CSHB 303(FIN): "An Act relating to the levy and collection of a sales tax and a use tax and to levy and collection of municipal sales and use taxes; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 303(FIN) 01 "An Act relating to the levy and collection of a sales tax and a use tax and to levy and 02 collection of municipal sales and use taxes; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 29.05.210(b) is amended to read: 05 (b) The department shall provide assistance to each borough and unified 06 municipality incorporated after December 31, 1985, in 07 (1) establishing the initial sales and use tax assessment [AND 08 COLLECTION DEPARTMENT] if the borough or unified municipality has adopted a 09 sales or use tax; 10 (2) determining the initial property tax assessment roll if the borough 11 or unified municipality has adopted a property tax, including contracting for appraisals 12 of property needed to complete the initial assessment. 13 * Sec. 2. AS 29.10.200(50) is amended to read: 14 (50) AS 29.45.650 [AS 29.45.650(c), (d), (e), AND (f)] (borough
01 general sales and use taxes [TAX]); 02 * Sec. 3. AS 29.10.200(51) is amended to read: 03 (51) AS 29.45.700 [AS 29.45.700(d)] (city sales and use taxes 04 [TAX]); 05 * Sec. 4. AS 29.10.200 is amended by adding a new paragraph to read: 06 (62) AS 29.45.655 (borough specific sales and use taxes). 07 * Sec. 5. AS 29.35.170 is amended to read: 08 Sec. 29.35.170. Assessment and collection of taxes. (a) A borough shall 09 assess [AND COLLECT] property, sales, and use taxes and collect taxes, other than 10 general sales and use taxes, that are levied in its boundaries, subject to AS 29.45. 11 (b) Taxes, other than general sales and use taxes, levied by a city shall be 12 collected by a borough and returned in full to the levying city. This subsection applies 13 to home rule and general law municipalities. 14 * Sec. 6. AS 29.45.650 is repealed and reenacted to read: 15 Sec. 29.45.650. General sales and use taxes. (a) A borough may levy 16 general sales and use taxes. 17 (b) The Department of Revenue shall collect general sales and use taxes levied 18 by a municipality under this subsection and remit the proceeds to the municipality. 19 The Department of Revenue may use its administrative authority under AS 43.05 and 20 its enforcement and collection authority under AS 43.10 to collect general sales and 21 use taxes levied by a municipality under this subsection. 22 (c) For purposes of this section, "general sales and use taxes" means a sales 23 tax and a use tax that conform in all particulars to the taxes levied and collected under 24 AS 43.44, except that the taxes may be at any rate. 25 * Sec. 7. AS 29.45 is amended by adding a new section to read: 26 Sec. 29.45.655. Specific sales and use taxes. (a) A borough may levy and 27 collect specific sales and use taxes as provided in AS 04.21.010(c) and in this section. 28 The specific use tax rate must equal the specific sales tax rate, and the use tax shall be 29 levied only on buyers. A borough may levy and collect taxes under this section 30 instead of or in addition to levying general sales and use taxes under AS 29.45.650. 31 (b) A person who furnishes proof, in the form required by the borough tax
01 collector, that the person has paid a sales tax on the source on which a specific use tax 02 is levied by the borough is required to pay the specific use tax only to the extent of the 03 difference between the amount of the sales tax paid and the amount of the use tax 04 levied by the borough. This subsection applies to a sales tax levied in any taxing 05 jurisdiction whether inside or outside the state. 06 (c) If the assembly charges interest on specific sales taxes not paid when due, 07 the rate of interest may not exceed 15 percent a year on the delinquent taxes and shall 08 be charged from the due date until paid in full. 09 (d) 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 specific sales and use tax, and the 11 interest, penalties, and administration costs in the event of delinquency. When 12 recorded, the sales tax lien has priority over all other liens except (1) liens for property 13 taxes and special assessments; (2) liens that were perfected before the recording of the 14 sales tax lien for amounts actually advanced before the recording of the sales tax lien; 15 and (3) mechanics' and materialmen's liens for which claims of lien under 16 AS 34.35.070 or notices of right to lien under AS 34.35.064 have been recorded 17 before the recording of the sales tax lien. 18 (e) A borough may not levy and collect a specific sales tax on a purchase 19 made with 20 (1) food coupons, food stamps, or other type of certificate issued under 21 7 U.S.C. 2011 - 2025 (Food Stamp Act); or 22 (2) food instruments, food vouchers, or other type of certificate issued 23 under 42 U.S.C. 1786 (Special Supplemental Food Program for Women, Infants, and 24 Children). 