CSHB 293(W&M): "An Act relating to a state sales and use tax; relating to taxes levied by cities and boroughs; providing authority to the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement; increasing the motor fuel tax and repealing the special tax rates on blended fuels; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 293(W&M) 01 "An Act relating to a state sales and use tax; relating to taxes levied by cities and 02 boroughs; providing authority to the Department of Revenue to enter into the 03 Streamlined Sales and Use Tax Agreement; increasing the motor fuel tax and repealing 04 the special tax rates on blended fuels; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 28.10.021(a) is amended to read: 07 (a) The owner of a vehicle subject to registration shall apply for registration 08 under this chapter by properly completing the form prescribed by the commissioner 09 under AS 28.05.041. Before the issuance of a certificate of registration by the 10 department, the owner shall 11 (1) pay all registration fees and taxes required under this chapter, 12 [AND] federal heavy vehicle use taxes required under 26 U.S.C. 4481 (Internal 13 Revenue Code of 1954), and the sales or use tax levied under AS 43.44.010; 14 (2) unless the owner qualifies as a self-insurer under AS 28.20.400 or
01 is exempted from obtaining liability insurance under AS 28.22.011, certify to the 02 department the existence of a motor vehicle liability policy that complies with 03 AS 28.22.011 for the vehicle being registered; in this paragraph, "certify" means to 04 indicate by check-off on the vehicle registration form prescribed by the department the 05 existence of a policy of insurance, if a policy is required at that time, and the intention 06 to continue the policy or obtain a policy as required by this subsection; and 07 (3) comply with other applicable statutes and regulations. 08 * Sec. 2. AS 28.10.021(a) is amended to read: 09 (a) The owner of a vehicle subject to registration shall apply for registration 10 under this chapter by properly completing the form prescribed by the commissioner 11 under AS 28.05.041. Before the issuance of a certificate of registration by the 12 department, the owner shall 13 (1) pay all registration fees and taxes required under this chapter and 14 [,] federal heavy vehicle use taxes required under 26 U.S.C. 4481 (Internal Revenue 15 Code of 1954) [, AND THE SALES OR USE TAX LEVIED UNDER AS 43.44.010]; 16 (2) unless the owner qualifies as a self-insurer under AS 28.20.400 or 17 is exempted from obtaining liability insurance under AS 28.22.011, certify to the 18 department the existence of a motor vehicle liability policy that complies with 19 AS 28.22.011 for the vehicle being registered; in this paragraph, "certify" means to 20 indicate by check-off on the vehicle registration form prescribed by the department the 21 existence of a policy of insurance, if a policy is required at that time, and the intention 22 to continue the policy or obtain a policy as required by this subsection; and 23 (3) comply with other applicable statutes and regulations. 24 * Sec. 3. AS 29.10.200(51) is amended to read: 25 (51) AS 29.45.650 [AS 29.45.650(c), (d), (e), AND (f)] (sales and use 26 tax); 27 * Sec. 4. AS 29.10.200(51) is amended to read: 28 (51) AS 29.45.650(c), (d), (e), and (f) [AS 29.45.650] (sales and use 29 tax); 30 * Sec. 5. AS 29.10.200(52) is amended to read: 31 (52) AS 29.45.700 [AS 29.45.700(d)] (sales and use tax);
01 * Sec. 6. AS 29.10.200(52) is amended to read: 02 (52) AS 29.45.700(d) [AS 29.45.700] (sales and use tax); 03 * Sec. 7. AS 29.10.200 is amended by adding a new paragraph to read: 04 (64) AS 29.45.720 (specific taxes on tangible personal property and 05 services). 06 * Sec. 8. AS 29.35.110(a) is amended to read: 07 (a) Borough revenues received through taxes levied [COLLECTED] on an 08 areawide basis by the borough may be expended on general administrative costs and 09 on areawide functions only. Borough revenues received through taxes levied 10 [COLLECTED] on a nonareawide basis may be expended on general administrative 11 costs and functions that render service only to the area outside all cities in the 12 borough. 13 * Sec. 9. AS 29.35.110(a) is amended to read: 14 (a) Borough revenues received through taxes collected [LEVIED] on an 15 areawide basis by the borough may be expended on general administrative costs and 16 on areawide functions only. Borough revenues received through taxes collected 17 [LEVIED] on a nonareawide basis may be expended on general administrative costs 18 and functions that render service only to the area outside all cities in the borough. 19 * Sec. 10. AS 29.35.170 is amended to read: 20 Sec. 29.35.170. Assessment and collection of taxes. (a) A borough shall 21 assess [AND COLLECT] property [, SALES, AND USE] taxes and collect taxes, 22 other than general sales and use taxes, that are levied in its boundaries, subject to 23 AS 29.45. 24 (b) Taxes, other than general sales and use taxes, levied by a city shall be 25 collected by a borough and returned in full to the levying city. This subsection applies 26 to home rule and general law municipalities. 27 * Sec. 11. AS 29.35.170 is amended to read: 28 Sec. 29.35.170. Assessment and collection of taxes. (a) A borough shall 29 assess and collect property , sales, and use taxes [AND COLLECT TAXES, OTHER 30 THAN GENERAL SALES AND USE TAXES,] that are levied in its boundaries, 31 subject to AS 29.45.
01 (b) Taxes [, OTHER THAN GENERAL SALES AND USE TAXES,] levied 02 by a city shall be collected by a borough and returned in full to the levying city. This 03 subsection applies to home rule and general law municipalities. 04 * Sec. 12. AS 29.45.650 is repealed and reenacted to read: 05 Sec. 29.45.650. General sales and use tax. (a) Except as provided in 06 AS 04.21.010(c) and AS 29.45.750, a borough may levy a general sales tax on the sale 07 and rental of tangible or intangible property and on services provided in the borough. 08 (b) A borough levying a general sales tax may also by ordinance levy a use tax 09 on the storage, use, or consumption of tangible personal property and on the use of 10 services in the borough. The use tax rate must equal the sales tax rate, and the use tax 11 shall be levied only on purchasers. 12 (c) A tax authorized under this section shall be administered and collected by 13 the state under AS 43.44. The exemptions to a tax authorized under this section shall 14 be identical to those provided in AS 43.44. 15 (d) After December 31, 2007, a municipality may not levy a sales and use tax 16 on the sale or use of tangible personal property or the sale of services exceeding six 17 percent. 18 (e) After December 31, 2009, a municipality may not levy a sales and use tax 19 on the sale or use of tangible personal property or the sale of services exceeding five 20 percent. 21 * Sec. 13. AS 29.45.650 is repealed and reenacted to read: 22 Sec. 29.45.650. Sales and use tax. (a) Except as provided in 23 AS 04.21.010(c), AS 29.45.750, and in (f) and (g) of this section, a borough may levy 24 and collect a sales tax on sales, rents, and on services provided in the borough. The 25 sales tax may apply to any or all of these sources. Exemptions may be granted by 26 ordinance. 27 (b) A borough levying a sales tax may also by ordinance levy a use tax on the 28 storage, use, or consumption of tangible personal property in the borough. The use tax 29 rate must equal the sales tax rate and the use tax shall be levied only on buyers. 30 (c) A person who furnishes proof, in the form required by the borough tax 31 collector, that the person has paid a sales tax on the source on which a use tax is levied
