City Finance Director Jeff Rogers speaks to the Juneau Chamber of Commerce about remote taxes being paid to the city during its weekly luncheon at the Moose Lodge on Thursday, Nov. 7, 2019. (Michael Penn | Juneau Empire)

City Finance Director Jeff Rogers speaks to the Juneau Chamber of Commerce about remote taxes being paid to the city during its weekly luncheon at the Moose Lodge on Thursday, Nov. 7, 2019. (Michael Penn | Juneau Empire)

Empire Live: What’s the Remote Sellers Tax? City finance director Jeff Rogers at the Chamber Luncheon

Taxes on sales from online vendors like Amazon, how will it work?

Summary: It’s not yet a done deal, but Rogers seems confident the implementation will roll out smoothly. While nobody enjoys paying taxes, this is something many states are already doing and could provide the city with much need revenue for essential services.

Questions:

Reduction in other taxes?

I don’t know. There is a deficit and things like remote sales tax could fill those gaps. The city has a obligation for things like child care, as the city wrestles with those things my guess is that the assembly will look at those things.

Alaska has no sales tax, any other states?

Five, but none of those states allow local municipalities to have their own sales tax. MuniRevs has been very successful in Colorado, which has both state and local sales tax. So they have a lot of experience with various jurisdictional needs.

Will we pay the administrative costs for MuniRevs?

Yes, but I think the advantages of working through an existing, streamlined system is still worth it.

Wouldn’t it be easier for the state to collect tax? It seems like there’s a burden on local municipalities and vendors.

If the state wants to have a sales tax we would want to assume the state would remit a fair amount of taxes to local jurisdictions.

As we layer on tax costs, there’s no incentives to keep certain kinds of businesses in Juneau?

I don’t think it’s a fair characterization to say this a new tax, why would a customer buy from another vendor if they can get it for the same price? There’s a lot of sensitivity about taxes and the cost of living.

Will the out of borough exemption continue?

If you ship out of Juneau you will pay no Juneau taxes, but you will pay taxes to the jurisdiction you’re sending to. The advantage of a program like MuniRevs is that they will be doing the calculating for each local jurisdiction’s taxes.

Customer experience? Unintended consequences in jurisdictions where this already happens?

I’m sure buyers will find ways to (legally) avoid a tax, but there’s a point where trying to avoid a tax becomes more expensive than the tax. I don’t know that we’re going to see people’s behavior change in some significant ways. Every state is on it’s way to this.

12:47 p.m.

A “use tax ” is when a consumer is required to pay taxes on purchases made out of the borough. It’s really difficult to collect. The commission has decided to “punt the decision” on a use tax because it’s just too complicated, Rogers says.

But a use tax is something the commission is going to have to deal with eventually.

12:45 p.m.

We are trying to solve a systemic competitive inequity for Alaska-based businesses, Rogers says.

CBJ tax office did it’s own kind of “napkin math” on how much sales tax could be collected. Rogers says it’s about $1.5-2 million. But MuniRevs, the third party facilitator the city has contracted with, has estimated $3-5 million. Rogers says that he believes the city won’t see the full amount of potential tax collection for the first few years of the program.

We have had as a principal to apply the same standard to sellers in state as those in the lower 48, Rogers says.

12:40 p.m.

“It’s not the journey, but the destination,” Rogers says. A sale should only be taxed once. But there is a possibility that two tax jurisdictions might try to tax the same remote sale.

There’s source taxation and destination taxes (taxed where it’s from or where it arrives). Most remote sales are destination taxed.

Vendors must pay taxes if they cross a threshold over either $100,000 in sales or 100 sales, in most jurisdictions.

There’s an app for that, Rogers says. The vendor is a key piece for every state that have implemented taxes on remote sellers. There are third party companies which will facilitate collection and remittances between vendors and taxing jurisdictions.

Who is in control? The agreement makes very clear that cities get to control it’s own sales tax rates and it’s own exemptions, Rogers says. There’s no loss of local control on how much our sales tax is and who is to pay it.

12:25 p.m.

