Legislature(2015 - 2016)SENATE FINANCE 532
03/25/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB33 | |
| SB49 | |
| SB32 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 33 | TELECONFERENCED | |
| + | SB 49 | TELECONFERENCED | |
| + | SB 32 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 33
"An Act relating to remittance of tire fees; and
providing for an effective date."
9:05:36 AM
ANNA KIM, TAX DIVISION, DEPARTMENT OF REVENUE, discussed SB
33. She explained that the bill changed the due date of the
tire fee return and payment from 30 days (following the
calendar quarter) to the last day of the calendar quarter
in which the tires were sold or studs were installed. The
rationale for the bill was to mitigate taxpayer confusion
that was a result of quarterly tax due-dates that fell
prior to the last day of the month, and had resulted in
late fees and penalties.
Ms. Kim went over the legislation, explaining that Section
1 changed the due date of the tire fees. Currently for the
months of July, October and January the fees were due on
the 30th of the month; the bill would set the due date on
the last day of each month. She explained that Section 2
aligned the payment dates used to determine the timely pay
credit (compensation to taxpayers for timely collection and
remittance) with the new dates in Section 1. She specified
that the timely pay credit was equal to 5 percent of
collected taxes, not to exceed $900 per quarter. Section 3
applied to the due date, which would be changed to the
first calendar quarter after the effective date of the act.
Section 4 indicated that the act would take effect
immediately.
9:08:10 AM
Ms. Kim stated that the attached fiscal note was zero, and
furthered that there were no new positions proposed. She
clarified that there would be an approximate $5,000
reduction from a change in revenue due to an estimated
$2,500 increase in the timely pay credit and an estimated
$2,500 less in penalties collected.
Vice-Chair Micciche noted that he had a constituent that
commented on the bill, and asked Ms. Kim to verify if there
was an increase in the per-tire fee associated with the
legislation. Ms. Kim responded in the negative.
Co-Chair MacKinnon asked if the bill addressed a quarterly
fee. Ms. Kim answered in the affirmative.
Co-Chair MacKinnon observed that the state was collecting
about $1.3 million in tire fees, and that the penalties and
interest had gone down over time. Ms. Kim agreed.
Co-Chair MacKinnon wondered if the administration still
believed there was a reason some taxpayers were not aware
of the current fee timetable. Ms. Kim discussed education
and outreach with taxpayers that resulted in a reduction in
penalties and interest over time. She thought the
legislation was a simple administrative change to bring
more efficiency to the system.
Co-Chair MacKinnon shared that in 2012 the penalties in
interest for the tire fee was $20,026, in 2013 it was
$18,435, in 2014 it was $3,477; and reflected a significant
drop in penalties to taxpayers. She commended the
administration for its work.
9:10:42 AM
Co-Chair MacKinnon asked for clarification as to what would
happen if the last day of the month fell on a Saturday or
Sunday.
BRANDON S. SPANOS, DEPUTY DIRECTOR, TAX DIVISION,
DEPARTMENT OF REVENUE (via teleconference), cited Title
43.05, which allowed for the payment due date to be
extended to the next business day if it fell on a weekend
or holiday. He added that the significantly lower penalty
and interest fees from 2014 had been due to the department
tax auditors being completely engaged in developing a new
revenue management system and having no time to complete
audits.
Co-Chair MacKinnon wondered if the bill was necessary. Mr.
Spanos explained that there was still an occasional
taxpayer that expressed confusion with the current due
dates. He expressed the need for alignment with other
quarterly tax filings.
9:12:48 AM
Senator Hoffman asked about the justification for the tire
fee, and wondered if other states employed the same fees.
Mr. Spanos was not aware of the fees other states employed.
He explained that the tire fee (for studded tires
specifically) was created to assist in revenue for the
deterioration of roads. He added that the fee for studded
tires was twice that of regular tires.
Senator Hoffman asked if there was a differentiation
between the fees of studded and regular tires. Mr. Spanos
explained that the $2.50 new tire fee applied to all new
tires sold, with an additional $5 fee for studded tires.
Senator Hoffman commented that the most significant damage
to roads in Alaska was due to studded tires, and the
expense ran into the tens and possibly hundreds of millions
of dollars. He wondered how tire fees in Alaska compared to
other states. Mr. Spanos agreed to get back to the
committee with the information.
Ms. Kim interjected that the classification of studded
tires in the current statute was defined by "heavy studs"
that weighed 1.1 grams or more. She concurred that the
department would provide information about how Alaska
compared to other states.
Vice-Chair Micciche asked what year Alaska started
collecting tire fees. Ms. Kim thought that the original
bill to collect the fees was passed in 2003.
9:16:07 AM
Co-Chair MacKinnon OPENED and CLOSED public testimony.
SB 33 was HEARD and HELD in committee for further
consideration.