01 by the borough is required to pay the use tax only to the extent of the difference 02 between the amount of the sales tax paid and the amount of the use tax levied by the 03 borough. This subsection applies to a sales tax levied in any taxing jurisdiction 04 whether inside or outside the state. 05 (d) If the assembly charges interest on sales taxes not paid when due, the rate 06 of interest may not exceed 15 percent a year on the delinquent taxes and shall be 07 charged from the due date until paid in full. This subsection applies to home rule and 08 general law municipalities. 09 (e) A borough may provide for the creation, recording, and notice of a lien on 10 real or personal property to secure the payment of a sales and use tax, and the interest, 11 penalties, and administration costs in the event of delinquency. When recorded, the 12 sales tax lien has priority over all other liens except (1) liens for property taxes and 13 special assessments; (2) liens that were perfected before the recording of the sales tax 14 lien for amounts actually advanced before the recording of the sales tax lien; (3) 15 mechanics' and materialmen's liens for which claims of lien under AS 34.35.070 or 16 notices of right to lien under AS 34.35.064 have been recorded before the recording of 17 the sales tax lien. This subsection applies to home rule and general law municipalities. 18 (f) A borough may not levy and collect a sales tax on a purchase made with 19 (1) food coupons, food stamps, or other type of allotment issued under 7 U.S.C. 2011 - 20 2036 (Food Stamp Program); or (2) food instruments, food vouchers, or other type of 21 certificate issued under 42 U.S.C. 1786 (Special Supplemental Food Program for 22 Women, Infants, and Children). For purposes of this subsection, the value of a food 23 stamp allotment paid in the form of a wage subsidy as authorized under 24 AS 47.25.975(b) is not considered to be an allotment issued under 7 U.S.C. 2011 - 25 2036 (Food Stamp Program). This subsection applies to home rule and general law 26 municipalities. 27 (g) A borough may not levy or collect a sales tax on sales, rents, and services, 28 or a use tax on the storage, use, or consumption of personal property on the following 29 activities: 30 (1) the sale, lease, rental, storage, consumption, or distribution in this 31 state of or the provision of services relating to an orbital space facility, space
01 propulsion system, or space vehicle, satellite, or station of any kind possessing space 02 flight capacity, including the components of them; 03 (2) the sale, lease, rental, storage, consumption, or use of tangible 04 personal property placed on or used aboard an orbital space facility, space propulsion 05 system, or space vehicle, satellite, or station of any kind, regardless of whether the 06 tangible personal property is returned to this state for subsequent use, storage, or 07 consumption; an exemption under this paragraph is not affected by the failure of a 08 launch to occur, or the destruction of a launch vehicle or a component of a launch 09 vehicle. 10 * Sec. 14. AS 29.45.660(a) is amended to read: 11 (a) If the borough levies [AND COLLECTS] only a general sales tax and use 12 tax, the assembly shall provide a notice substantially in the form set out in 13 AS 29.45.020. In providing notice under this subsection, the assembly shall substitute 14 for the millage equivalency its estimate of the equivalent sales tax rate for each of the 15 categories of financial assistance set out in AS 29.45.020. Notice shall be provided 16 (1) by publishing in a newspaper of general circulation in the borough 17 a copy of the notice once each week for a period of three successive weeks, with 18 publication to occur not later than 45 days after the final adoption of the borough's 19 budget; or 20 (2) if there is no newspaper of general circulation in the borough, by 21 posting a copy of the notice for at least 20 days in at least two public places in the 22 borough, with posting to occur not later than 45 days after the final adoption of the 23 borough's budget. 24 * Sec. 15. AS 29.45.660(a) is amended to read: 25 (a) If the borough levies and collects only a [GENERAL] sales tax and use 26 tax, the assembly shall provide a notice substantially in the form set out in 27 AS 29.45.020. In providing notice under this subsection, the assembly shall substitute 28 for the millage equivalency its estimate of the equivalent sales tax rate for each of the 29 categories of financial assistance set out in AS 29.45.020. Notice shall be provided 30 (1) by publishing in a newspaper of general circulation in the borough 31 a copy of the notice once each week for a period of three successive weeks, with
01 publication to occur not later than 45 days after the final adoption of the borough's 02 budget; or 03 (2) if there is no newspaper of general circulation in the borough, by 04 posting a copy of the notice for at least 20 days in at least two public places in the 05 borough, with posting to occur not later than 45 days after the final adoption of the 06 borough's budget. 07 * Sec. 16. AS 29.45.700 is repealed and reenacted to read: 08 Sec. 29.45.700. Power of levy. A city may levy a sales and use tax in the 09 manner provided for boroughs under AS 29.45.650. 10 * Sec. 17. AS 29.45.700 is repealed and reenacted to read: 11 Sec. 29.45.700. Power of levy. (a) A city in a borough that levies and collects 12 areawide sales and use taxes may levy sales and use taxes on all sources taxed by the 13 borough in the manner provided for boroughs. Except as provided in (d) of this 14 section, the assembly may by ordinance authorize a city to levy and collect sales and 15 use taxes on other sources. 16 (b) A city in a borough that does not levy and collect sales and use taxes for 17 areawide borough functions may levy and collect sales and use taxes in the manner 18 provided for boroughs. 19 (c) A city outside a borough may levy and collect sales and use taxes in the 20 manner provided for boroughs. 21 (d) A city that levies and collects sales and use taxes under (a) of this section 22 may not levy and collect a sales tax on a purchase made with (1) food coupons, food 23 stamps, or other types of allotments issued under 7 U.S.C. 2011 - 2036 (Food Stamp 24 Program); or (2) food instruments, food vouchers, or other type of certificate issued 25 under 42 U.S.C. 1786 (Special Supplemental Food Program for Women, Infants, and 26 Children). For purposes of this subsection, the value of a food stamp allotment paid in 27 the form of a wage subsidy as authorized under AS 47.25.975(b) is not considered to 28 be an allotment issued under 7 U.S.C. 2011 - 2036 (Food Stamp Program). This 29 subsection applies to home rule and general law municipalities. 30 * Sec. 18. AS 29.45 is amended by adding a new section to read: 31 Article 5B. Specific Taxes on Tangible Personal Property and Services.
01 Sec. 29.45.720. Specific taxes on tangible personal property and services. 02 Except as specifically prohibited or limited, a municipality may levy and collect 03 specific sales or excise taxes on single categories of tangible or intangible property or 04 services, such as bed taxes and fish taxes. 05 * Sec. 19. AS 29.45.810(a) is amended to read: 06 (a) A party to a contract approved by the legislature as a result of submission 07 of a proposed contract developed under AS 43.82 or as a result of acts by the 08 legislature in implementing the purposes of AS 43.82, and the property, gas, products, 09 and activities associated with the approved qualified project that is subject to the 10 contract, are exempt, as specified in the contract, from all taxes identified in the 11 contract that would be levied [AND COLLECTED] by a municipality under state law 12 as a consequence of the participation by the party in the approved qualified project. 13 * Sec. 20. AS 29.45.810(a) is amended to read: 14 (a) A party to a contract approved by the legislature as a result of submission 15 of a proposed contract developed under AS 43.82 or as a result of acts by the 16 legislature in implementing the purposes of AS 43.82, and the property, gas, products, 17 and activities associated with the approved qualified project that is subject to the 18 contract, are exempt, as specified in the contract, from all taxes identified in the 19 contract that would be levied and collected by a municipality under state law as a 20 consequence of the participation by the party in the approved qualified project. 21 * Sec. 21. AS 43.40.010(a) is amended to read: 22 (a) There is levied a tax of 20 [EIGHT] cents a gallon on all motor fuel sold or 23 otherwise transferred within the state, except that 24 (1) the tax on aviation gasoline is four and seven-tenths cents a gallon; 25 (2) the tax on motor fuel used in and on watercraft of all descriptions is 26 five cents a gallon; and 27 (3) the tax on all aviation fuel other than gasoline is three and two- 28 tenths cents a gallon [; AND 29 (4) THE TAX RATE ON MOTOR FUEL THAT IS BLENDED 30 WITH ALCOHOL IS THE SAME TAX RATE A GALLON AS OTHER MOTOR 31 FUEL; HOWEVER,
