For the past five years, the Last Chance pulltab cooperative repeatedly has failed to pay the required 30 percent minimum to which its member nonprofits are entitled.
During the same period, the co-op repeatedly claimed more expenses than are allowed.
Since 1998, Last Chance and two other pulltab co-ops - Alaska Native Brotherhood Camp 2 Inc. and Multiple Charities Association Co-op - have disputed and refused to pay city sales tax on pulltab revenues.
While refusing to pay city sales taxes, Last Chance nevertheless deducted the amount of sales taxes it was supposed to pay in filing its reports with the state Tax Division's Gaming Unit.
By taking the deduction on taxes it did not pay, Last Chance reduced the amount of money due to be returned to qualified nonprofits.
This is a textbook example of trying to have it both ways.
We agree that the decision about the legality of the sales tax obligation deserves to be made by someone other than the taxing authority. In this case, the decision will be made at the Superior Court level by retired Alaska Supreme Court Justice Jay Rabinowitz. We trust the distinguished jurist to make a fair decision based on law.
If the ruling favors Last Chance, ANB Camp 2 Inc. and Multiple Charities, other pulltab operations that have been paying the sales tax should be entitled to a refund, however disruptive to the city budget that may be. Even if the ruling favors the three co-ops, the city and state should use every component of their authority to require Last Chance to pay its member nonprofits every cent to which they are entitled. Excessive expenses from the pulltab operation should be disallowed if Last Chance - shut down by the state since Jan. 1 - is permitted to resume business.
If the sales tax ruling goes against the co-ops, back taxes should be collected in full - plus interest.
Concern for the well being of the nonprofits should not be allowed to be used as leverage by shady pulltab operators. Yes, 10 or 20 percent of pulltab revenue is better than nothing, but a 30 percent agreement should be enforced or a new operator found.
Any suggestion that the city accept a dimes-on-the-dollar sales-tax settlement is to be rejected.
If tracking down the money looks to the city like it's going to be more trouble than it's worth, just remember: That may be exactly what the pulltab operator was counting on.
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