tax lien has priority over all other liens except (1) liens for property taxes and special assessments; (2) liens that were perfected before the recording of the sales tax lien for amounts actually advanced before the recording of the sales tax lien; (3) mechanics’ and materialmen’s liens for which claims of lien under AS 34.35.070 or notices of right to lien under AS 34.35.064 have been recorded before the recording of the sales tax lien.

B. The city may file a notice of lien in the manner provided for federal tax liens under AS 40.19; provided, that in addition to the rights afforded thereunder, the city’s sales tax lien shall attach to all seller’s personal property, whether tangible or intangible, located in the recording district in which the lien is filed regardless of where the seller resides. The city may record subsequent notices of lien for amounts due after the recording of a previous notice of lien. The city may also record amended notices of lien to correct any errors or to provide notice of the then current principal amount owing.

C. The notice of lien for real property shall set out:

1. The name of the seller;

2. The principal amount owing at a stated date; and

3. A statement that penalty, interest and administration costs are also owing.

D. Within 10 days after filing the notice of lien or amended notice of lien, the city shall mail a copy of the notice by certified mail, return receipt requested, to the last known address of seller; provided failure to so mail the copy shall not void the lien nor lessen its priority. (Ord. 445 § 11, 1992; Ord. 334 § 3, 1986; Ord. 199 § 1, 1977; 1978 code § 13.21)

3.16.210 Delinquent taxes – Foreclosure – Time limit.

The city attorney, at the request of the city council, may file an action to foreclose the lien of the city for the tax upon property and rights to property, real or personal, and sell the same, applying the proceeds thereof to the payment of the tax, interest, penalty, administration costs and the costs of foreclosure. The action shall be commenced and pursued in the manner provided for the foreclosure of liens by AS 09.45.170 through 09.45.220; provided, however, upon commencement, the city shall provide written notice of the action to all persons having an interest of record in the property being foreclosed or persons in possession of the property. The action may be commenced at any time within six years after the lien arises. (Ord. 335 § 3, 1986; Ord. 199 § 1, 1977; 1978 code § 13.22)

3.16.220 Delinquent taxes – Foreclosure – Sale of property – Redemption.

A. The city council may collect taxes, with interest and penalties, by distraint, seizure and private sale of the property of the seller who fails to pay them within 10 days after service or mailing of the notice of delinquency. The council may levy upon, or, by warrant issued by it, authorize any peace officer to levy upon, seize or sell all property, except that upon which the seller claims an exemption pursuant to law, belonging to the seller, for the payment of the amount due, with interest and penalty for nonpayment, and also of a further amount sufficient for the fees, costs and expenses of the levy.

B. When distraint is made as provided in this section, the peace officer charged with the collection shall make or have made an account of the property distrained, a copy of which, signed by owner or possessor of the property, or at his dwelling or usual place of business, if a person of suitable age and discretion can be found, or if the taxpayer is a corporation or other type of organization, then with an officer, manager, general agent, or agent for process, with a note as to the amount demanded and the time and place of sale. The peace officer shall immediately publish a notice of the time and place of sale, together with a description of the property distrained, in a newspaper published in the city and, in the discretion of the council, have the notice publicly posted in three public places within five miles of the place where the sale is to be held, one of the notices to be posted at the post office nearest the place where the sale is to be made. The time of sale shall be not less than 10 nor more than 60 days from the date of the notification to the owner or possessor of the property, and the place proposed for the sale shall not be more than five miles from the place of making the distraint. The sale may be adjourned from time to time by the peace officer if he considers it advisable, but not for more than 90 days in all. When the property is advertised for sale under the distraint, the peace officer making the seizure shall proceed to sell the property at public auction, offering the property for sale at not less than a fair minimum price as established by the city manager, to the highest cash bidder, but reserving the right, if the amount bid is less than the fair minimum price so established, to declare the property to be purchased by him for the city. Property so purchased by him may thereafter be sold under regulations prescribed by the city, or otherwise used for city purposes.