01 (A) IN AN AREA AND DURING THE MONTHS IN WHICH 02 FUEL CONTAINING ALCOHOL IS REQUIRED TO BE SOLD, 03 TRANSFERRED, OR USED IN AN EFFORT TO ATTAIN AIR QUALITY 04 STANDARDS FOR CARBON MONOXIDE AS REQUIRED BY FEDERAL 05 OR STATE LAW OR REGULATION, THE TAX RATE ON MOTOR FUEL 06 THAT IS BLENDED WITH ALCOHOL IS SIX CENTS A GALLON LESS 07 THAN THE TAX ON OTHER MOTOR FUEL NOT DESCRIBED IN (1) - 08 (3) OF THIS SUBSECTION; 09 (B) NOTWITHSTANDING (A) OF THIS PARAGRAPH, 10 THROUGH JUNE 30, 2004, THE TAX ON MOTOR FUEL SOLD OR 11 OTHERWISE TRANSFERRED WITHIN THE STATE IS EIGHT CENTS A 12 GALLON LESS THAN THE TAX ON OTHER MOTOR FUEL NOT 13 DESCRIBED IN (1) - (3) OF THIS SUBSECTION IF THE MOTOR FUEL 14 (i) IS AT LEAST 10 PERCENT ALCOHOL BY 15 VOLUME, HAS BEEN PRODUCED FROM THE PROCESSING OF 16 LIGNOCELLULOSE DERIVED FROM WOOD, AND WAS 17 PRODUCED IN A FACILITY THAT PROCESSES 18 LIGNOCELLULOSE FROM WOOD, BUT THIS REDUCTION IN 19 THE RATE OF TAX APPLIES TO MOTOR FUEL SOLD OR 20 TRANSFERRED THAT CONTAINS ALCOHOL THAT WAS 21 PRODUCED ONLY DURING THE FIRST FIVE YEARS OF THE 22 FACILITY'S PROCESSING OF LIGNOCELLULOSE FROM 23 WOOD; OR 24 (ii) IS AT LEAST 10 PERCENT ALCOHOL BY 25 VOLUME, HAS BEEN PRODUCED FROM THE PROCESSING OF 26 WASTE SEAFOOD, AND WAS PRODUCED IN A FACILITY 27 THAT PROCESSES ALCOHOL FROM WASTE SEAFOOD, BUT 28 THIS REDUCTION IN THE RATE OF TAX APPLIES TO MOTOR 29 FUEL SOLD OR TRANSFERRED THAT CONTAINS ALCOHOL 30 THAT WAS PRODUCED ONLY DURING THE FIRST FIVE 31 YEARS OF THE FACILITY'S PROCESSING OF ALCOHOL FROM
01 WASTE SEAFOOD]. 02 * Sec. 22. AS 43.40.010(a) is amended to read: 03 (a) There is levied a tax of eight [20] cents a gallon on all motor fuel sold or 04 otherwise transferred within the state, except that 05 (1) the tax on aviation gasoline is four and seven-tenths cents a gallon; 06 (2) the tax on motor fuel used in and on watercraft of all descriptions is 07 five cents a gallon; [AND] 08 (3) the tax on all aviation fuel other than gasoline is three and two- 09 tenths cents a gallon; and 10 (4) the tax rate on motor fuel that is blended with alcohol is the 11 same tax rate a gallon as other motor fuel; however, in an area and during the 12 months in which fuel containing alcohol is required to be sold, transferred, or 13 used in an effort to attain air quality standards for carbon monoxide as required 14 by federal or state law or regulation, the tax rate on motor fuel that is blended 15 with alcohol is six cents a gallon less than the tax on other motor fuel not 16 described in (1) - (3) of this subsection. 17 * Sec. 23. AS 43.40.010(b) is amended to read: 18 (b) There is levied a tax of 20 [EIGHT] cents a gallon on all motor fuel 19 consumed by a user, except that 20 (1) the tax on aviation gasoline consumed is four and seven-tenths 21 cents a gallon; 22 (2) the tax on motor fuel used in and on watercraft of all descriptions is 23 five cents a gallon; and 24 (3) the tax on all aviation fuel other than gasoline is three and two- 25 tenths cents a gallon [; AND 26 (4) THE TAX RATE ON MOTOR FUEL THAT IS BLENDED 27 WITH ALCOHOL IS THE SAME TAX RATE A GALLON AS OTHER MOTOR 28 FUEL; HOWEVER, 29 (A) IN AN AREA AND DURING THE MONTHS IN WHICH 30 FUEL CONTAINING ALCOHOL IS REQUIRED TO BE SOLD, 31 TRANSFERRED, OR USED IN AN EFFORT TO ATTAIN AIR QUALITY
01 STANDARDS FOR CARBON MONOXIDE AS REQUIRED BY FEDERAL 02 OR STATE LAW OR REGULATION, THE TAX RATE ON MOTOR FUEL 03 THAT IS BLENDED WITH ALCOHOL IS SIX CENTS A GALLON LESS 04 THAN THE TAX ON OTHER MOTOR FUEL NOT DESCRIBED IN (1) - 05 (3) OF THIS SUBSECTION; 06 (B) NOTWITHSTANDING (A) OF THIS PARAGRAPH, 07 THROUGH JUNE 30, 2004, THE TAX ON MOTOR FUEL CONSUMED 08 BY A USER WITHIN THE STATE IS EIGHT CENTS A GALLON LESS 09 THAN THE TAX ON OTHER MOTOR FUEL NOT DESCRIBED IN (1) - 10 (3) OF THIS SUBSECTION IF THE MOTOR FUEL 11 (i) IS AT LEAST 10 PERCENT ALCOHOL BY 12 VOLUME, HAS BEEN PRODUCED FROM THE PROCESSING OF 13 LIGNOCELLULOSE DERIVED FROM WOOD, AND WAS 14 PRODUCED IN A FACILITY THAT PROCESSES 15 LIGNOCELLULOSE FROM WOOD, BUT THIS REDUCTION IN 16 THE RATE OF TAX APPLIES TO MOTOR FUEL CONSUMED BY 17 A USER THAT CONTAINS ALCOHOL THAT WAS PRODUCED 18 ONLY DURING THE FIRST FIVE YEARS OF THE FACILITY'S 19 PROCESSING OF LIGNOCELLULOSE FROM WOOD; OR 20 (ii) IS AT LEAST 10 PERCENT ALCOHOL BY 21 VOLUME, HAS BEEN PRODUCED FROM THE PROCESSING OF 22 WASTE SEAFOOD, AND WAS PRODUCED IN A FACILITY 23 THAT PROCESSES ALCOHOL FROM WASTE SEAFOOD, BUT 24 THIS REDUCTION IN THE RATE OF TAX APPLIES TO MOTOR 25 FUEL CONSUMED BY A USER THAT CONTAINS ALCOHOL 26 THAT WAS PRODUCED ONLY DURING THE FIRST FIVE 27 YEARS OF THE FACILITY'S PROCESSING OF ALCOHOL FROM 28 WASTE SEAFOOD]. 29 * Sec. 24. AS 43.40.010(b) is amended to read: 30 (b) There is levied a tax of eight [20] cents a gallon on all motor fuel 31 consumed by a user except that
01 (1) the tax on aviation gasoline consumed is four and seven-tenths 02 cents a gallon; 03 (2) the tax on motor fuel used in and on watercraft of all descriptions is 04 five cents a gallon; [AND] 05 (3) the tax on all aviation fuel other than gasoline is three and two- 06 tenths cents a gallon ; and 07 (4) the tax rate on motor fuel that is blended with alcohol is the 08 same tax rate a gallon as other motor fuel; however, in an area and during the 09 months in which fuel containing alcohol is required to be sold, transferred, or 10 used in an effort to attain air quality standards for carbon monoxide as required 11 by federal or state law or regulation, the tax rate on motor fuel that is blended 12 with alcohol is six cents a gallon less than the tax on other motor fuel not 13 described in (1) - (3) of this subsection. 14 * Sec. 25. AS 43.40.010(g) is amended to read: 15 (g) The proceeds of the revenue from the tax on all motor fuels, except as 16 provided in (e), (f), (j), and (m) [AND (j)] of this section, shall be deposited in a 17 special highway fuel tax account in the state general fund. The legislature may 18 appropriate funds from it for expenditure by the Department of Transportation and 19 Public Facilities directly or as matched with available federal-aid highway money for 20 maintenance of highways, construction of highway projects and ferries included in the 21 program provided for in AS 19.10.150, including approaches, appurtenances and 22 related facilities and acquisition of rights-of-way or easements, and other highway 23 costs including surveys, administration, and related matters. All departments of the 24 state government authorized to spend funds collected from taxes imposed by this 25 chapter shall perform, when feasible, all construction or reconstruction projects by 26 contract after the projects have been advertised for competitive bids, except that, when 27 feasible, arrangements shall be made with political subdivisions to carry out the 28 construction or reconstruction projects. If it is not feasible for the work to be 29 performed by state engineering forces, the commissioner of transportation and public 30 facilities may contract on a professional basis with private engineering firms for road 31 design, bridge design, and services in connection with surveys. If more than one
01 private engineering firm is available for the work the contracts shall be entered into on 02 a negotiated basis. 03 * Sec. 26. AS 43.40.010(g) is amended to read: 04 (g) The proceeds of the revenue from the tax on all motor fuels, except as 05 provided in (e), (f), and (j) [(j) AND (m)] of this section, shall be deposited in a 06 special highway fuel tax account in the state general fund. The legislature may 07 appropriate funds from it for expenditure by the Department of Transportation and 08 Public Facilities directly or as matched with available federal-aid highway money for 09 maintenance of highways, construction of highway projects and ferries included in the 10 program provided for in AS 19.10.150, including approaches, appurtenances and 11 related facilities and acquisition of rights-of-way or easements, and other highway 12 costs including surveys, administration, and related matters. All departments of the 13 state government authorized to spend funds collected from taxes imposed by this 14 chapter shall perform, when feasible, all construction or reconstruction projects by 15 contract after the projects have been advertised for competitive bids, except that, when 16 feasible, arrangements shall be made with political subdivisions to carry out the 17 construction or reconstruction projects. If it is not feasible for the work to be 18 performed by state engineering forces, the commissioner of transportation and public 19 facilities may contract on a professional basis with private engineering firms for road 20 design, bridge design, and services in connection with surveys. If more than one 21 private engineering firm is available for the work the contracts shall be entered into on 22 a negotiated basis. 23 * Sec. 27. AS 43.40.010 is amended by adding a new subsection to read: 24 (m) An amount equal to the revenue obtained from six cents of the tax 25 collected under (a) and (b) of this section, excluding the amounts collected under 26 (a)(1) - (4) and (b)(1) - (4) of this section, shall be separately accounted for in the 27 special highway fuel tax account under AS 43.40.010(g). The annual estimated 28 balance of the amount separately accounted for may be appropriated by the legislature 29 to the Department of Community and Economic Development for distribution to 30 municipalities according to AS 29.60.110. 31 * Sec. 28. AS 43.40.030(a) is amended to read:
