Kenai City Hall on Feb. 20, 2020, in Kenai, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)

Kenai City Hall on Feb. 20, 2020, in Kenai, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)

Kenai sees returns from remote sales tax

The city has received almost $96,000 in net revenue

The City of Kenai has received almost $96,000 in net revenue generated from remote sales tax since it began collecting those taxes in March.

The city first joined the Alaska Remote Sellers Sales Tax Commission (ARSSTC) in early 2020 so that it could collect local sales tax from remote sellers like Amazon. According to a memo from City Attorney Scott Bloom to the council, doing so expanded the city’s ability to collect local sales tax from certain vendors located outside of Kenai who are selling goods and services into the city.

ARSSTC was created by municipalities around Alaska with help from the Alaska Municipal League. The commission contracted software vendors to develop products needed and entered into an agreement with AML for administrative support.

Fees incurred from software development and management are not paid upfront, but rather as a percentage of the collected taxes, per ARSSTC’s design. In total, 19.10% in various fees are collected from the total sales tax collected. Since the program went live, the city has received $116,728.13 in gross sales tax and $95,785.27 in net revenue, according to the memo.

“The contracts are structured to allow for percentage fees to decrease if certain revenue milestones are accomplished,” Bloom wrote. “There is also opportunity to renegotiate after a number of years.”

The amount of revenue generated is less than the city was expecting. Bloom said it should grow as the program becomes larger, meaning more jurisdictions participate, more sellers are registered to collect taxes and there is less economic pressure from the COVID-19 pandemic. Bloom said that some members of the commission believe that the fees are too high, but that it was the “lesser of two evils” in order to get the program started.

“One thing that’s unique about Alaska, compared to other states that are doing this, is we’re the only state that’s doing this that doesn’t have a state sales tax,” Bloom said at the Kenai City Council’s Dec. 16 meeting. “So it was pretty challenging to figure out how to do this under the parameters of the Supreme Court decision that allowed this that requires a uniform platform to collect it.”

According to the memo, 711 sellers have been registered by the ARSSTC to collect and remit sales tax. Additionally, almost 40 municipalities have joined the ARSSTC including the Kenai Peninsula Borough, the City of Kenai, the City of Soldotna, the City of Homer and the City of Seward.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.

More in News

The sign in front of the Homer Electric Association building in Kenai, Alaska as seen on April 1, 2020. (Photo by Brian Mazurek/Peninsula Clarion)
Homer Electric to issue over $2M in capital credits

Around 16,000 people who were HEA members in 1989 and 1990 will receive a credit on their May energy bill statement.

Sen. Lora Reinbold, R-Eagle River, holds a press in front of the doors to the Senate chambers on Thursday, March 4, 2021. Reinbold called the conference to respond to a letter from Gov. Mike Dunleavy saying he would no longer participate with her as chair of the Senate Judicairy Committee. (Peter Segall / Juneau Empire)
State Senate removes Lora Reinbold as judiciary committee chair

The committee change was approved 17-1, with Reinbold the lone no.

Ashlyn O’Hara / Peninsula Clarion
Kelly Tshibaka addresses members of the community at Nikiski Hardware & Supply on April 9 in Nikiski.
Tshibaka reports financial support from peninsula residents

Tshibaka has raised nearly $215,000 for her campaign since the beginning of this year in total receipts.

The RavnAir kiosk stands empty at the Kenai Airport on Thursday, April 2, 2020. (Photo by Victoria Petersen/Peninsula Clarion)
Council to mull potential Kenai air carrier

Rambler Air would join Grant Aviation and Ravn Alaska in offering scheduled service between Kenai and Anchorage.

In this undated photo provided by the Tanana Chiefs Conference, shows PJ Simon, chief and chairman of the conference, from Fairbanks, Alaska, displaying a COVID-19 vaccination sticker. Alaska has been one of the leading states in the percentage of its population to be vaccinated against COVID-19. But some of Alaska’s highest vaccination rates have been in some of its most remote, hardest-to-access communities, where the toll of past flu or tuberculosis outbreaks hasn’t been forgotten. (Rachel Saylor/Tanana Chiefs Conference via AP)
Alaska tribal health groups distribute vaccine far and wide

“We live for our children. We want to bring that sense of normalcy back in our lives.”

In this June 20, 2019, file photo, the Supreme Court is seen in Washington as a storm rolls in. The Supreme Court seems inclined to say that hundreds of millions of dollars in coronavirus relief money tied up by a court case should benefit Alaska Natives, rather than be spread more broadly among Native American tribes.The justices were hearing arguments April 19, 2021, in a case involving the massive pandemic relief package passed last year and signed into law by then-President Donald Trump. (AP Photo/J. Scott Applewhite, File)
Court seems ready to send virus funds to Alaska Natives

The federal government set aside more than $530 million for the so-called ANCs.

A vial of Pfizer’s COVID-19 vaccine is seen at Central Emergency Services Station 1 on Friday, Dec. 18 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Alaska hits 40% fully vaccinated

In the Kenai Peninsula Borough, 35.3% of Alaskans 16 and up are fully vaccinated.

The Kenai National Wildlife Refuge headquarters in Soldotna, Alaska, on Wednesday, Jan. 30, 2019. (Photo by Victoria Petersen/Peninsula Clarion)
Wildlife refuge to host spring cleanup

On April 30 and May 1, volunteers will help collect any litter or debris at the refuge that’s been covered by snow all winter.

Logo for Alaska Department of Motor Vehicles (doa.alaska.gov)
Seward DMV loses both employees, closes temporarily

The two employees worked within the city and are the only ones trained to operate the DMV.

Most Read