Onus is on companies to follow the law

AT&T, ACS, GCI and Dish Network are taking money unlawfully from hundreds of Valley residents and our local incorporated cities each month. These large companies have turned a blind eye to their own thievery for years, and it’s past time they were called out.

In today’s Frontiersman, you’ll read an account of how Valley residents who live outside the city limits of Wasilla, Palmer and Houston are being charged sales tax by some companies as if they lived in these cities. If you’re one of those being bilked, the culprit — according to the companies — is your ZIP code.

Because people living in the cities of Palmer and Wasilla use the same ZIP code as folks who live adjacent to these cities, but outside the incorporated areas, some companies end up collecting Wasilla or Palmer sales tax from residents outside the city limits and passing that money back to the cities each month. So residents who live outside city boundaries are being charged city sales tax on business conducted outside the city limits.

Former Wasilla city councilwoman Laura Chase noticed this unfair — and illegal — practice a couple of years ago. She calls the practice “taxation without representation.”

Although her home off Church Road is not in an incorporated city, she’s charged Wasilla city sales tax because of her 99654 ZIP code.

“To watch the kind of stuff that’s going on now, I just shake my head,” she said.

So do we.

We were astounded to learn that not only has Chase tried to change this faulty practice for the past two years — with the help of a state assessor — but that instead of correcting the error, companies have responded by insisting that each customer provide documentation that proves their residence is outside city limits.

And because the cities are presented a lump sum payment of taxes collected each month, it’s impossible for those government bodies to know exactly who is being charged city sales tax, how much, and whether it’s appropriate or not. The companies say all a customer needs to do is get a letter from they city verifying they’re not city residents.

Based on customers’ earlier attempts to attain such a letter, we remain skeptical that customers will find it a simple matter to attain the letter and the two-year refund of taxes they are owed.

But even if such letters are easily available, why is the onus of proof on cities and customers, rather than on the companies? As we read Alaska statute, the responsibility to collect the tax correctly lies with the corporations, not their customers or local government.

Another loser in this sales tax quagmire is the cash-strapped city of Houston, which is watching a significant portion of its sales tax dollars go to Wasilla because Houston residents without a Post Office box share Wasilla’s 99654 ZIP code.

While we appreciate this is no small task for companies, it’s a burden companies accept when doing business with Valley customers. Some companies, even smallish local ones, have managed to sort their customers and charge sales tax accordingly.

While big companies like AT&T, GCI, ACS and Dish Network have insisted customers prove to them whether they live in a city or not, we are pleased to report that Matanuska Telephone Association has it right. Unlike its competitors, MTA doesn’t charge sales tax to customers who live outside city limits.

If the “little” local guy can follow the law, there is no valid reason huge companies, like AT&T and Dish Network, should be excused.