01 (a) Except as specified in AS 43.40.010(j), a person who uses motor fuel to 02 operate an internal combustion engine is entitled to a refund of 18 [SIX] cents a gallon 03 if 04 (1) the tax on the motor fuel has been paid; 05 (2) the motor fuel is not aviation fuel, or motor fuel used in or on 06 watercraft; and 07 (3) the internal combustion engine is not used in or in conjunction with 08 a motor vehicle licensed to be operated on public ways. 09 * Sec. 29. AS 43.40.030(a) is amended to read: 10 (a) Except as specified in AS 43.40.010(j), a person who uses motor fuel to 11 operate an internal combustion engine is entitled to a refund of six [18] cents a gallon 12 if 13 (1) the tax on the motor fuel has been paid; 14 (2) the motor fuel is not aviation fuel, or motor fuel used in or on 15 watercraft; and 16 (3) the internal combustion engine is not used in or in conjunction with 17 a motor vehicle licensed to be operated on public ways. 18 * Sec. 30. AS 43 is amended by adding a new chapter to read: 19 Chapter 44. Sales and Use Tax. 20 Article 1. Levy and Collection of the Tax. 21 Sec. 43.44.010. Levy of sales and use tax. (a) There is levied a sales tax on 22 sales and rents of tangible personal property and on sales of services. 23 (b) For the privilege of using property in this state, there is levied a use tax on 24 the person using property that was 25 (1) manufactured by the person using the property in this state; or 26 (2) acquired outside this state as the result of a transaction that would 27 have been subject to the sales tax had it occurred in this state. 28 (c) For the privilege of using services in this state, there is levied a use tax on 29 the person using services. 30 (d) The rate of levy of the sales tax levied under (a) of this section and of the 31 use taxes levied under (b) and (c) of this section is three percent of the sales price or
01 purchase price of the tangible personal property or service. 02 Sec. 43.44.015. Relationship to municipal levies. (a) The rate of levy under 03 this subsection is decreased in a borough or city that levies taxes under AS 29.45.650 04 or 29.45.700 so that the total sales and use tax levied in that borough or city, including 05 the sales and use tax under this chapter, does not exceed eight percent. This decrease 06 only applies in conjunction with borough or city sales and use tax rates approved or in 07 effect on April 1, 2003. 08 (b) A municipality may not increase the rate of a municipal sales and use tax 09 above the rate in effect on April 1, 2003, if that increase would cause the total 10 combined state and municipal sales and use taxes in a municipality to exceed eight 11 percent. 12 (c) Except as provided in (d) of this section, the total combined state and 13 municipal sales and use taxes in a municipality may not exceed eight percent. In a 14 municipality 15 (1) subject to both a city sales and use tax and a borough sales and use 16 tax, if the total combined municipal sales and use tax rates exceed eight percent, the 17 borough shall be entitled to levy the borough sales and use tax at its full rate, not to 18 exceed eight percent, the city shall reduce the rate of its sales and use tax accordingly, 19 and the rate of the state sales and use tax within that municipality shall be zero; 20 (2) subject to both a city sales and use tax and a borough sales and use 21 tax, where the total combined municipal sales and use tax rates do not exceed eight 22 percent, the borough shall be entitled to levy the borough sales and use tax at its full 23 rate, the city shall be entitled to levy the city sales and use tax at its full rate, and the 24 state shall reduce the rate of the state sales and use tax within that municipality 25 accordingly; 26 (3) subject only to a borough sales and use tax or a city sales and use 27 tax, but not both, if the total combined municipal and state sales and use tax rates 28 exceed eight percent, the municipality shall be entitled to levy the municipal sales and 29 use tax at its full rate, not to exceed eight percent, and the state shall reduce the rate of 30 the state sales and use tax within that municipality accordingly. 31 (d) A municipality may levy a general sales and use tax or increase the rate of
01 an existing sales and use tax so that the combined state and municipal sales tax rate 02 exceeds eight percent if it is approved by the voters in a referendum election under 03 AS 29.45.670. The proposed total combined rate as well as the proposed municipal 04 rate must be clearly stated to the voters in the referendum question. In a municipality 05 that imposes a general sales and use tax at a rate that, combined with a three percent 06 state sales and use tax rate, exceeds eight percent, the rate of the state sales and use tax 07 imposed under this chapter shall be three percent, notwithstanding any other provision 08 of this chapter or AS 29. 09 Sec. 43.44.020. Collection of tax. (a) The tax described in AS 43.44.010(a) 10 is imposed on the purchaser and must be collected by the seller and paid to the 11 department by the seller as provided in AS 43.44.340. The seller holds all taxes 12 collected in trust for the state. The tax must be applied to the sales price. 13 (b) The purchaser of property subject to the tax described in AS 43.44.010(b) 14 is responsible for payment of the tax as provided in AS 43.44.340. 15 (c) The purchaser of services subject to the tax described in AS 43.44.010(c) 16 is responsible for payment of the tax as provided in AS 43.44.340. 17 Sec. 43.44.030. Presumption of taxability; sales price and purchase price. 18 (a) In order to prevent evasion of the sales tax or use tax and to aid in its 19 administration, it is presumed that 20 (1) all sales by a person engaging in business are subject to the sales 21 tax or use tax; and 22 (2) all property purchased or sold by any person for delivery into this 23 state is purchased or sold for a taxable use in this state. 24 (b) In a sale in which the amount of money paid does not represent the 25 purchase price of the property or service purchased, the use tax must be imposed on 26 the purchase price of the property or service purchased. 27 (c) For purposes of this section, the sales price or purchase price of property 28 must be determined as of the time of acquisition, introduction into this state, or 29 conversion to use, whichever is latest. 30 Sec. 43.44.040. Separate statement of tax; no advertising to absorb or 31 refund tax. (a) If any person collects a tax in excess of the tax imposed by
