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Go after pulltab revenues

Posted: Friday, February 02, 2001

It really is no surprise that retired Supreme Court Justice Jay Rabinowitz ruled three pulltab operations may not decide unilaterally that they don't have to pay any sales taxes.

Nor is it a surprise that Rabinowitz would not let the matter go to trial. The issues in the dispute had been identified clearly in 1,300 pages of briefs and motions submitted to the court. A mountain of paperwork, sifted and sorted by common sense and a veteran jurist, produced the correct result.

Pulltab operations generate millions of dollars in revenue annually in Juneau alone. Pulltab operators, like other individuals and corporations, have a legal obligation to pay their taxes. Most of them do. Most also fulfill their contractual obligations toward the charities that employ them. Therefore, it is possible for pulltab operators to pay out money to pulltab winners, to pay rent and employee salaries plus utilities and other overhead, and remit the 5 percent sales taxes and pay 30 percent of revenues to the nonprofits.

The pulltab operations that have not been paying sales taxes include the Last Chance Co-op, which already has been forbidden by the state Tax Division's Gaming Unit from selling pulltabs in 2001 as a result of repeatedly failing to pay its member nonprofits the minimum 30 percent of pulltab proceeds required by law.

The city now must aggressively go after all of the approximately $900,000 in taxes, penalties and interest owed by the operators. Otherwise, they will be rewarded for failing to fulfill the obligations they knew existed when they created their businesses.

Any offer by the negligent pulltab operations to settle for dimes on the dollar should be rejected. Any assertion that the money does not exist to pay the full amount due should be met with skepticism.

The offending pulltab operators have yelled long and hard that they've been done an injustice by the tax. They should have put the taxes they didn't pay into an interest-bearing escrow account. Then their loss in court could be remedied by a simple fund transfer.

The city should not be influenced by fears the charities will suffer. It is not OK to learn to live with being cheated just a little.

Don't fall for the red herrings. Don't give away what has been earned in court.



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