City of Kenai could see 'six-figure revenues' through Amazon sales tax

Feb 26, 2019

Last week the Kenai City Council discussed online retailer Amazon's plans to start collecting and remitting taxes on the Kenai Peninsula. Mayor Brian Gabriel said the action should help put local business on a better footing.

“I'm all for a fair playing field and I think by working towards taxing products that are bought online but originate here, point of sale within our community, that we are at least leveling the playing field and being more fair to our brick and mortar stores that have come here invested in the community and providing their services.”

Gabriel said Amazon's move is fair to both local businesses and to the city.

"I just can imagine it’s pretty discouraging for them when they've made an investment in the community and they have to charge more than somebody else has to charge online. It's an unfair advantage and so I'm certainly glad to see — it shouldn't be a windfall or simply collecting taxes that the city's do based on our tax code. So that's that needs to be clarified also,” Gabriel said.

Councilman Robert Peterkin asked about the size of the potential new stream of revenue, to which City Manager Paul Ostrander gave a surprising number.

“I know you may not be prepared for this or if it's even appropriate to ask but like how much money are we projecting?” Peterkin asked. 

“Thank you, Mayor Gabriel. Councilmember Peterkin, everyone right now is really guessing you know you you do see some municipalities that are coming out with projections on what they think just this Amazon change will make. For example Juneau is projecting a significant amount of revenue based on their 5% sales tax within their municipality. Based on their numbers, if you are going to look at our population and our sales tax rate we are likely going to see again, based on if their information is accurate. We're going to see at least six-figure revenues from this change with Amazon here in the city of Kenai,” Ostrander said.

“I guess a little follow up as when I heard the Netflix and that so we've actually got some money in our — not significant so far just it's it's we're hoping for it to be I think is what I'm hearing you say,” Peterkin said.

“Councilmember Peterkin we have been receiving remittances from Netflix for a number of years. It is not significant. I think Terry actually had the exact number I don't know if you recall what it was. We did look at it last week. I remember it was not a significant amount of revenue but we have been receiving revenue from from Netflix for for some time,” Ostrander said.Since it was just a discussion, no vote or action was taken by the council.

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