01 AS 43.44.010(a), both the tax and the excess tax must be remitted to the department. 02 (b) The sales tax must be stated separately for all sales, except for sales from 03 coin-operated or currency-operated machines. 04 (c) A person may not advertise, hold out, or state to the public or to any 05 customer that the tax imposed by AS 44.43.010(a) will be absorbed or refunded. 06 Sec. 43.44.050. Liability of user for payment of use tax. (a) A person in 07 this state who uses property is liable to the state for payment of the use tax if the tax is 08 payable on the purchase price of the property but has not been paid. 09 (b) The liability imposed by this section is discharged if the purchaser has paid 10 the sales or use tax to the seller for payment to the department. 11 Sec. 43.44.060. Nexus. To the fullest extent permitted under the Constitution 12 of the United States, a person who has nexus with the State of Alaska and whose sales 13 are not subject to the sales tax shall collect the use tax from the purchaser and pay the 14 tax collected to the department. 15 Article 2. Exemptions. 16 Sec. 43.44.090. Exemption: government agencies. (a) Sales by, sales to, or 17 uses by the United States are exempt from the sales tax and use tax. 18 (b) Sales to or uses by the state or an instrumentality of the state, as that term 19 is defined in AS 39.52.960, an Indian tribe included on the list published under 25 20 U.S.C. 479a-1, or a foreign government are exempt from the sales and use tax. 21 Sec. 43.44.095. Exemption for corporations exempt from taxation under 22 26 U.S.C. 501(c)(3). With the exception of sales governed by AS 05.15, all sales by, 23 sales to, or uses by a corporation that is exempt from taxation under 26 U.S.C. 24 501(c)(3) (Internal Revenue Code) are exempt from the sales tax and use tax. 25 Sec. 43.44.100. Exemption for food stamps and special supplemental 26 nutrition program for women, infants, and children. The sale of an item lawfully 27 purchased with food stamp program benefits issued under 7 U.S.C. 2011 - 2025 (Food 28 Stamp Act) or purchased with food instruments, food vouchers, or other type of 29 certificate issued under 42 U.S.C. 1786 (special supplemental nutrition program for 30 women, infants, and children) is exempt from the sales tax and use tax. 31 Sec. 43.44.110. Exemption for intangibles. The following are exempt from
01 the sales tax and use tax, even if they are construed to be tangible personal property or 02 a service: 03 (1) wages, salaries, commissions, and any other form of remuneration 04 for personal services if paid by an employer to an employee; the terms used in this 05 section have the meanings given in 26 U.S.C. 3121 (Internal Revenue Code); 06 (2) interest on money loaned or deposited; 07 (3) dividends or interest from stocks, bonds, or securities; and 08 (4) proceeds from the sale of stocks, bonds, or securities. 09 Sec. 43.44.120. Financial services. Financial services related to the sale or 10 purchase of financial instruments, including stocks, bonds, and securities, are exempt 11 from the sales and use tax. 12 Sec. 43.44.140. Exemption for isolated or occasional sale or lease of 13 property or services. The isolated or occasional sale or lease of property or the 14 performance of a service by a person who is not regularly engaged in or who does not 15 intend to engage in the business of selling or leasing the same or a similar property or 16 service is exempt from the sales tax and use tax. Occasional sales include sales that 17 are occasional but not continuous and that are made for the purpose of fundraising by 18 nonprofit organizations, including but not limited to youth clubs, service clubs, and 19 fraternal organizations. 20 Sec. 43.44.150. Exemption for personal effects. The use by an individual of 21 personal or household effects brought into the state for the establishment by the 22 individual of an initial residence in this state and the use of property brought into the 23 state by a nonresident for the nonresident's own nonbusiness use while temporarily 24 within this state is exempt from the use tax. 25 Sec. 43.44.155. Exemption for motor vehicles, watercraft, aircraft, and 26 mobile homes. The sales price or purchase price of a motor vehicle, watercraft, 27 aircraft, or mobile home in excess of $5,000 is exempt from the sales tax and use tax. 28 For purposes of this section, "motor vehicle" has the meaning given in AS 28.40.100. 29 Sec. 43.44.160. Exemption for the sale of property for resale. The sale of 30 property is exempt from the sales tax and use tax if the purchaser resells the property 31 either by itself or in combination with other property in the ordinary course of
01 business and the property will be subject to the sales tax imposed by AS 43.44.010(a). 02 Sec. 43.44.165. Exemption for the conveyance and improvement of real 03 property. The sale, lease, or rental of real property, and improvements depreciated 04 under 26 U.S.C. (Internal Revenue Code) to real property, are exempt from the sales 05 and use tax. 06 Sec. 43.44.170. Exemption for the sale of service for resale. The sale of a 07 service for resale is exempt from the sales tax and use tax if 08 (1) the purchaser resells the service and separately states the sales price 09 of the service purchased in the charge for the service in the subsequent sale; and 10 (2) the subsequent sale is in the ordinary course of business and subject 11 to the sales tax imposed by AS 43.44.010(a). 12 Sec. 43.44.180. Exemption for a sale to a miner or manufacturer. (a) The 13 sale of property to a purchaser engaged in the business of mining or manufacturing is 14 exempt from the sales tax and use tax if the purchaser incorporates the property as an 15 ingredient or component part of the product in the business of mining or 16 manufacturing. 17 (b) For the purposes of this section, electrical energy or electricity used or 18 consumed by electrolytic reduction used in the reduction or refinement of ores is 19 considered a component part of the product. 20 Sec. 43.44.190. Exemption for property held for lease. The sale, use, lease, 21 or rental of property held for lease is exempt from the sales and use tax if the person 22 holding the property for lease, or purchasing, leasing, or renting the property for the 23 purpose of holding the property for lease 24 (1) is engaged in a business that derives more than 50 percent of its 25 receipts from leasing or selling property of the type held; 26 (2) does not use the property in any manner other than holding it for 27 lease or sale or leasing or selling it either by itself or in combination with other 28 tangible personal property in the ordinary course of business; 29 (3) does not use the property in a manner incidental to the performance 30 of a service; and 31 (4) the subsequent lease or rental is subject to the tax imposed by
01 AS 43.44.010(a). 02 Sec. 43.44.200. Exemption for transactions subject to other taxes. (a) 03 Motor fuel transactions subject to tax under AS 43.40 are exempt from the sales tax 04 and use tax. 05 (b) Transactions subject to tax under AS 43.52 are exempt from the sales tax 06 and use tax. 07 (c) Insurance premiums subject to tax under AS 21.09.210 are exempt from 08 the sales tax and use tax. 09 Sec. 43.44.210. Exemption for certain intrastate transportation and 10 services in interstate commerce. (a) The transport of persons or property from one 11 point within this state to another point within this state is exempt from the sales tax 12 and use tax if the persons or property, including any reasonably necessary services, are 13 being transported in interstate or foreign commerce under a single contract. 14 (b) Handling, storage, drayage, or packing of property or another accessorial 15 service on property is exempt from the sales tax and use tax if 16 (1) the property has been or will be moved in interstate or foreign 17 commerce; 18 (2) the services are performed by a local agent for a carrier or by a 19 carrier; and 20 (3) the services are performed under a single contract in relation to 21 interstate transportation services. 22 Sec. 43.44.220. Exemption for health care. The following are exempt from 23 the sales tax and use tax: 24 (1) health care services provided by a person licensed or certified to 25 provide those services under AS 08 or a "health care facility" as that term is defined in 26 AS 08.68.395(g)(2); 27 (2) drugs, durable medical equipment, mobility enhancing equipment, 28 and prosthetic devices obtained on prescription from a person licensed to prescribe 29 those goods under AS 08 or from a health care facility, as that term is defined in 30 AS 08.68.395(g)(2). 31 Sec. 43.44.230. Exemption for child care services. Child care services are