C. The property distrained shall be restored to the owner or possessor if, before the sale, payment of the amount due is made to the peace officer charged with the collection, together with the fees and other charges; but in case of nonpayment, the peace officer shall proceed to sell the property at public auction. The owner of real property sold under this section, his heir, executor, administrator or successor or a person in his behalf may redeem the real property sold or a particular tract of the real property at any time within two years after the sale thereof; the property or tract may be redeemed upon payment to the purchaser or, if be cannot be found, then to the city for the use of the purchaser, his heirs or assigns, the amount paid by the purchaser and interest on it at the rate of eight percent per year. In the case of property sold, the peace officer conducting the sale shall give to the purchaser a certificate of sale on payment in full of the purchase price. In the case of real property, the certificate shall set out the real property purchased, the amount of taxes for which the same was sold, the name of the purchaser and the price paid for it. In the case of real property sold under this section and not redeemed in the manner and within the time provided in this chapter, the city manager shall execute to the purchaser of the real property at the sale a tax deed to the real property so purchased by him, reciting the facts set forth in the certificate. Such tax deed shall be delivered to the purchaser (including the city when it is the purchaser) upon demand after the period of redemption has expired. (Ord. 199 § 1, 1977; 1978 code § 13.23)

3.16.230 Certificate of sale – Other than real property.

In all cases of sale of property under this chapter, other than real property, the certificate of sale:

A. Is prima facie evidence of the right of the peace officer to make the sale, and conclusive evidence of the regularity of his proceedings in making the sale;

B. Transfers to the purchaser all right, title and interest of the delinquent in and to the property sold;

C. When the property consists of shares of stock, is notice (when received) to the corporation, company, or association to record the transfer on their books and records in the same manner as if the stock were transferred or assigned by the party holding the stock in lieu of an original or prior certificate, which original or prior certificate is void, whether cancelled or not;

D. Where the subject of the sale is security or other evidence of debt, is a good and valid receipt to the person holding it, as against a person holding or claiming to hold possession of the security or other evidence of debt. (Ord. 199 § 1, 1977; 1978 code § 13.24)

3.16.240 Certificate of sale – Real property.

In the case of a sale of real property under this chapter:

A. The deed of sale given under the provisions of this chapter is prima facie evidence of the facts stated in it; and

B. The deed is considered and operates as a conveyance of all the right, title and interest that the party delinquent had in and to the real property sold as of the time of the lien of the city attached to it. (Ord. 199 § 1, 1977; 1978 code § 13.25)

3.16.250 Delinquent taxes – Seizure of additional property – Chapter nonexclusive.

If property seized and sold under distraint is not sufficient to satisfy the claim of the city for which distraint or seizure is made, the peace officer may, thereafter, and as often as is necessary, proceed to seize and sell in like manner any other property liable to seizure of the delinquent party against whom the claim exists until the amount due from the delinquent party, together with all expenses, is fully paid. A person in possession of property or rights to property which is subject to distraint upon which a levy is made shall, upon demand by the peace officer making the levy, surrender the property or rights to the peace officer, unless the property or right is, at the time of the demand, subject to a previous attachment under judicial process. A person who fails or refuses to so surrender the property or rights is personally liable to the city in a sum equal to the value of the property or rights not so surrendered, but not exceeding the amount of the taxes, penalty, interest and costs. All persons shall, on demand of a peace officer about to distrain or having distrained on property, or rights of property, exhibit all books containing evidence or statements relating to the subject of distraint or the property or rights of property liable to distraint for the tax due. The provisions of this chapter are not exclusive but are in addition to all other existing remedies provided by law for the enforcement of a levy and collection of taxes of the city. (Ord. 199 § 1, 1977; 1978 code § 13.26)

3.16.260 Violation – Remedies.

A. The seller who fails to timely remit sales tax to the city shall pay the city all costs of collection, to include without limitation, actual reasonable attorney’s fees, costs and audit fees incurred for collection, whether or not court action is commenced. This amount of fees and costs is in addition to the fee set out in subsection (C) of this section.

B. Each of the following acts or omissions, when intentional, constitutes an ordinance violation and subjects the violator to a civil penalty. Such an act or omission is intentional when it continues after notice from the city to the seller or seller’s agent that such act or omission is an ordinance violation. Each act or omission set forth in this section constitutes a separate violation, and each day that a violation of this chapter continues constitutes a separate violation:

1. Failure to obtain a current business license by a seller;

2. Making sales either without a current, valid business license or while the seller’s business license is suspended;

3. Failure to file a sales tax return or failure to remit sales taxes when due;

4. Falsification or misrepresentation of any record or fact provided to the city under this chapter or required to be kept by this chapter, if used to mislead the city tax authorities;

5. Failure to correct a falsification or misrepresentation of any record or fact provided to the city concerning sales tax;

6. Failure of a seller to allow the inspection at reasonable times of records required to be kept by this chapter; and

7. Failure of a seller to keep and preserve records required to be kept under this chapter.

C. For continuing violations, the fee established in the current, adopted budget shall be paid to the city.

D. The city may request the court to enjoin a seller from violating any provision of this chapter. On application for injunctive relief and a finding of a violation or threatened violation, the superior court shall grant the injunction.

