sales tax

With businesses shut down or slowed down due to the COVID-19 pandemic, that doesn’t just hurt employees and owners, it hurts the local governments that rely on sales tax revenue generated from those businesses.

In the Kenai Peninsula Borough, that also hurts the school district, as sales taxes are the pot of money that’s used to fund schools. The Kenai Peninsula Borough Assembly and KPBSD Board of Education held a joint work session Monday afternoon to discuss the numbers.  

Borough Finance Director Brandi Harbaugh painted a bleak picture.

"We estimate between 15 and 30 percent reduction in sales tax revenues over the next year and that coincides to a fairly large number for the borough. We’re looking at approximately $5 million loss at the end of this fiscal year, which we did not budget for. And then an additional $6 million to $7 million in next fiscal year. So, we anticipate a 15 percent reduction next year and then it slowly recovers over the next 24 months and it actually relates to a little over $11 million sales tax loss,” Harbaugh said.

Online shoppers on the Kenai Peninsula can expect to pay a little extra for their purchases soon, as the Kenai Peninsula Borough and communities move toward a system of collecting sales taxes from online sales.

The city of Kenai passed a resolution at its meeting Wednesday that paves the way for collecting taxes from online sales.

The Alaska Remote Seller Sales Tax Commission was formed to create a centralized way to collect sales taxes when Alaskans shop online. Collected taxes will be distributed to the borough, which will keep its share and divvy out the amounts due to the cities of Kenai, Soldotna, Seward and Homer.

Soldotna joins new statewide sales tax commission

Nov 14, 2019

The Soldotna City Council voted Wednesday night to join an inter-governmental alliance formed to create a streamlined, statewide process in collecting sales tax on internet purchases. Until now, cities and boroughs in the state were on their own in trying to track down all the tax owed locally by online sellers out of state.
    Councilman Dave Carey said he was supporting it to ensure Soldotna got its fair share.

ECON 919 - Ballot Prop 2 - Sales Tax Cap Increase

Sep 20, 2019


Between all the mudslinging and negative social media ads, some of the candidates for borough assembly have actually taken the time to talk about their thoughts on one of the ballot propositions voters will decide in October.



New online sales taxes cause confusion for municipalities

Feb 11, 2019
City of Kenai


Municipalities are still trying to figure out the best way to handle new sales tax collection from online retailers. Amazon, most notably, filed with the borough this month to begin collecting and paying sales tax. But that has left a lot of questions, since the zip codes between borough and city residents can overlap.