01 exempt from the sales tax and use tax. 02 Article 3. Collection and Payment Provisions. 03 Sec. 43.44.240. Tax credit for sales or use tax paid to another state. (a) A 04 buyer liable for use tax on tangible personal property or services is entitled to a full 05 credit for the amount of sales or use tax paid on the tangible personal property or 06 services to another state. 07 (b) The credit shall be applied first against the amount of use tax levied under 08 this chapter. Any unused portion of the credit shall then be applied against the amount 09 of use tax levied by a municipality under AS 29.45.650 or 29.45.700. 10 Sec. 43.44.250. Exempt sales. All exempt sales under AS 43.44.090 - 11 43.44.230 must be documented in an invoice. The department shall prescribe by 12 regulation the requirements for an invoice. 13 Sec. 43.44.252. Exemption certificate: form. (a) The department shall 14 provide for a uniform exemption certificate. A purchaser shall use the certificate 15 when purchasing goods or services for resale or for other exempt transactions. 16 (b) At a minimum, the certificate must provide 17 (1) the number of the seller's permit issued to the purchaser as 18 provided in AS 43.44.260 or the number of the direct pay permit issued to the 19 purchaser as provided in AS 43.44.255, as applicable; 20 (2) the general character of property or service sold by the purchaser in 21 the regular course of business; 22 (3) the property or service purchased; 23 (4) the name and address of the purchaser; and 24 (5) a signature line for the purchaser. 25 Sec. 43.44.254. Exemption certificate: requirements. (a) An exemption 26 certificate executed by a purchaser or lessee must be in the possession of the seller or 27 lessor at the time that an exempt transaction occurs. 28 (b) An exemption certificate must contain the information and be in the form 29 prescribed by the department. 30 (c) If the seller or lessor accepts an exemption certificate and believes in good 31 faith that the purchaser or lessee will employ the property or service transferred in an
01 exempt manner, the properly executed exemption certificate is considered conclusive 02 evidence, as to the seller or lessor, that the sale is exempt. 03 Sec. 43.44.255. Direct pay permit. A direct pay permit authorizes its holder 04 to purchase tangible personal property and services without paying tax to the seller 05 and authorizes the seller to not collect any tax on a sale to the permit holder. A person 06 who purchases tangible personal property or services under a direct pay permit issued 07 under this section is liable for any sales and use tax due. The tax due must be paid by 08 the permit holder on a quarterly basis on a schedule established by the department. To 09 obtain a direct pay permit, a person must apply to the department and satisfy criteria 10 for direct pay permit holders established by the department by regulation. 11 Sec. 43.44.260. Seller's permit. (a) A person wishing to engage in business 12 in this state shall obtain a seller's permit before engaging in business in this state. 13 (b) Upon an applicant's compliance with this chapter, the department shall 14 issue to the applicant a numbered seller's permit. A permit is valid until revoked or 15 suspended but is not assignable. A permit is valid only for the person in whose name 16 it is issued. A copy of the permit must be conspicuously displayed at all times at the 17 place for which it is issued. 18 Sec. 43.44.270. Permit application: requirements; place of business; form. 19 (a) A person wishing to engage in business in this state shall file with the department 20 an application for a seller's permit. If the person has more than one location in which 21 the person maintains an office or other place of business, an application may include 22 multiple locations. A vending machine operator who has more than one vending 23 machine location is considered to have only one place of business for purposes of this 24 section. An applicant who does not maintain an office or other place of business and 25 who moves from place to place is considered to have only one place of business and 26 shall attach the permit to the applicant's cart, stand, truck, or other merchandising 27 device. 28 (b) Each application for a permit must be on a form or in a format prescribed 29 by the department and must set out the name under which the applicant intends to 30 transact business, the location of the applicant's place or places of business, and other 31 information that the department may require. The application must be filed by the
01 owner if the owner is a natural person, by a member or partner if the owner is an 02 association or partnership, or by a person authorized to sign the application if the 03 owner is a corporation. 04 Sec. 43.44.280. Revocation or suspension of permit: hearing; notice; 05 appeal. (a) Subject to the provisions of (b) of this section, the department may, for 06 reasonable cause, revoke or suspend a permit held by a person who fails to comply 07 with the provisions of this chapter. 08 (b) The department shall provide written notice and an opportunity for a 09 hearing on a proposed revocation or suspension. The hearing must be conducted 10 informally and is not subject to AS 44.62 (Administrative Procedure Act). 11 (c) If a permit is revoked, the department may not issue a new permit except 12 upon application accompanied by reasonable evidence of the intention of the applicant 13 to comply with the provisions of this chapter. The department may, as a condition for 14 the issuance of a new permit to the applicant, require security in addition to that 15 authorized by AS 43.44.370 in an amount reasonably necessary to ensure compliance 16 with this chapter. 17 (d) A person aggrieved by the department's final decision to revoke a permit 18 as provided in (a) of this section may appeal the decision to the superior court. 19 Sec. 43.44.290. Improper use of subject of purchase obtained with 20 exemption certificate; penalty. (a) If a purchaser who uses an exemption certificate 21 uses the subject of the purchase for a purpose other than one allowed as exempt under 22 this chapter, the use is considered a taxable sale as of the time of first use by the 23 purchaser, and the sales price is the price that the purchaser paid. If the sole 24 nonexempt use is rental while holding for sale, the purchaser shall include in the sales 25 price the amount of the rental charged. Upon subsequent sale of the property, the 26 seller shall include the entire amount of the sales price, without deduction of amounts 27 previously received as rentals. 28 (b) A person who uses an exemption certificate for property that will be used 29 for purposes other than the purpose claimed is subject to a penalty, payable to the 30 department, of $100 or 100 percent of the tax due, whichever is greater, for each 31 transaction in which an improper use of a certificate has occurred.
01 Sec. 43.44.300. Commingling exemption certificate goods. If a purchaser 02 uses an exemption certificate with respect to the purchase of fungible goods and 03 commingles these goods with fungible goods that were not purchased with an 04 exemption certificate but that are so similar that the identity of the goods in the 05 commingled mass cannot be determined, sales from the mass of commingled goods 06 are considered to be sales of the goods purchased with the certificate until the quantity 07 of commingled goods sold equals the quantity of goods originally purchased under the 08 certificate. 09 Sec. 43.44.310. Liability for payment of tax; security for retailer without 10 place of business; penalty. (a) Liability for the payment of the sales tax and use tax 11 is not extinguished until the taxes have been paid to the department. 12 (b) A retailer who does not maintain an office or other place of business in this 13 state is liable for the sales tax or use tax on all property sold or leased and services 14 provided in this state in accordance with this chapter and may be required to furnish 15 adequate security as provided in AS 43.44.370 to ensure collection and payment of the 16 taxes. When authorized and except as otherwise provided in this chapter, the retailer 17 is liable for the taxes on all property sold and services provided in this state in the 18 same manner as a retailer who maintains an office or other place of business in this 19 state. The seller's permit provided for in AS 43.44.260 may be canceled at any time if 20 the department considers the security inadequate or believes that the taxes can be 21 collected more effectively in another manner. 22 (c) An agent, canvasser, or employee of a retailer doing business in this state 23 who does not possess a seller's permit issued by the department may not sell, solicit 24 orders for, or deliver property or services in Alaska. If an agent, canvasser, or 25 employee violates the provisions of this chapter, the person is subject to a fine of not 26 more than $100, or 100 percent of the tax due, whichever is greater, for each separate 27 transaction or event. 28 Sec. 43.44.320. Interstate and intrastate carriers as retailers. A person 29 engaged in the business of interstate or intrastate transportation of property or 30 passengers shall register as a retailer with the department and pay the taxes imposed 31 by AS 43.44.010.