E. All remedies hereunder are cumulative and are in addition to those existing at law or equity. (Ord. 14-024 § 5, 2014; Ord. 07-029 § 13, 2007; Ord. 536 § 3, 1998; Ord. 452 § 3, 1992; Ord. 445 § 12, 1992; Ord. 199 § 1, 1977; 1978 code § 13.18)

3.16.270 Refund of sales tax – Interest.

A. If, through error or otherwise, a taxpayer pays to the city sales taxes to which the city is not entitled by law, the taxpayer may, within one year from the due date of the tax, apply in writing to the city director of finance for a refund.

B. If the application for refund of tax, and where applicable interest at eight percent per annum as well, does not exceed in the aggregate $500.00, the city director of finance may, upon approval by the city attorney and an audit of the applicant’s account, refund to the applicant the said tax, and, where applicable, interest as well.

C. If the city director of finance determines a refund is not due or is not due in the amount claimed, then the taxpayer may appeal to the city manager within 30 days as provided in PMC 3.16.280.

D. The procedure set forth in this section is the recognized procedure whereby a refund may be made; and the taxpayer must first duly comply with this section and PMC 3.16.280 as conditions precedent to bringing a suit to recover said taxes. Any person who has not timely availed himself of these procedures shall be deemed to have waived any right to such refund as well as the right to recover said tax and interest.

E. Any claim for refund shall be filed with the city director of finance within one year from the date of payment of the tax. The failure to file a claim for refund within the time allowed shall forever bar the claim. (Ord. 15-022 § 4, 2015; Ord. 10-019 § 12, 2010; Ord. 445 § 13, 1992)

3.16.280 Appeal.

A taxpayer may appeal a decision of the director of finance to the city manager in accordance with the provisions of this section.

A. The taxpayer has the right to a hearing before the city manager.

B. The taxpayer’s request for a hearing must be in writing, signed by the taxpayer (or counsel therefor) and delivered to the city manager within 30 days of receipt of written notice of the director of finance’s decision. Taxpayer’s failure to request a hearing within the time and manner provided shall be deemed a waiver of his or her appeal rights and to any appellate review to which he or she might have otherwise been entitled; and the director of finance’s decision becomes final.

C. If the taxpayer duly delivers his or her request for hearing, the city manager will hold a hearing within 15 days from the date of receipt of the request. The city manager may extend in writing the hearing date, but no extension of more than 30 days shall be granted. The city manager shall duly notify the taxpayer of the date, time and place of the hearing.

D. The taxpayer at his or her own expense may be represented by counsel.

E. The hearing shall be open to the public.

F. The city manager may attain the services of an attorney or other person to assist him or her in conducting the hearing and making the decision.

G. All testimony shall be under oath. The proceedings shall be tape-recorded. Upon written request, the taxpayer is entitled to a copy of the tape at no charge. The taxpayer or representative and the director of finance or representative may examine and cross-examine witnesses. The city manager or representative may also question witnesses. Exhibits may be introduced. The rules of evidence need not be strictly followed. Irrelevant or unduly repetitious evidence may be excluded. The factual record is closed at the close of the hearing. The city manager may continue the hearing for good cause.

H. The order of presentation will be:

1. Brief opening statement by the director of finance;

2. Brief opening statement by the taxpayer, which is optional;

3. Presentation of evidence by director of finance;

4. Presentation of evidence by taxpayer;

5. Rebuttal as necessary;

6. Argument by director of finance;

7. Argument by taxpayer;

8. Rebuttal argument by director of finance.

I. The taxpayer must prove by a preponderance of the evidence the factual basis upon which he or she is relying.

J. Within 10 working days from the conclusion of the hearing, the city manager shall render a written decision which shall be effective immediately or according to its terms.

K. A taxpayer who is dissatisfied with the city manager’s decision may appeal it to the superior court in Palmer only. Said appeal must be filed within 30 days of taxpayer’s receipt of the decision. Taxpayer’s failure to appeal within this time constitutes a waiver of his or her appeal rights and the city manager’s decision becomes final. (Ord. 12-012 § 11, 2012; Ord. 10-019 § 13, 2010; Ord. 445 § 14, 1992)