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Letters to the Editor

Posted: Monday, December 02, 2002

Recreation industry should take note of proposed sales tax changes

The Kenai Peninsula Borough is about to change the way you will be doing business next year.

Somehow the borough has come to the conclusion that it is not fair for you to be getting away with charging groups of people a flat $25 tax on a total package sale. The borough believes that it is more fair to change all that by forcing you to calculate a night's rental on a per room, per night basis. The borough also wants to force only recreational sales to charge

clients per person, per day instead of by the total package.

This "ordinance train" has not only left the station but is well down the track and,barring a miracle, will become standard sales tax collection procedure next year.

I returned from the borough assembly meeting on Nov. 19, and the assembly really wants to put this on the books. Not a single person from the Soldotna recreational industry showed up to protest this drastic change. No sportfish organizations, no businesses, nothing showed up and basically no one said a word from Soldotna.

If you will read Ordinance 2002-39, you will see that just about every business around the recreational industry will receive an exemption-waiver and some, like air taxi operators, are already exempt.

The reason this major sales tax increase is about to fall on the recreational industry is because even as it was and is still being warned, it is the only industry which has failed to show up to protest.

It is not on the books yet but it was just scheduled for what will no doubt be its last hearing at 7 p.m. Dec. 10 at the Kenai Peninsula Borough building.

They have been looking for a way to slow the recreational industry down. I guess they have finally found one. You may want to write your borough assembly member before it is too late.

Kenai Peninsula Borough

Ordinance 2002-29

An ordinance amending numerous provisions of KPB Chapter 5.18, SALES TAX

Whereas, on December 12, 2001, a sales tax review committee was formed to research, review and recommend a simpler, more equitable, more progressive sales tax system; and

Whereas, the assembly finds it is in the best interest of the borough to amend the sales tax code as follows:

Now, therefore, be it ordained by the assembly of the Kenai Peninsula Borough:

SECTION 12. That KPB 5.18.430 is amended as follows:

The tax shall be applied only to the first $500 of each separate sale, rent or service transaction, except as otherwise provided in this section.

B. A transaction involving payment for services or personal property to be rendered or delivered over a period of more than one month for a consideration in excess of $500 shall be treated as several separate transactions occurring one each month over the period of time that the service or property is rendered or delivered.

C.b. Services provided on account and billed to the customer on a monthly periodic basis are subject to application of the tax on a maximum of $500 of each monthly billing, per account.

For purposes of this section, any advance payment for services other than to a trust or escrow account is considered to be paid pursuant to a "billing."

D.c.Each night's rental of each individual room shall be considered a separate transaction and therefore the maximum tax computation shall be calculated on a per room per night basis.

D. Recreational sales shall be treated on a per person per day basis and therefore the maximum tax computation shall be calculated on a per person per day basis.

Don Johnson, Soldotna



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