Although there is no statewide sales tax in Alaska, local remote sales tax is rolling out across the state city by city under an intergovernmental agreement finalized October 11, 2019. The Intergovernmental Agreement establishes the Alaska Remote Sellers Sales Tax Commission Alaska Remote Seller Sales Tax Commission, which is charged by member cities to govern a streamlined, single-level administration of sales tax collection and remittance in the state.
On January 6, 2020, the Commission passed a Remote Seller Sales Tax Code enabling cities and boroughs to implement remote sales tax collection through a “centralized administration of sales tax collection, remittance, and enforcement on sales made by remote sellers.”
To date, 17 local jurisdictions have adopted the agreement and rolled out remote sales taxes, including:
|Juneau, City & Borough||2/3/2020|
|City of Wasilla||2/24/2020|
|Kenai Peninsula Borough||2/24/2020|
|City of Kenai||2/24/2020|
|City of Homer||2/24/2020|
|City of Seldovia||2/24/2020|
|City of Soldotna||2/24/2020|
|City of Seward||2/24/2020|
|City and Borough of Wrangell||3/01/2020|
|City of Nome||3/09/2020|
|City of Adak||3/17/2020|
|City of Palmer||3/24/2020|
|City of Cordova||04/01/2020|
|City of Gustavus||04/13/2020|
|City of Kodiak||4/18/2020|
In all, the Commission’s January board meeting lists 25 local government members, indicating more cities will be coming online with remote sales tax. The commission will notify registered sellers as additional cities or boroughs adopt the Remote Sellers Sales Tax Code.
Collection began according to the effective date of member municipalities. Out-of-state sellers that exceed the state’s economic nexus thresholds ($100,000 in sales/ 200 transactions or 100 per Alaska Municipality website) are required to register and start collecting sales tax within 30 days of the implementation dates listed above.
What’s remarkable in Alaska is that these jurisdictions have come together to provide a single, statewide administrative system for vendors to register and remit these local sales taxes. Using the Alaska Remote Sellers Sales Tax Commission Portal, remote sellers register once and remit sales taxes for all cities and boroughs through a single portal. This eliminates the need, as seen in other states, to register and pay city by city and removes a serious compliance burden. Something Colorado is working on, Alabama and Louisiana have yet to do and where Arizona has mostly figured this out.
Streamlined Sales Tax (SSUTA)
Sales and use tax (SUT) has been complicated for so long that efforts to streamline SUT began back in 2000 with the Streamlined Sales Tax Governing Board, Inc., which promulgated the Streamlined Sales and Use Tax Agreement. This agreement reduces the burden of tax compliance through state level administration and uniformity in SUT collections. Today 24 states have adopted simplification measures in the agreement.
Colorado is the only non-participating state and is actively pursuing its own streamlined sales tax initiative. Efforts to reform Colorado’s outdated system are being promoted at the state level by two key groups, the Legislative Sales & Use Tax Simplification Task Force (task force) and the Simplify Colorado Sales Tax Coalition (coalition). Both have been advancing reform legislation for the last three years, with some notable successes in the creation of a portal to facilitate centralized licensing and collection.
Exactly what’s been happening at the task force will soon be seen by every business in the state of Colorado. Task force efforts to get a state remittance portal for online businesses to easily collect and remit the exact amount of tax to the state is expected to go live as early as June 2020. Read more at: Briefing on Sales and use Tax Reform in Colorado
So, this bring us to 45 states plus the District of Columbia plus, now, 17 local Alaska jurisdictions attempting to use Wayfair to feed their coffers. With this much complexity, rate automation is your only solution to manage tax calculations. Don’t go it alone – taxability decisions, nexus and rate decisions are complicated even with automation. Let us help!
SSUTA Resources: Remote Seller Guidelines
Let’s Talk Tax
Judy Vorndran can be reached at email@example.com or 720.227.0093.
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