Legislature(2013 - 2014)BUTROVICH 205
03/27/2013 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HJR6 | |
| SB71 | |
| App Project Update | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 71 | TELECONFERENCED | |
| += | HJR 6 | TELECONFERENCED | |
SB 71-PAYMENT OF FISHERY RESOURCE LANDING TAX
3:38:23 PM
CHAIR GIESSEL announced SB 71 to be up for consideration.
SENATOR MICCICHE, sponsor of SB 71, said this is just a bill
about fairness. It really just repairs glitches in the landing
resource tax statutes and regulations. It removes the potential
for unfair penalties and interest by commercial fishermen by
changing the current tax payment due date to align with the date
the actual data they use for their report is due by making it
due 30 days after.
He explained that Section 1 aligns the date that the resource
landing tax is due with the date that the statewide average fish
price report is released. Currently the report is due March 31
or the last day of the month following a month in which the
state publishes the statewide prices, but in many cases those
prices aren't even published when the report is due. So, the
mismatch in time results in late payment fines and interest for
well-intentioned producers. This measure would allow fishing
families to spend time fishing and not waste time on unnecessary
government regulation that has no value.
Section 2 also changes the timing of the estimated tax payments
needed to avoid estimated tax penalty to either 90 percent of
the amount calculated by multiplying the actual price paid at
the time the fishery resource was landed by the appropriate tax
rate or 100 percent of the taxpayer's liability for the prior
year.
SENATOR MICCICHE explained that the current statute includes
provisions for four equal quarterly payments, but that is not
how fisheries work. SB 71 allows fishermen to pay their taxes in
periods of time when they actually fished. It results in the
same amount but without the fines for lateness they can't help;
it creates a fair and equitable tax system by aligning the date
of the tax with the actual report that is published by the
Alaska Department of Fish and Game (ADF&G).
3:40:43 PM
SENATOR FAIRCLOUGH said she wanted to know from the Department
of Revenue (DOR) if the state actually has delinquent taxes that
are being paid under this scenario.
JOHANNA BALES, Deputy Director, Tax Division, Department of
Revenue (DOR), Anchorage, Alaska, answered yes and explained
that the taxpayers try to estimate the payment and pay it by
April 1, but they are often underpaid. However, the department
does not assess the penalty, because they understand that it is
reasonable cause. But the taxpayers are subject to interest that
is currently at 11 percent and that causes some hardship for
some.
SENATOR FAIRCLOUGH asked if anyone has overpaid the tax that the
state is paying back the 11 percent interest.
MS. BALES answered no that hasn't happened, because by statute
even though they are required to pay interest, they are only
required to if they don't issue a refund within 90 days and
normally the department does that.
SENATOR BISHOP asked if she had the sponsor statement in front
of her.
MS. BALES answered no, but that she had read it.
SENATOR BISHOP noted that the fourth paragraph says, "depending
on the fishery, the current statute requires payment of 50
percent of the landing taxes before they have even left the dock
to go fishing," and asked if a taxpayer is in arrears, does he
have to pay 50 percent of that before being allowed to leave the
dock to go fishing.
MS. BALES replied that could potentially happen, because right
now the estimated payments are required in four equal
installments that begin with the first of a fishing year, which
would be of the calendar year of January 1. So, a first payment
would be due March 15 and then June 15, September 15 and
December 15. It is possible if a fishery hasn't opened yet that
a taxpayer will have to make a payment.
SENATOR BISHOP remarked that they owe the money but they can't
leave the dock to go out and make the money to pay the debt.
SENATOR MICCICHE said they are likely not in arrears; they are
paying taxes on fish yet to be caught and that is unfair.
SENATOR FAIRCLOUGH wondered why the department hadn't brought it
forward sooner, because it seems so unfair.
3:44:45 PM
MS. BALES responded that they have been aware of this concern by
fishermen and have talked to different legislators about it
before and nothing was done. But now seems to be a good time.
SENATOR FAIRCLOUGH asked if the administration supported the
change.
MS. BALES said the department doesn't oppose it and had no
issues with doing it.
3:46:13 PM
JULIANNE CURRY, Executive Director, United Fishermen of Alaska
(UFA), Juneau, Alaska, supported SB 71, because it will change
current statutes regarding the timing and requirement of four
equal payments in estimated fisheries resource landing tax. SB
71 aligns the due date of paying the tax with the date the
corresponding report is due. The report is due March 31 or the
last day of the month following the month in which the state
publishes the statewide prices that must be used on the return
which generally is in May, but the tax is due on April 1. This
mismatch in timing results in late payment fines and interest
for well-intentioned producers as well as confusion,
frustration, and wasted time that could best be spent harvesting
and processing fish to increase revenue.
The current statute includes provisions for four equal payments,
but with the seasonal nature of many fisheries and the
variability in harvest, it's virtually impossible for resource
landing taxpayers to accurately predict their full-year's
harvest to calculate equal payments.
She concluded that SB 71 would create a fair and equitable tax
system by aligning the date of the tax with the report.
3:48:09 PM
KATHY HANSEN, Executive Director, Southeast Alaska Fishermen's
Alliance (SEAFA), Juneau, Alaska, said she is the one who
brought this legislation to Senator Micciche's attention and
thanked him for introducing it. She didn't know why it hadn't
been brought forward earlier other than that there has been
controversy over the landing tax in the past. This was brought
to her attention by a couple of her members who didn't want to
pay interest again on not having accurately calculated what they
thought they owed. It is a fairness issue, but they wouldn't
hear from a lot of people about it, because it only affects 67
landing taxpayers.
MS. HANSEN said they had received a letter from the Alaska
Scallop Association, which industry doesn't even start fishing
until the third quarter of the year. This is an example of
someone paying two quarters worth of tax or just not paying it
because they don't know if they will even have an income, a
season or how much they will make and then go back and pay the
penalties. These are the ones that are currently paying the
penalties.
3:50:11 PM
SENATOR DYSON stated that Ms. Bales said penalties weren't being
paid just interest.
MS. CURRY agreed that is what she said, but she would have to
check the background information she had received. She knew it
was interest for sure.
CHAIR GIESSEL, finding no further comments, closed public
testimony and held SB 71 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 71 version A.pdf |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SB 71 Sponsor Statement.PDF |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SB 71 Fiscal Note DCCED-DCRA-03-22-13.pdf |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SB 71-Fiscal note DOR-TAX-03-22-13.pdf |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SB 71 Alaska Tax Division 2012 Annual Report.PDF |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SB 71 Support - Alaska Scallop Association.pdf |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SB 71 Support - Southeast Alaska Fishermen's Alliance.pdf |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SB 71 Support - J&R Fisheries - 3-15-13.PDF |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SB 71 UFA support SRES 03 25 13.pdf |
SRES 3/27/2013 3:30:00 PM |
SB 71 |
| SRES Presentation Commercializing NS Gas Update Sullivan 2013.03.27.pdf |
SRES 3/27/2013 3:30:00 PM |
|
| HJR 6 vs O.pdf |
SRES 3/27/2013 3:30:00 PM |
HJR 6 |