Juneau Assembly members on Monday directed the city staff to work with three local pulltab operators to try again to collect $900,000 in sales taxes, penalties and interest owed from past years.
A court ruled in January the pulltab operators owed the money, the bulk of which - about $600,000 - is sales taxes. Collection of delinquent payment by the Last Chance Co-op, Multiple Charities Association Co-op and Alaska Native Brotherhood Camp 2 Inc. has been a subject of discussion for several years.
Time has expired to appeal the ruling so the judgment is final, Deputy City Attorney John Hartle said. At a meeting Monday of the Assembly Finance Committee's subcommittee on pulltabs, Deputy Mayor John MacKinnon suggested city staff members sit down with the organizations that owe money and work out a payment plan.
"Can we forgive the debt? I don't think the law allows or politics allows," he said.
Finance Director Craig Duncan said financial records show the three vendors set aside money for sales taxes, but just didn't pay it.
"The basic question for us now is how do we proceed with collection?" he said.
Duncan said payment negotiations are not unusual, but it might take several years to collect the money.
The city has collected about $2.6 million in sales taxes from Juneau pulltab operators since 1997. It's 80 percent of what the operators collectively owed to the city. Because other operators have paid, the city can't forgive the uncollected taxes, Duncan said.
A city analysis also showed cash that could have been used to pay sales taxes was lost in Kenai bingo operations, and money was improperly transferred among the operators, Duncan said. The state Department of Revenue has revoked the Last Chance Co-op's gaming permit for one year because of violations of state law in 1999.
David Massey, a board member with Multiple Charities Association Co-op, said the organization is current with this year's sales tax payments and is willing to work with the city to pay the owed taxes.
"We're stepping forward to do what we can do," he said.
The co-op's financial situation has improved because it has moved some of its operations to
communities outside of Juneau that don't charge sales tax and it isn't facing the large legal and accounting bills it has had to pay in the past, he said. Massey said the organization always has paid its charities fully.
"Our books are completely open and have been reviewed by everyone in the world," he said. "We're taking corrective action to deal with this openly and fairly."
In January, the three organizations lost an appeal in state Superior Court that challenged a 1 percent increase in city sales tax on gross receipts from pulltabs. The organizations stopped paying the city's 5 percent sales tax after the increase went into effect in 1997.
Joanna Markell can be reached at email@example.com.
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