Wasilla council aligns online sales tax collection

WASILLA — The Wasilla City Council approved Ordinance 21-13 at their meeting on Monday to align Wasilla Municipal Code with the Alaska Remote Seller Sales Tax commission by a 4-2 vote.

The council passed Ordinance 20-06 in February of 2020 adopting the Alaska Uniform Remote Seller Sales Tax by reference, meaning changes to the remote seller sales tax regulations by the commission board would also occur for remote sales in Wasilla. The remote seller sales tax commission board adopted changes to their code on Feb 24.

“It continues to grow, the Wayfair caused the ability for municipalities across the country to align the remote side, if you will the digital age of transactions that occur both interstate and intrastate commerce to create that fairness, that taxability fairness between the physically present businesses, the brick and mortar store versus the businesses outside,” said Finance Director Troy Tankersly. “We are not changing any kind of taxability however we are aligning the two, the remote side with the physical side. If we don’t do that then you potentially create double taxation between two municipalities.”

Ordinance 21-13 aligned municipal code regarding point of taxation, including definitions to services performed remotely in an effort to treat remote and physically present sellers the same. The ordinance also eliminated the potential of duplicate taxation and provided filing options for quarterly and annual reporting of sales tax revenues. The city’s new sales tax licensing software MUNIRevs allows for both quarterly and annual filing and the changes will take effect in 2022.

Councilman Tim Johnson inquired about the implementation of the additional filing options. Tankersly clarified that monthly filing would not cease, but both monthly and annual filing would be available through MUNIRevs.

“We’ve worked on this for a long time [Alaska Municipal League] has worked on this for a long time. I was against it right from the get go. This is an increase in tax,” said Councilman Tim Burney. “I mean for me this is an opportunity to show Alaska how and why Wasilla is better and can be better. again, this is another tax increase on the citizens of Wasilla that we represent.”

Burney and Councilman James Harvey both voted no, while Simon Brown, Johnson, Jordan Rausa and Nikki Velock voted in favor. Brown asked Tankersly about what the changes to code would bring into the city.

“It actually provides benefit to the city in the sense of what I’ll call the low end sales type businesses. We currently using 2020 as our base, there was 2,359 accounts that we looked at and of that 2,359, 626 or 27 percent filed 0 sales. Another one for annual filers, there’s 760 accounts that would if they all obviously took advantage of annual filing, the amount of sales tax that annual filing comes in is $42,000 right. So that’s a cash flow that’s easily managed. When we look at quarterly filing there is 693 accounts, if they all took advantage 30 percent it’s about $174, 175,000 thousand per quarter right. Again, from a cash flow perspective we can manage that,” said Tankersly. “Right now we get taxed for services here in the city right. So to align the physically present with the remote, we’re going to give up some services but we have a chance to actually gain more from the outside bringing services into the city. That analysis is very difficult to do because we can’t get into the details of those individual returns to know which way those sales are going so from that perspective not a complete analysis could be done.”

Tankersly also reported that the city collects approximately $40,000 on real estate commissions inside the city.

“This ordinance is more just changing the way we collect it, it’s not really voting to collect it or not,” said Velock.