Remote sellers tax yields $125K in first three quarters of 2020
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The Haines Borough's loss of pandemic related sales tax revenues this summer has been offset by the near doubling of taxes collected from online retailers such as Amazon, REI, Target and other remote sellers.
Sales tax revenues are down 30% between January through October 2020 compared to 2019, a loss of about $923,000.
The remote sellers tax, which in 2020 included 188 remote businesses that now remit sales taxes to the borough, yielded nearly $128,000 in remote sales tax revenues in the same time period. Between January through October 2019, that number was only $65,000.
The increase, says borough finance director Jila Stuart, is the result of the Alaska Remote Sellers Sales Tax Commission, which has worked to register nearly 800 remote businesses statewide.
"The commission came into existence in 2020," Stuart said. "Before the commission was formed the Borough had maybe a couple dozen online or remote sellers. Now the borough receives returns from all of the businesses registered with the commission."
The list of registered businesses includes BestBuy, Zappos.com, L.L. Bean, Kohls, QVC, Walmart, Petco, Shutterfly and Zulily.
A complete list can be found at https://arsstc.org/wp-content/uploads/2021/01/ARSSTC-Sellers-2021.01.11.pdf.
In January 2018, Amazon announced it would begin collecting and remitting sales tax to Alaska communities, including the Haines Borough's 5.5% sales tax. The announcement caused some confusion about how online retailers such as Amazon would follow the 105 taxing jurisdictions in Alaska. The Alaska Municipal League has since spearheaded the effort to create and establish a common set of definitions that organize equitable collection and remittance of sales tax online.
Stuart represents Haines on the commission.
Online retailers' voluntary decision to charge and remit sales tax in Alaska comes in the wake of a 2018 U.S. Supreme Court decision that eliminated a previous "physical presence requirement" in South Dakota for collecting sales tax.
The borough receives a significant boost to sales tax from the influx of summer tourists and seasonal workers during cruise-ship season. This year, the pandemic resulted in the cancellation of all cruise ship sailings. The continued closure of the Canadian border prevented cross-border tourism.
The Haines Borough Assembly budgeted for a 50% loss in sales tax last spring. The additional revenues will likely sit in savings for use in next fiscal year's budget, according to former interviews with assembly members.
