WASILLA — The Wasilla City Council engaged in a heated debate over the long-awaited remote seller sales tax code. Ordinance 20-06 ultimately passed 4-2 with Councilmen James Harvey and Tim Burney voting against the adoption of the Alaska Uniform Remote Seller Sales Tax Code for the collection and remittance of online sales tax.
Deputy Mayor Glenda Ledford, Nikki Velock, Mike Dryden and Stu Graham voted for the ordinance. Graham, who serves as President of the Alaska Municipal League, led off the discussion with questions for Finance Director Troy Tankersly, asking if the adoption of the code would result in any additional work or burden to the city of Wasilla.
“I don’t think of this being an additional burden, I think of it as a way to ensure that he burden is spread equally amongst the users,” said Graham.
The Wayfair Vs. South Dakota Supreme Court Decision ruled that tax collecting organizations may collect online sales tax from sellers delivering good within their taxing jurisdictions. The AML undertook an online sales tax working group to create the initial guidelines for how the Remote Seller Sales Tax Commission would look, which was formed late last year. Karl Kaufman joined City Attorney Leslie Need at the council meeting on Monday, as Kaufman specializes in tax law, but was not called upon to offer his expertise.
“It’s not a necessary tax for our residents. To me it just doesn’t make any sense,” said Burney.
The city of Wasilla did not begin collecting sales tax until fiscal year 1993. Tankersly, who served on the working group that initially formed to research how Alaskan municipalities could collect online sales tax, said that an estimated $20 million in additional revenue could pass through the state with Wasilla collecting up to $1 million per year. There are a total of 106 taxing jurisdictions in Alaska not including Anchorage and Fairbanks, who do not collect sales tax. The commission created by the working group under AML will be in charge of enforcing the code and Wasilla will not have to pay any additional costs for the collection of online sales tax.
“I don’t see how the commission could possibly enforce that,” said Harvey.
Harvey criticized the 120 day period for cities to adopt the code, effectively setting a deadline for cities to opt in or opt out. Harvey also questioned the ability of the commission to enforce the code.
“I would argue too that it is not a new tax, it is not an attempt for the city of Wasilla to gain additional revenue, it is a way to create parity between our local businesses and that of remote sellers,” said Tankersly.
Harvey had made a request for numbers comparing what Wasilla looked like prior to the beginning of collection of sales tax in 1992. In the 28 years between the listed figures, Wasilla operating costs went up $23,162,784, an increase of 954 percent. Tax revenue also dramatically grew from $829,773 in 1992 to $14,945,600 in the FY2020 amended budget, an increase of 1,801 percent. Wasilla’s population has grown nearly 6,000 and full time equivalent employees working for Wasilla has gone from 23.5 to 132.25 in the 28 years. Other additional services include the Wasilla Police Department built in 1994 and the Menard Center built in 2004. The most staggering number provided by Tankersly is the number of active business licenses, increasing from 785 in 1992 to 2,449 in 2020.
“It’s a pile of money and what we did was decide we want a seat at the table,” said Dryden. “There’s really no need, there’s no reason not to vote for this because whether we vote for it or not is not going to make one bit of difference whether that tax gets assessed or not, it’s going to get assessed from here on.”
Despite the objection from Harvey and Burney, Velock said that she felt the council should support their local businesses. Mayor Cottle said that even though Wasilla began collecting sales tax in 1992, businesses continue to come to Wasilla because of the services they provide.
“No offense to anybody here but no ones packing the council chambers tonight. You put marijuana on the docket or you put four wheelers, you’ve got a line out the door,” said Cottle.
After Ordinance 20-06 passed 4-2, Cottle updated the council on two of his agenda items for his trip to Juneau on Tuesday. Cottle said that the Alaska State Troopers plan to create a ‘mega-center’ for dispatch in Anchorage, requiring 911 dispatchers in Wasilla, Kenai and Ketchikan to transfer calls into the center in Anchorage. Cottle noted a recent $4.5 million upgrade to the dispatch capabilities at WPD.
“This is not about the money. It’s not about the contract. It’s not about the nine people in the seats. It’s about customer service and health and safety and welfare for the people who live in the Valley and I hope this doesn’t go through,” said Cottle.
The second agenda item for Cottle to testify on in Juneau this week is Senate Bill 52 dealing with local control of alcohol and beverage licenses.
“Let us have local control. There’s no reason they should control us out of Juneau. It just doesn’t make sense. This council is the closest to the people. We represent the people. We’re here 365 days,” said Cottle. “We are the people.”