The City of North Pole would consider implementing an online sales tax, although the development of such a tax would still be a few years out.
Online sales are currently exempt from sales tax in the North Pole Municipal Code. Section 4.08.050 of the code notes as its seventh exemption: “Goods and services purchased through mail order catalogs or the Internet.”
North Pole Mayor Mike Welch said he would be “a proponent to going to the online sales tax” as it would help make up for shortfalls in the community revenue sharing stream.
Welch attended an Alaska Municipal League workshop on online sales tax in June this year. The Alaska Municipal League is a statewide nonprofit representing local level government and made up of representatives from Alaska’s cities, boroughs and municipalities.
A little over two weeks ago the Kodiak City Council passed a resolution to create and enforce an online sales tax code. As part of the resolution, the city is joining the Alaska Remote Seller Sales Tax Commission, which is looking to contract with the Alaska Municipal League.
North Pole is in the top 12 communities in the state in what it takes in for sales tax, according to Welch, and developing an online sales tax is not just a matter of striking the exemption from the code.
“It’s more complex than that and I do believe we’re somewhere close to a year and a half out statewide,” Welch said.
The city would have to hire a contract service provider, or CSP, according to Welch, who would know the nuances of tax municipality and tax jurisdiction, and learn about existing exemptions.
The CSP would use Geographic Information System mapping to understand what properties lie within the city limits of North Pole and what properties are within 99705 zip code, but not the city itself. This would determine for the city who could be taxed for their online purchases.
Welch confirmed the city has been in talks with the Alaska Municipal League about finding a contract service provider.
He said he thinks the process will be slow going. The forecast from the Alaska Municipal League when they disbanded in June, according to Welch, was that the online sales tax might be something they figure out as late as fall of 2021.
“(That timeline) would apply to anybody who is going to do that under the auspices of doing it through the AML,” Welch said.
Welch said he believes at the latest it would be a sincere budget consideration by October 2021.
Contact staff writer Kyrie Long at 459-7510. Follow her on Twitter at: twitter.com/FDNMlocal