Alaska communities are one step closer to collecting online sales tax

Alaska Municipal League announced a plan to create a single commission to collect and disperse tax revenue from online retailers to individual communities. (Creative Commons photo by Public.Resource.Org)

Alaska communities that collect sales tax are getting close to leveling the playing field between online retailers and brick and mortar stores.

Last week, the Alaska Municipal League, or AML, announced a plan to create a statewide code and commission to oversee the collection of sales taxes from out-of-state businesses.

Online retailers would register with the commission rather than the more than 100 individual local governments currently collecting sales tax.

A 2018 Supreme Court decision allowed states to charge sales tax on purchases from out-of-state online retailers.

But Alaska doesn’t have a statewide sales tax. AML spent the last year figuring out how to streamline sales tax collection from online retailers.

Some online retailers are already charging sales taxes, like Amazon.  But, that company’s tax collection only applies to certain purchases.  And, because there are so many different sales tax jurisdictions in Alaska, the amount is sometimes wrong.

AML says establishing a statewide administration to oversee collection will make it easier for local businesses to compete with online retailers. It also benefits local governments, which miss out on millions of dollars in sales tax revenue from online retailers every year.

Municipalities that sign on will keep their individual sales tax rates and exemptions, but agree to a central administration for collection. Each one will need to adopt the agreement at the local level in order to participate.

AML hopes to establish the commission at its annual conference in Anchorage next month and start collecting sales taxes in January. It’s already advertising an opening for someone to administrate the program.

The City and Borough of Juneau has been working with AML throughout the planning process. The Juneau Assembly expects to vote on the resolution at its Nov. 4 meeting.

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