Online retailers begin collecting sales tax

Feb 7, 2019

 

The Alaska Municipal League is working to streamline online sales tax collection for cities and boroughs across the state

  

The Kenai Peninsula Borough can start expecting sales tax receipts from one of the world’s most popular online retailers. A Supreme Court decision last year paved the way for municipalities to begin collecting sales tax from online retailers such as Amazon. The borough’s finance director, Brandi Harbaugh, says like all sales tax collectors, Amazon will be reporting on a quarterly basis.

“We will have additional information probably in the month of May. However, it is proprietary information at the account level, so it will be determined as to what type of information we can provide overall.”

Amazon is the big name, but online sales of various stripes have been taxed by the borough for years. Your monthly Netflix payment, for instance, and orders from other retailers like Overstock.com.

Harbaugh says the borough has provided Amazon with the information necessary to delineate borough customers from those in the cities. The Alaska Municipal League is also trying to develop a plan that would capture more online sales tax dollars, but in a more organized way than store by store, sale by sale.

“We still think pursuing that is of great value. Like we indicated, Amazon is only collecting (sales tax) from Amazon.com and Amazon warehouse (not third party sellers). So, there are many other merchants as well as large online sellers that we would benefit from, that would create equity throughout the borough as well as the local sellers. For instance, Costco, as well as other large sellers.”

The Alaska Municipal League is expected to have a plan for a centralized collection effort ready in May. Revenues from a remote sellers tax have been estimated at around $1.5 million annually for the borough.