City should not encourage pulltabs' sales tax stalling

Posted: Wednesday, July 11, 2001

Deputy Mayor John MacKinnon is right. Neither the law nor politics will allow the Juneau Assembly to forgive about $1 million in unpaid taxes, penalties, interest and attorney's fees owed by three Juneau pulltab operations.

Year after year, some pulltab co-ops ignore the law and court decisions, shift their revenues questionably, and use the charities they are supposed to benefit as hostages in negotiations with the city about the terms of these long overdue payments.

A front page headline in Tuesday's Empire spoke of the city's latest efforts to "hammer out" a pulltab repayment plan. The text of the article made it clear that the city never picked up its hammer and has no intention of doing so now.

Less than a month after winning a Superior Court ruling on the tax liability of the pulltab co-ops - the issue was so clear-cut that retired Supreme Court Justice Jay Rabinowitz saw no need to waste time with a trial - MacKinnon set the tone in February, saying: "If we hold firm (on the total amount), we run the risk of getting zip."

On Monday, he still was discussing aloud whether it was possible to forgive the debt, concluding with what seemed to be reluctance that the city was going to be forced to try to persuade the pulltab scofflaws that it was time to pay up.

The claim by David Massey, a board member with the Multiple Charities Association Co-op, that his organization was "stepping forward to do what we can" is laughable if it means the co-op is ready to talk and stall for a while longer. His claim that the co-op always has paid its charities misses the point by a million dollars.

When the co-ops challenged the sales tax law, they should have placed the taxes into an interest-bearing escrow account for immediate payment in the event of a decision that favored the city. When the judge ruled against them, the co-ops should have paid quickly. At the very least and latest, they should have paid in full - back taxes, penalties, interest and attorney's fees - when the allowable time to file an appeal had passed.

Instead, the co-ops posture as if they've always been good citizens who are now willing to strike a dimes-on-the-dollar settlement unless the city seeks too much too fast, in which case who knows what will happen to the deserving charities cast as pawns in this cynical chess game.

Multiple Charities, Last Chance Co-op and Alaska Native Brotherhood Camp 2 Inc. have set lousy examples for a questionable industry. The city's reluctance to collect in full this debt - money to which the residents of Juneau are entitled - also sets a bad example for those sales tax collectors and taxpayers who may be tempted to see how far the city will bend.

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