25 (f) A borough may not levy or collect a specific sales tax on sales, rents, and 26 services, or a use tax on the storage, use, or consumption of personal property on the 27 following activities: 28 (1) the sale, lease, rental, storage, consumption, or distribution in the 29 state of or the provision of services relating to an orbital space facility, space 30 propulsion system, or space vehicle, satellite, or station of any kind possessing space 31 flight capacity, including the components of them;
01 (2) the sale, lease, rental, storage, consumption, or use of tangible 02 personal property placed on or used aboard an orbital space facility, space propulsion 03 system, or space vehicle, satellite, or station of any kind, regardless of whether the 04 tangible personal property is returned to the state for subsequent use, storage, or 05 consumption; an exemption under this paragraph is not affected by the failure of a 06 launch to occur or the destruction of a launch vehicle or a component of a launch 07 vehicle. 08 (g) For purposes of this section, "specific sales and use taxes" means a sales 09 tax on the sale of a specific category of goods, on the sale of real property, on a 10 specific category of rents, or on a specific category of services performed for 11 consideration in the borough, along with a corresponding use tax. Specific sales and 12 use taxes that may be levied and collected under this section include, by way of 13 example and not limitation, an alcohol tax, a fuel tax, and a hotel bed tax. 14 * Sec. 8. AS 29.45.700 is repealed and reenacted to read: 15 Sec. 29.45.700. Power of levy. A city may 16 (1) levy general sales and use taxes in the manner provided for 17 boroughs under AS 29.45.650; and 18 (2) levy and collect specific sales and use taxes in the manner provided 19 for boroughs under AS 29.45.655. 20 * Sec. 9. AS 43 is amended by adding a new chapter to read: 21 Chapter 44. Sales and Use Taxes. 22 Sec. 43.44.010. Levy of sales and use taxes; tax rate. (a) A sales tax is 23 levied on the sale of goods, on the sale of real property, on rents, and on services 24 performed for consideration. 25 (b) A use tax is levied on the storage, use, or consumption of goods acquired 26 on or after January 1, 2003, on the storage, use, or consumption in the state of goods 27 or a service stored, used, or consumed after January 1, 2003, and the use of real 28 property acquired on or after January 1, 2003, the sale of which, if it had occurred in 29 this state, would be subject to tax under (a) of this section. The use tax is not levied if 30 the tax under (a) of this section has been paid on the property. 31 (c) The rate of the sales tax shall be applied to the price of goods sold, the
01 price of real property sold, rents, and the value of services performed. The rate of the 02 use tax shall be applied to the value of the goods or services stored, used, or 03 consumed. The applicable tax rate for a calendar year is: 04 (1) three percent if, on September 30 of the previous year, the 05 unaudited balance in the budget reserve fund created by art. IX, sec. 17, Constitution 06 of the State of Alaska, was equal to or less than $2,000,000,000; 07 (2) two percent if, on September 30 of the previous year, the unaudited 08 balance in the budget reserve fund created by art. IX, sec. 17, Constitution of the State 09 of Alaska, was more than $2,000,000,000 but not more than $2,500,000,000; 10 (3) one percent if, on September 30 of the previous year, the unaudited 11 balance in the budget reserve fund created by art. IX, sec. 17, Constitution of the State 12 of Alaska, was more than $2,500,000,000. 