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City and pulltab operators near tax agreement

Posted: Thursday, January 17, 2002

The city is close to agreement with two Juneau pulltab operators to collect roughly $450,000 in outstanding sales tax.

The city has worked out agreements with Multiple Charities Association Co-op and the Last Chance Co-op that outline a payment plan for collecting back taxes, City Finance Director Craig Duncan said. The agreements now will go before a dozen nonprofit groups that benefit from pulltab revenues, he said.

A third vendor Alaska Native Brotherhood Camp 2 is waiting to see the agreements with the other two groups before it starts talks with the city, Duncan said. According to a notice published by the city in December, Multiple Chance owes $235,608, Last Chance owes $213,163 and ANB Camp 2 owes $215,734 in taxes.

The agreements cover taxes and interest from 1998 to 2001, according to Deputy City Attorney John Hartle. While the groups will not be required to pay penalties owed the city, they will pay 5 1/2 percent interest per year from the time they incurred the debt, he said. The city reduced the interest rate to its actual costs, Hartle said.

The groups will have 10 years to pay the city, although some have indicated they may pay sooner, Hartle said.

"We have an agreement in principal and we're finalizing the paperwork to embody the agreement," he said.

The amount of money that each nonprofit will pay varies because different groups participated in gaming for different periods of time, according to Ron Lorensen, an attorney who represented Multiple Charities and Last Chance in discussions with the city. Each group will pay $200 for attorney fees under the agreement, he said.

"I think it's fair on both sides. Obviously, it will bring a conclusion to an issue that's been a concern to the city for a while," he said.

The city earlier calculated attorney fees for all three groups at about $66,000, Hartle said.

The pulltab operators unsuccessfully challenged a 1 percent increase in city sales taxes before the city's Sales Tax Board of Appeals, the Juneau Assembly and state Superior Court.

Following the court ruling, Assembly members directed city staff in July to work out a payment plan with the groups. One of the reasons an agreement has taken so long is that the dozen nonprofit groups known as multiple-beneficiary permittees were working out a payment plan among themselves, Duncan said.

"We're pleased with the responsiveness from that group," he said.

The organizations have been paying city taxes in recent months, so the agreements cover taxes not paid during the appeal process, Duncan said.

"They have been attempting to comply," he said.

Assembly member Don Etheridge, who was the chairman of subcommittee that handled the pulltab issue, said the agreement will allow the city to collect the taxes without jeopardizing the groups that benefit from the pulltab proceeds.

"I'm really happy because it's not going to do away with the funding for the kids' programs that a lot of that money is used for," he said. "We'll at least get the tax that's due plus some interest, plus maintain programs for the kids."

Joanna Markell can be reached at joannam@juneauempire.com.



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