01 Sec. 43.44.330. Method of accounting. A person who has a seller's permit 02 shall report and pay the sales and use tax using the same method of accounting that the 03 person uses for federal tax purposes. 04 Sec. 43.44.340. Returns: payment; authority of department. (a) A person 05 who has a tax liability under AS 43.44.010 shall file a return on a form or in a format 06 prescribed by the department and pay the tax due monthly. The return shall be filed 07 on or before the 20th day following the end of the month for which the tax is due. 08 Each person engaged in business in this state or using property in this state that is 09 subject to taxation under AS 43.44.010 shall file a return. 10 (b) For the purposes of the sales tax or use tax, a return must be filed by 11 (1) a retailer required to collect the tax; and 12 (2) a person who 13 (A) purchases an item the storage, use, or other consumption of 14 which is subject to the sales tax or use tax; and 15 (B) has not paid the tax to a retailer required to pay the tax. 16 (c) Each return must be authenticated by the person filing the return or by the 17 person's agent authorized in writing to file the return. 18 Sec. 43.44.345. Methods. (a) The department shall adopt regulations 19 providing for payment of the sales and use tax based on a rounding method. 20 (b) The department may use sampling principles or methods in lieu of 100 21 percent examination of records in conducting a sales tax or use tax audit. 22 Sec. 43.44.350. Credit for taxes paid on worthless accounts; taxes paid if 23 account collected. (a) Sales taxes paid on an accrual basis by a person filing a return 24 under AS 43.44.340 on sales found to be worthless and actually deducted by the 25 person as a bad debt for federal income tax purposes may be credited on a subsequent 26 payment of the tax. 27 (b) If the accounts are subsequently collected, the sales tax must be paid on 28 the amount collected. 29 Sec. 43.44.360. Timely filing allowance. (a) A person filing a return under 30 AS 43.44.340 may claim an allowance for each permitted location in the amount of 31 two percent of the tax determined to be payable to the state or $75 a month, whichever
01 is less, if the return is timely filed and the tax is timely paid. 02 (b) The allowance may be deducted on the return. The allowance may not be 03 greater than the tax determined to be payable to the state. 04 Sec. 43.44.370. Security: limitations; sale of security deposit at auction; 05 bond. (a) The department may require a retailer to deposit with the department 06 security in a form and amount that the department determines is appropriate. The 07 deposit may not be more than twice the estimated average liability for the period for 08 which the return is required to be filed or $10,000, whichever is less. The amount of 09 security may be increased or decreased by the department, subject to the limitations 10 provided in this section. 11 (b) If necessary, the department may sell at public auction property deposited 12 as security to recover a sales tax or use tax amount required to be collected, including 13 interest and penalties. Notice of the sale must be served personally on or sent by 14 certified mail to the person who deposited the security. After the sale, any surplus 15 above the amount due that is not required as security under this section must be 16 returned to the person who deposited the security. 17 (c) In lieu of security, the department may require a retailer to file a bond 18 issued by a surety company authorized to transact business in this state to guarantee 19 solvency and responsibility. 20 (d) In addition to the other requirements of this section, the department may 21 require the corporate officers, directors, or shareholders of a corporation to provide a 22 personal guaranty and assumption of liability for the payment of the tax due under this 23 chapter. 24 Sec. 43.44.380. Taxpayer quitting business; liability of successor. (a) All 25 taxes payable under this chapter are due and payable immediately whenever a 26 taxpayer quits business, sells, exchanges, or otherwise disposes of the business or 27 disposes of the stock of goods. The taxpayer shall make a return and pay the taxes due 28 within 10 days after the taxpayer quits business, sells, exchanges, or otherwise 29 disposes of the business or disposes of the stock of goods. 30 (b) Except as provided in (d) of this section, a person who becomes a 31 successor in the taxpayer's business or stock of goods is liable for the full amount of
01 the tax and shall withhold from the sales price payable to the taxpayer a sum sufficient 02 to pay any tax due until the taxpayer produces either a receipt from the department 03 showing payment in full of any tax due or a statement from the department that tax is 04 not due. 05 (c) If a tax is due but has not been paid as provided in (a) of this section, the 06 successor is liable for the payment of the full amount of tax. The payment of the tax 07 by the successor is considered to be a payment on the sales price and, if the payment is 08 greater in amount than the sales price, the amount of the difference becomes a debt 09 due to the successor from the taxpayer owing the tax under (a) of this section. 10 (d) A successor is not liable for any tax due from the person from whom the 11 successor acquired a business or stock of goods if (1) the successor gives written 12 notice to the department of the acquisition; and (2) an assessment is not issued by the 13 department against the former operator of the business within six months after receipt 14 of the notice from the successor. If an assessment is issued by the department and a 15 copy of the assessment is not mailed to the successor, the successor is not liable for the 16 tax due. 17 Sec. 43.44.390. Tax as debt. (a) The tax imposed by this chapter and related 18 interest and penalties become a personal debt of the person required to file a return 19 from the time the liability arises, regardless of when the time for payment of the 20 liability occurs. 21 (b) If the personal representative of an estate has voluntarily distributed the 22 assets held in that capacity without reserving sufficient assets to pay the taxes, interest, 23 and penalties, the personal representative is personally liable for any deficiency, to the 24 extent permitted under AS 13.16. 25 (c) This section applies to corporate officers, directors, or shareholders 26 required by the department to personally guarantee the payment of the taxes for their 27 corporation. The officer or employee of a corporation whose duty it is to collect, 28 truthfully account for, and pay to the state the taxes imposed by this chapter and who 29 fails to pay the taxes is liable to the state for the taxes imposed by this chapter and the 30 penalty and interest due on the taxes. 31 Sec. 43.44.400. Refunds and credits. The department may credit or refund
01 overpayments of taxes, taxes erroneously or illegally assessed or collected, penalties 02 collected without authority, and taxes that are found unjustly assessed or excessive in 03 amount, or otherwise wrongfully collected. The department shall set limitations, 04 specify the manner in which claims for credits or refunds are made, and give notice of 05 allowance or disallowance. When a refund is allowed to a taxpayer, it shall be paid 06 out of the general fund on a warrant issued under a voucher approved by the 07 department. 08 Article 4. General Provisions. 09 Sec. 43.44.500. Definitions. In this chapter, 10 (1) "consideration" means a valuable inducement and includes, without 11 limitation, money, property, and services; 12 (2) "engaging in business" means carrying on or causing to be carried 13 on any activity with the purpose of direct or indirect benefit; 14 (3) "lease," "leasing," or "rental," regardless of whether a transaction is 15 characterized as a lease or rental under generally accepted accounting principles, 26 16 U.S.C. (Internal Revenue Code), AS 45.01 - AS 45.08, AS 45.12, AS 45.14, and 17 AS 45.29 (Uniform Commercial Code), or other provisions of federal, state, or local 18 law, 19 (A) means a transfer of possession or control of tangible 20 personal property for a fixed or indeterminate term for consideration; a lease or 21 rental may include future options to purchase or extend; 22 (B) does not include 23 (i) a transfer of possession or control of property under 24 a security agreement or deferred payment plan that requires the transfer 25 of title upon completion of the required payments; 26 (ii) a transfer of possession or control of property under 27 an agreement that requires the transfer of title upon completion of 28 required payments if payment of an option price does not exceed the 29 greater of one hundred dollars or one percent of the total required 30 payments; or 31 (iii) providing tangible personal property along with an