13 (d) As soon as practicable after September 30 of each year, the department 14 shall publish the applicable tax rate under this section for the following calendar year. 15 Sec. 43.44.020. Exemptions. The tax levied under AS 43.44.010 does not 16 apply to 17 (1) goods sold, real property sold, rents, or services performed that are 18 (A) explicitly exempted from taxation under another provision 19 of state law; or 20 (B) exempt from taxation under federal law, including sales to 21 the federal government, and purchases made with 22 (i) food coupons, food stamps, or other types of 23 certificates issued under 7 U.S.C. 2011 - 2036 (Food Stamp Act); and 24 (ii) food instruments, food vouchers, or other types of 25 certificates issued under 42 U.S.C. 1786 (special supplemental nutrition 26 program for women, infants, and children); 27 (2) sales of goods or services for resale, including the sale and 28 transportation of goods that are used in connection with or will become an ingredient 29 or component part of goods manufactured, processed, or fabricated for resale; 30 (3) electricity, natural gas, water and sewer utility services, and fuel for 31 heating or electrical generation;
01 (4) funeral, cemetery, and crematory goods and services; 02 (5) health care services provided by a person licensed or certified to 03 provide those services under AS 08, by a public home care provider as that term is 04 defined in AS 47.05.017(c), by a health care facility operating under a certificate of 05 need issued under AS 18.07, by a hospital licensed under AS 18.20, or by an assisted 06 living home licensed under AS 47.33; 07 (6) prescription drugs, devices, and supplies prescribed by a person 08 licensed to prescribe those goods under AS 08; 09 (7) interest earned or paid by banks, brokerage firms, savings and loan 10 associations, credit unions, and investment banks, and the following sales and services 11 provided by banks, brokerage firms, savings and loan associations, credit unions, and 12 investment banks: 13 (A) services associated with any deposit accounts, including 14 service fees, insufficient funds fees, and attachment fees; 15 (B) fees for the purchase of bank checks, money orders, 16 traveler's checks, and similar products for payment; 17 (C) loan fees and points associated with loan transactions; 18 (D) pass-through charges on loan transactions that include sales 19 tax; 20 (E) services associated with the sale, exchange, or transfer of 21 currency, stocks, bonds, and other securities; 22 (8) sales and purchases by federal, state, or local government entities; 23 (9) wages, salaries, commissions, and any other form of remuneration 24 paid to employees for personal services; 25 (10) educational services provided by a non-exempt or exempt 26 religious or other private school reporting to the commissioner of education and early 27 development under AS 14.45.030 or 14.45.110(b) or by a postsecondary educational 28 institution authorized to operate under AS 14.48; 29 (11) refined petroleum products taxed under AS 43.40; 30 (12) real estate rentals of 30 consecutive days or more; 31 (13) construction services;
01 (14) admission to museums and historic sites; 02 (15) sales made to an entity described in 26 U.S.C. 501(c)(3) (Internal 03 Revenue Code) and exempt from federal income tax under 26 U.S.C. 501(a); 04 (16) sales made by an entity described in 26 U.S.C. 501(c)(3) (Internal 05 Revenue Code) and exempt from federal income tax under 26 U.S.C. 501(a) if the 06 income from the sale is exempt from federal income taxation; 07 (17) casual and isolated sales or rentals by a seller who does not 08 regularly engage in the business of selling goods or services, or making rentals, but 09 only if 10 (A) the total sales do not exceed $1,000 a year and the sales of 11 goods do not occur for more than 14 days in a calendar year; or 12 (B) the sales of goods are made by a licensed business to sell 13 business equipment used in the business and not held as inventory; 14 (18) sales of insurance and bonds of guaranty and fidelity, and 15 commissions on those sales. 16 Sec. 43.44.030. Maximum value or amount of transaction subject to tax. 17 (a) The sales and use taxes levied under AS 43.44.010 shall be applied only to the first 18 $2,000 of each separate sale, rent, or service transaction, except as otherwise provided 19 in this section. 20 (b) Except as provided in (f) of this section for long-term personal property 21 leases, the payment of rent, whether for real or personal property, in excess of $2,000 22 and for more than one month, shall be treated as several separate transactions covering 23 the rental or lease for one month each. 24 (c) A transaction involving payment for services to be rendered or delivered 25 over a period of more than one month for a consideration in excess of $2,000 shall be 26 treated as several separate transactions occurring once each month over the period of 27 time that the service is rendered or delivered. 28 (d) Services provided on account and billed to the purchaser on a monthly 29 basis are subject to application of the tax on a maximum of $2,000 of each monthly 30 billing, for each account. 31 (e) Each night's rental of overnight accommodations for fewer than 30