The Alaska Municipal League brought several cities together to work on a plan to establish a single statewide system compliant with the Wayfair decision. Alaska has no state sales tax and so it was left to municipalities to dictate the terms of a state-wide program.

But a Supreme Court case out of South Dakota, South Dakota vs. Wayfair, said that local sales taxes could be levied on online retailers even if a company has no physical presence in that state.

Buying local is complicated by the fact that buyers can often purchase the same items available from local vendors, often at a lower price and without local sales tax, Rogers says.

12:20 p.m.

There’s about a billion dollars in sales and a five percent sales tax, Rogers says, which produces about $50 million for the city each year.

There are many exemptions. We exempt $1.3 billion, mainly out of borough and retail exemptions.

Amazon started collecting taxes voluntarily collecting sales tax in places where the company felt it had a physical presence, Rogers says, and that money was sent to the city.

12:15 p.m.

This week at the Juneau Chamber of Commerce Luncheon, City and Borough of Juneau Finance Director Jeff Rogers talks about remote sellers sale tax.

The Assembly recently authorized the city to join the Alaska Remote Seller Sales Tax Commission which will work on developing laws for collecting taxes from sales conducted remotely, i.e. online via vendors like Amazon.


• Contact reporter Peter Segall at 523-2228 or psegall@juneauempire.com.


More in News

(Juneau Empire file photo)
Aurora forecast through the week of Nov. 17

These forecasts are courtesy of the University of Alaska Fairbanks’ Geophysical Institute… Continue reading

Juneau Police Department cars are parked outside the downtown branch station on Thursday. (Mark Sabbatini / Juneau Empire)
JPD’s daily incident reports getting thinner and vaguer. Why and does it matter?

Average of 5.12 daily incidents in October down from 10.74 a decade ago; details also far fewer.

(Michael Penn / Juneau Empire file photo)
Police calls for Monday, Nov. 18, 2024

This report contains public information from law enforcement and public safety agencies.

The Douglas Island Breeze In on Wednesday. (Mark Sabbatini / Juneau Empire)
New owner seeks to transfer Douglas Island Breeze In’s retail alcohol license to Foodland IGA

Transfer would allow company to take over space next to supermarket occupied by Kenny’s Liquor Market.

A butter clam. Butter clams are found from the Aleutian Islands to the California coast. They are known to retain algal toxins longer than other species of shellfish. (Photo provided by the Washington Department of Fish and Wildlife)
Among butter clams, which pose toxin dangers to Alaska harvesters, size matters, study indicates

Higher concentrations found in bigger specimens, UAS researchers find of clams on beaches near Juneau.

An aerial view of people standing near destroyed and damaged buildings in the aftermath of Hurricane Helene flooding on Oct. 8, 2024 in Bat Cave, North Carolina. (Mario Tama/Getty Images)
Members of U.S. Senate back disaster aid request amid increasing storm severity

WASHINGTON — The Biden administration’s request for nearly $100 billion in natural… Continue reading

Media members and other observers gather at the Alaska Division of Elections office on Wednesday evening as the results of all ballots, including ranked choice tabulations, were announced. (Mark Sabbatini / Juneau Empire)
Ranked choice voting repeal fails by 0.2%, Begich defeats Peltola 51.3%-48.7% on final day of counting

Tally released Wednesday night remains unofficial until Nov. 30 certification.

Looking through the dining room and reception area to the front door. The table will be covered with holiday treats during the afternoon open house. The Stickley slide table, when several extensions are added, provides comfortable seating for 22 dinner guests. (Laurie Craig / Juneau Empire)
The Governor’s House: Welcoming Alaskans for more than 100 years

Mansion has seen many updates to please occupants, but piano bought with first funds still playable.

The language of Ballot Measure 2 appears on Alaska’s 2024 absentee ballots. The measure would repeal the states open primary and ranked choice voting system. (Andrew Kitchenman/Alaska Beacon)
Count tightens to 45-vote margin for repealing Alaska’s ranked choice system going into final day

State Division of Elections scheduled to conduct final tally at 5 p.m. Wednesday.

Most Read