01 operator for a fixed or indeterminate period of time; a condition of this 02 exclusion is that the operator is necessary for the equipment to perform 03 as designed; for the purpose of this sub-subparagraph, an operator must 04 do more than maintain, inspect, or set up the tangible personal property; 05 (C) includes agreements covering motor vehicles and trailers if 06 the amount of consideration may be increased or decreased by reference to the 07 amount realized upon sale or disposition of the property as defined in 26 08 U.S.C. 7701(h)(1); 09 (4) "maintaining an office or other place of business" means 10 (A) a person's having or maintaining in this state, directly or by 11 an affiliate, an office, distribution house, sales house, warehouse, or place of 12 business; or 13 (B) an agent's operating within this state under the authority of 14 the person or its affiliate, whether the place of business or agent is located in 15 the state permanently or temporarily or whether the person or affiliate is 16 authorized to do business in the state; 17 (5) "manufacturing" means combining or processing components or 18 materials, including the processing of ores in a mill, smelter, refinery, or reduction 19 facility, to increase the value of the components or materials for sale in the ordinary 20 course of business; "manufacturing" does not include construction; 21 (6) "permit" or "seller's permit" means a seller's permit as described in 22 AS 43.44.260; 23 (7) "person" means an individual, estate, trust, receiver, cooperative 24 association, club, corporation, company, firm, partnership, joint venture, syndicate, or 25 other entity, including a gas, water, or electric utility owned or operated by a borough, 26 municipality, or other political subdivision of the state; 27 (8) "purchase price" means "sales price" and applies to the measure 28 subject to use tax; 29 (9) "sale," "selling," or "purchasing" means the transfer of property for 30 consideration or the performance of a service for consideration; 31 (10) "sales price"
01 (A) means the total amount of consideration, including cash, 02 credit, property, and services, for which personal property or services are sold, 03 leased, or rented, valued in money, whether received in money or otherwise, 04 without any deduction for the following: 05 (i) the seller's cost of the property sold; 06 (ii) the cost of materials used, labor or service cost, 07 interest, losses, all costs of transportation to the seller, all taxes 08 imposed on the seller, and any other expense of the seller; 09 (iii) charges by the seller for any services necessary to 10 complete the sale, other than delivery and installation charges; 11 (iv) delivery charges; 12 (v) installation charges; 13 (vi) the value of exempt personal property given to the 14 purchaser where taxable and exempt personal property have been 15 bundled together and sold by the seller as a single product or piece of 16 merchandise; 17 (vii) credit for a trade-in, as determined by state law; 18 (B) does not include 19 (i) discounts, including cash, term, or coupons that are 20 not reimbursed by a third party that are allowed by a seller and taken by 21 a purchaser on a sale; 22 (ii) interest, financing, and carrying charges from credit 23 extended on the sale of personal property or services if the amount is 24 separately stated on the invoice, bill of sale, or similar document given 25 to the purchaser; and 26 (iii) taxes legally imposed directly on the consumer that 27 are separately stated on the invoice, bill of sale, or similar document 28 given to the purchaser; 29 (11) "sales tax" or "use tax" means the applicable tax imposed by 30 AS 43.44.010; 31 (12) "service" means an activity that is engaged in for another person
01 for consideration and that is distinguished from the sale or lease of property; "service" 02 includes (A) activities performed by a person for its members or shareholders; (B) 03 construction activities and all tangible personal property that will become an 04 ingredient or component part of a construction project; and (C) labor; professional 05 services; transportation; telephone or other communications service; entertainment, 06 including cable, subscription, or pay television or other telecommunications service; 07 the supplying of food, lodging, or other accommodations in hotels, restaurants, or 08 elsewhere; admission to exhibitions; the use of a computer, computer time, a computer 09 system, a computer program, a computer network, or any part of a computer system or 10 network; and the supplying of equipment for use; in determining what a service is, the 11 intended use, principal objective, or ultimate objective of the contracting parties is 12 irrelevant; 13 (13) "tangible personal property" means personal property that can be 14 seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to 15 the senses; "tangible personal property" includes electricity, water, gas, steam, and 16 prewritten computer software; 17 (14) "tax" means the tax levied by AS 43.44.010; 18 (15) "use" or "using" includes use, consumption, or storage, other than 19 storage for resale or for use solely outside this state in the ordinary course of business. 20 * Sec. 31. Section 4, ch. 100, SLA 2002, is repealed and reenacted to read: 21 Sec. 4. AS 29.45.650(a) is amended to read: 22 (a) Except as provided in AS 04.21.010(c) [AND AS 29.45.750], a borough 23 may levy a general sales tax on the sale and rental of tangible or intangible property 24 and on services provided in the borough. 25 * Sec. 32. Section 4, ch. 100, SLA 2002, as amended by sec. 31 of this Act, is repealed and 26 reenacted to read: 27 Sec. 4. AS 29.45.650(a) is amended to read: 28 (a) Except as provided in AS 04.21.010(c) [, AS 29.45.750], and in (f) and (g) 29 of this section, a borough may levy and collect a sales tax on sales, rents, and on 30 services provided in the borough. The sales tax may apply to any or all of these 31 sources. Exemptions may be granted by ordinance.
01 * Sec. 33. REPEAL. AS 29.10.200(64); 29.45.720; AS 43.40.010(m); AS 43.44.010, 02 43.44.015, 43.44.020, 43.44.030, 43.44.040, 43.44.050, 43.44.060, 43.44.090, 43.44.095, 03 43.44.100, 43.44.110, 43.44.120, 43.44.140, 43.44.150, 43.44.155, 43.44.160, 43.44.165, 04 43.44.170, 43.44.180, 43.44.190, 43.44.200, 43.44.210, 43.44.220, 43.44.230, 43.44.240, 05 43.44.250, 43.44.252, 43.44.254, 43.44.255, 43.44.260, 43.44.270, 43.44.280, 43.44.290, 06 43.44.300, 43.44.310, 43.44.320, 43.44.330, 43.44.340, 43.44.345, 43.44.350, 43.44.360, 07 43.44.370, 43.44.380, 43.44.390, 43.44.400, and 43.44.500 are repealed on January 1, 2012. 08 * Sec. 34. Sections 35, 36(b), (c), and (d), and 37 of this Act are repealed on January 1, 09 2012. 10 * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 AUTHORITY TO ENTER STREAMLINED SALES AND USE TAX 13 AGREEMENT. (a) The department is authorized and directed to enter into the Streamlined 14 Sales and Use Tax Agreement with one or more states to simplify and modernize sales and 15 use tax administration in order to substantially reduce the burden of tax compliance for all 16 sellers and for all types of commerce. In furtherance of the Streamlined Sales and Use Tax 17 Agreement, the department is authorized to act jointly with other states that are members of 18 the Streamlined Sales and Use Tax Agreement to establish standards for certification of a 19 certified service provider and certified automated system and establish performance standards 20 for multistate sellers. 21 (b) The department shall adopt regulations implementing this chapter consistent with 22 the Streamlined Sales and Use Tax Agreement. 23 (c) The department is authorized to take other actions reasonably required to 24 implement the provisions set out in this section. Other actions authorized by this section 25 include the joint procurement, with other member states, of goods and services in furtherance 26 of the cooperative agreement. 27 (d) The department or the department's designee is authorized to represent this state 28 before the other states that are signatories to the Streamlined Sales and Use Tax Agreement. 29 * Sec. 36. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 TRANSITIONAL PROVISIONS. (a) The Department of Revenue may proceed to
01 adopt regulations necessary to implement this Act. The regulations take effect under 02 AS 44.62 (Administrative Procedure Act), but not before the effective date of the provision 03 being implemented. 04 (b) A municipality that imposes a general sales and use tax shall conform its tax base, 05 including exemptions, definitions, and sourcing rules, to AS 43.44 not later than January 1, 06 2006. 07 (c) Notwithstanding any other provision of this Act, a municipality that levies a 08 general sales and use tax on the effective date of this section may continue to collect the 09 municipality's general sales and use tax through December 31, 2007. The state shall assume 10 responsibility for administering a municipal general sales and use tax on January 1, 2008, 11 unless requested to do so earlier by a municipality that has conformed its tax base, including 12 exemptions, definitions, and sourcing rules, to AS 43.44. 13 (d) The Department of Revenue may contract with a municipality that, on the 14 effective date of this section, levies a sales and use tax to provide a field office for that 15 municipality's geographical area of the state. 16 * Sec. 37. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 CONDITIONAL EFFECT. The exemption in AS 43.44.200(b), enacted by sec. 30 of 19 this Act, takes effect only if a bill passed by the Twenty-Third Alaska State Legislature 20 providing for the levy and collection of a tax on motor vehicle rentals is enacted into law. 21 * Sec. 38. If the exemption in AS 43.44.200(b), enacted by sec. 30 of this Act, takes effect, 22 it takes effect on the day the tax referred to in sec. 38 of this Act takes effect. 23 * Sec. 39. Sections 35 and 36 of this Act take effect immediately under AS 01.10.070(c). 24 * Sec. 40. Sections 21, 23, 25, 27, and 28 of this Act take effect July 1, 2003. 25 * Sec. 41. Sections 2, 4, 6, 9, 11, 13, 15, 17, 20, 22, 24, 26, 29, 32, 33 and 34 take effect 26 January 1, 2012. 27 * Sec. 42. Except as provided in secs. 38 - 41 of this Act, this Act takes effect January 1, 28 2004.