01 consecutive days total shall be considered a separate transaction and the maximum tax 02 computation shall be calculated on a per room per night basis. 03 (f) Long-term personal property leases shall be treated as one transaction for 04 each year and for each fractional year, or for the lease term, whichever is longer. The 05 tax paid for a fraction of a year shall equal the tax paid for a whole year. The sales tax 06 for the entire long-term personal property lease shall be due and collected at the time 07 of the first payment. The taxes may not be refunded if the lease terminates earlier than 08 on its terms. An extension of the initial lease term shall be treated as a new long-term 09 personal property lease. For purposes of this subsection, a long-term personal 10 property lease is a lease that grants use of the property for a period of more than one 11 month; a long-term personal property lease does not include month-to-month rental 12 agreements. 13 Sec. 43.44.040. Collection of sales tax. (a) A seller shall add the amount of 14 the tax levied by this chapter to the total price of goods, rentals, or services subject to 15 the tax, and the tax shall be stated separately on any sales receipt, invoice, or other 16 record of the sale or rental, except as provided in (d) of this section. 17 (b) A seller shall collect the tax from the purchaser and remit the tax collected 18 to the department not later than 30 days following the last day of the month in which 19 the tax was collected. However, a seller that collects less than $1,000 in tax in a 20 calendar quarter may remit the tax within 30 days following the last day of the 21 calendar quarter in which the tax was collected. 22 (c) A seller remitting the tax collected under this chapter to the department as 23 required under (b) of this section and filing a complete and timely return on a form 24 prescribed by the department may retain one percent of the amount collected to cover 25 expenses associated with collecting and remitting the tax. 26 (d) A person may not include the tax in the sales price except for sales by 27 coin-operated devices, sales of food and beverages at concession stands, bars, and 28 movable vendor carts, metered sales where the sales price is computed by the metering 29 device, general admission tickets and cover charges to places of amusement, parks, 30 movies, plays, concerts, bars, and other events, taxicab fares, and as otherwise 31 determined or allowed by the department.
01 Sec. 43.44.050. Payment of use tax. A buyer subject to the use tax shall 02 remit the tax to the department not later than 30 days following the last day of the 03 month in which the taxable storage, use, or consumption occurs. 04 Sec. 43.44.060. Accounting. The department shall deposit the proceeds of the 05 sales and use tax levied under this chapter in the general fund of the state. 06 Sec. 43.44.070. Exemption certificate. The department shall provide 07 exemption certificates for buyers and sellers exempt from payment of the tax under 08 AS 43.44.020(2), (15), and (16). 09 Sec. 43.44.080. Nexus. (a) A business that has nexus with Alaska for sales or 10 use tax purposes but is not required to hold a business license under AS 43.70 must 11 register with the department for the collection and remittance of the sales and use tax 12 under this chapter. 13 (b) To the fullest extent permitted by the Constitution of the United States, a 14 person that possesses a legally sufficient minimum contact with the state shall collect 15 the sales and use taxes imposed by this chapter and remit the taxes to the department 16 as required by this chapter. 17 * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 TRANSITION: REGULATIONS. The Department of Revenue may proceed to adopt 20 regulations necessary to implement the provisions of this Act. The regulations take effect 21 under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 22 provision being implemented. In adopting regulations, the department shall strive for 23 consistency with the Streamlined Sales Tax Project. 24 * Sec. 11. Section 10 of this Act takes effect immediately under AS 01.10.070(c). 25 * Sec. 12. Except as provided in sec. 11 of this Act, this Act takes effect January 1, 2003.