Amazon has started charging sales tax in the Kenai Peninsula Borough and municipalities are struggling to work out the logistics.
Earlier this month, Amazon filed to start collecting and paying sales taxes but zip codes in the borough overlap between borough and cities, making it difficult to separate purchases made inside and outside of city limits.
At last week’s Kenai City Council meeting, the mayor and council discussed the online retailers taxation policies.
“I’m for a fair playing field,” said Mayor Brian Gabirel. “I think by working toward taxing products bought online but originate here, point of sale within our community, that we are at least leveling the playing field and being more fair to our brick and mortar stores that have come here, invested in the community and provided their services.”
Gabriel said Amazon’s move is fair to both local businesses and to the city.
“I can imagine it is pretty discouraging for them, when they’ve made an investment into the community and have to charge more than somebody else has to charge online. It’s an unfair advantage,” he continued.
According to City Manager Paul Ostrander, Kenai is projecting six-figure revenues from the changes to Amazon’s sales taxes. This estimate is based on similar projections from municipalities throughout the state.
“Juneau is projecting a significant amount of revenue based on their 5 percent sales tax within their municipality. Based on their numbers, if you are going to look at our population and our sales tax rate, we are likely going to see … We’re going to see at least six-figure revenues from this change with Amazon here in the city of Kenai,” Ostrander said.
The discussion was spurred by a previous council discussion where Council Member Tim Navarre expressed his concerns that residents are being taxed unfairly due to their postal codes.
In response, City Attorney Scott Bloom said that customers who believe they’ve been improperly taxed can reach out to the borough and Amazon to address the issue.
Reach Kat Sorensen at ksorensen@peninsulaclarion.com.
