Legislature(2013 - 2014)SENATE FINANCE 532
02/10/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB93 | |
| SB71 | |
| HB193 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 93 | TELECONFERENCED | |
| + | SB 71 | TELECONFERENCED | |
| + | HB 193 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 71
"An Act relating to the filing date for the final
quarterly payment of, and to the assessment of
penalties under, the fishery resource landing tax."
10:10:17 AM
Vice-Chair Fairclough MOVED to ADOPT the proposed committee
substitute for CS SB 71 (FIN), Work Draft 28-LS0594\N
(Bullard, 2/7/14). There being NO OBJECTION, it was so
ordered.
SENATOR PETER MICCICHE, explained that SB 71 was introduced
to repair glitches in the landing resource tax statutes and
regulations that were requiring the payment of unfair
penalties and interest by commercial fishermen. Section on
aligned the date that the resource landing tax was due with
the date that the statewide average fish price report was
released. Currently the tax was due before April 1,
however, the statewide average fish price report, which was
calculated by the Department of Fish and Game (DFG) was not
always released by that time. While the Department of
Revenue (DOR) can grant an automatic extension to file the
landing tax return if the report was not released at least
30 days prior to the due date, this did not extend the time
for payment of the tax so penalties and interest could
occur. Section 2 of the legislation still maintained that
one must pay at least 100 percent of the previous year's
tax liability or at least 90 percent of the estimated
amount owed but took out the requirement for equal payments
each quarter and lets commercial fishermen pay tax based on
the earning s for the quarter. Depending on the fishery,
the current statute required payment of 50 percent of the
landing taxes before they had even left the dock to go
fishing.
10:15:25 AM
Co-Chair Meyer looked at Section 3, and noted the three
different methods of making tax payment. He asked for
further explanation of that section. Senator Micciche
deferred to Mr. Cottongim.
TIM COTTONGIM, REVENUE AND AUDIT SUPERVISOR, DEPARTMENT OF
REVENUE, stated that the calculation in sub-Section 3
required the processor to determine the amount of activity
for each quarter. In calculating the tax, they would
determine the amount of pounds landed in each quarter. They
would then take the number pounds landed for the
unprocessed resource; identify the last posted DOR
statewide average price list; calculated the value for the
resource using the prices for each of the species that they
landed; and take that value and multiply it by the 3
percent tax rate, taking 90 percent of that result which
would be their installment.
Vice-Chair Fairclough looked at Section 3, line 20. She
noted that if a tax payer had to choose a method each year,
the tax payer may get caught by not choosing. She asked if
there had been a conversation regarding the same form of
the tax method from a previous year moving forward, versus
the annual paperwork requirement to inform the department
of one's actions. Mr. Cottongim responded that the option
to notify the department by March 31 each year was only
necessary if the applicant chose the last E-3 option. He
remarked that DOR was always looking to see if they had
fulfilled the two requirements through safe harbors. The
third option would be particularly challenging for the
taxpayer, so it was thought that the paperwork could give
the tax payer an opportunity to be better prepared and know
that they would be required to make those calculations. It
also allowed for DOR to prepare, because DOR needed to
verify that the calculations were correct.
Vice-Chair Fairclough stated that she would have a
discussion with the sponsor off the record.
Senator Micciche announced that fisheries were constantly
changing, and remarked that many of them fished in
different quarters throughout the year or participate in
different fisheries across the state.
Vice-Chair Fairclough wondered if there was any consistency
in removing that particular paperwork requirement. Senator
Micciche replied that there could be some work saved, but
stressed that the fishery would be in communication with
DOR regardless of the paperwork requirement.
10:20:37 AM
KATHY HANSEN, EXECUTIVE DIRECTOR, SOUTHEAST ALASKA
FISHERMANS ALLIANCE, testified that the bill would affect
some of the members of the Southeast Alaska Fisherman's
Alliance. She felt that the legislation was a simple fix
that aligned the reporting date and the actual payment of
the taxes so that the tax payer did not automatically pay
interest and penalties every year. She felt that the glitch
was developed over time, and spoke in support of the
legislation. She noted the E-3 requirement regarding the
four installments calculated quarterly, and announced that
many of the fishermen preferred that method, because they
were paying on what they had actually earned in that
quarter. She stated that the fisheries that were required
to pay a fishery landing tax would be allowed an option to
pay in accordance with what they were actually catching.
Co-Chair Meyer CLOSED public testimony.
10:23:47 AM
Co-Chair Meyer looked at the zero and indeterminate fiscal
notes. He noted that there would be some revenue in the
form of late payments, and remarked that there was total
revenue of $17,954 for FY 13 and $9,000 for FY 12. He asked
why there was an almost doubling in revenue in just one
year. Senator Micciche responded that the beta for
fisheries can change dramatically from year to year. He
stressed that individuals and fisheries should be charged
late fees that have control over timing and filing. He
stressed that the vast majority of the current fees were
because of conditions that could not be controlled by the
fisheries.
Co-Chair Meyer wondered to whom the bill directly applied.
Senator Micciche replied that the legislation applied to
fishermen and processors that were responsible for paying a
landing tax in Alaska.
Senator Olson looked at Section 3, line 14, regarding the
installments that were outlined. He wondered if Senator
Micciche agreed that the fishermen supported that
installment plan. Senator Micciche replied that he believed
that the fishermen supported the installment plan, because
of the flexibility. He stressed that it was most important
for fisheries and processors to pay their landing taxes.
Senator Bishop felt that the bill would have a positive
effect on some smaller processors with a smaller cash flow.
Co-Chair Meyer wondered when there would be a true-up. If
the 90 percent were paid, but the estimate needed to match
up with the actual revenue at a certain point. Mr.
Cottongim replied that the true-up would occur at the end
of the year, when the fishery or processor files their tax
return.
Vice-Chair Fairclough MOVED to ADOPT Amendment 1 (copy on
file):
Section 3, letter (e), number (1):
after "preceding" insert the word "or"
There being NO OBJECTION, it was so ordered.
Vice-Chair Fairclough MOVED to REPORT CS SB 71(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes.
CS SB 71(FIN) was REPORTED out of committee with a "do
pass" recommendation and with new zero fiscal note from the
Department of Commerce, Community, and Economic
Development; and a new indeterminate fiscal note from the
Department of Revenue.
10:29:21 AM
AT EASE
10:30:21 AM
RECONVENED