Ketchikan Gateway Borough
 
 
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Information for New Merchants

 

Borough Sales Tax Rate 2.5% - Saxman City Sales Tax Rate 6.5% - City Sales Tax Rate 6.0%

CONGRATULATIONS on your new business venture in the Ketchikan Gateway Borough. The Finance department hopes this brief outline will introduce you to your obligations under the sales tax ordinance.

 

WHO MUST REGISTER?

A person, corporation or other association that is about to make sales, perform services or make rentals shall first register with the finance department. 

A person, firm, partnership, corporation or other business entity shall file an application for registration with the finance department, on a form provided by the borough, prior to making any retail sales, rendering any services, making rentals within the borough or the opening of an additional place of business in the borough. The completed application shall be returned to the finance department along with a copy of the business entity's Alaska State business license. Each business entity shall be registered under the advertised name, and each separate business shall be registered under its own account.

Application for Registration

 

YOU HAVE NOW ACCEPTED THE RESPONSIBILITY TO COLLECT AND REMIT SALES TAX:

The tax levied under the provision of this chapter is primarily upon the buyers of said property, rentals, or services, but the tax is payable to the borough by the seller regardless of whether the seller has collected the same from the buyers. It is the duty of each seller to collect from the buyer or consumer the full amount of the sales tax payable on each taxable sale, service or rental, at the time the property sold is delivered, or when the rentals are collected. Every sales which is made within the borough, unless explicitly exempted by this chapter, or subsequent ordinance, shall be presumed to be subject to the tax imposed hereunder in any action to enforce the provisions of this chapter.

Under the sales tax ordinance, there are certain exemptions from the sales tax. It is the responsibility of the buyer to provide proper documentation to the merchant that a sale would be exempt from the sales tax. It is the merchant's responsibility to document the exempt transaction according to borough code.

 

REPORTING REQUIREMENTS

New Businesses - New businesses will be required to file and transmit collected sales taxes monthly for a period of no less than six (6) months. Upon expiration of this initial six (6) months, the borough will determine if the business has complied with all provisions of this chapter before converting the business to quarterly reporting. This decision will be based on previous filings and is at borough discretion.

Filing of Tax Returns and Payment of Tax - The tax levied by this title is due and payable at the expiration of each quarter of each calendar year. It is the duty and responsibility of every seller liable for the collection of any tax imposed herein, to file with the borough upon forms prescribed and furnished by the borough. The completed return, together with remittance in full for the amount of tax due, shall be transmitted to and received by a borough employee working in the Finance department on or before 5:00 p.m.. local time, on the last day of the month succeeding the end of each said quarter.

All sales tax returns and billings shall be mailed to the address of each seller or postal box designated in writing by the authorized representative of each seller.

Failure to receive a sales tax return or billing shall not relieve the seller from its obligation to timely remit all sales taxes. Merchants are responsible for obtaining the proper forms in ample time to report and remit within the time indicated by the ordinance.

Reporting is Required - Any person who filed or should have filed a sales tax return for the prior quarter shall file a return even though no tax may be due. This return shall show why no tax is due, or, if the business is sold, than the person to whom it was sold, the date it was sold, and the address and telephone number of the person to whom it was sold.

 

SALE OF BUSINESS, CLOSURE 

If any seller sells his business to another person, he shall make a final sales tax return within five (5) days after the date of selling the business; and his purchaser, successor, or assigns, shall withhold a sufficient portion of the purchase money to pay the amount of sales taxes, penalties and interest due and unpaid to the borough. Any unpaid tax liabilities, including interest and penalties, become personal liabilities of the new owner.

 

DUTY TO KEEP BOOKS; INVESTIGATION 

Every seller shall keep and preserve suitable records of all sales made by him, and such other books or accounts as may be necessary for the borough to determine the amount of tax for the collection of which he is liable hereunder. Every person shall keep and preserve for a period of two (2) years all invoices of goods and merchandise purchased for resale, and all such books, invoices and other records as may be necessary, all of which are open for examination at any reasonable time by the borough, the borough manager, or his or their designee.

 

RESALE CERTIFICATES; MISUSE 

The borough's finance director shall issue resale certificates to be utilized in purchases for resale which are exempt from sales tax due to the exception providing governing items for resale. Resale certificates shall be valid for a period of one (1) year and shall be reissued annually by the borough upon determination that a seller has established compliance with the resale exemption. Resale certificates shall be surrendered when the holder ceases doing business. Misuse of a resale certificate is a violation subject to penalty.

Misuse of a resale certificate shall constitute a misdemeanor and is punishable by a fine up to five hundred ($500.00), plus costs of prosecution, in addition to civil action that may be pursued by the borough.

Resale Application

 

TRANSIENT OCCUPANCY TAX 

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax on the rent charged by the operator.

Borough Rate 4% - Saxman Rate 7% - City Rate 7%

Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the rent is collected from every transient. If the operator fails to collect the tax imposed by this chapter, the operator shall be liable for the tax jointly and severally with the transient. The amount of tax shall be separately stated from the amount of rent charged, and each transient shall receive a receipt for payment from the operator.

Filing and Payment of Tax - The tax levied by this title is due and payable at the expiration of each quarter of each calendar year. It is the duty and responsibility of every seller liable for the collection of any tax imposed herein, to file with the borough upon forms prescribed and furnished by the borough. The completed return, together with remittance in full for the amount of tax due, shall be transmitted to and received by a borough employee working in the finance department on or before 5:00 p.m.. local time, on the last day of the month succeeding the end of each said quarter.

Failure to receive a transient occupancy tax return or billing shall not relieve the seller from its obligation to timely remit all sales taxes. Merchants are responsible for obtaining the proper forms in ample time to report and remit within the time indicated by the ordinance.

Reporting is Required - Any person who filed or should have filed a transient occupancy tax return for the prior quarter shall file a return even though no tax may be due. This return shall show why no tax is due, or, if the business is sold, than the person to whom it was sold, the date it was sold, and the address and telephone number of the person to whom it was sold.

Transient Occupancy Form

 

EXEMPTIONS 

Not imposed on rents of less than $3.00 per day.

Casual or isolated rentals of rooms in a single family dwelling such as a sublet of a room or rent sharing agreement are not taxed.

Rentals to Federal, State of Local government agencies and their instrumentalities when paid directly by said agency.

Senior Citizens are NOT exempt from Transient Occupancy Tax

Record of Sales Tax Exemptions

 

RESPONSIBILITIES OF THE MERCHANT

It is your responsibility to comply with the laws and regulations that pertain to your business environment in which you operate. If you are still uncertain of how the tax applies in general or to specific transactions please call or write the revenue department.

Thank you in advance for your efforts in collecting an remitting sales and transient occupancy tax according to our ordinances. Please contact us for answers to any of your questions.