Petersburg’s borough assembly Monday voted to join in a statewide effort to collect sales tax for online purchases.
The Alaska Municipal League is heading up the effort to form something called the Alaska Remote Seller Sales Tax Commission. That organization would collect tax from online companies and then pay most of that to cities and boroughs that are members.
Borough finance director Jody Tow told the assembly she had read that the revenue that could be paid to municipalities could be around 20 percent of what that government already collects on sales from brick and mortar stores in the community.
“For instance we bring in about three million dollars of sales tax.,” Tow said. “Twenty percent of that is 600,000 dollars. They’re thinking that we could see up to that amount of sales tax revenue from online sales. I’m going to say that might be a little high but it’s pretty exciting especially in the times when we’re facing state cuts. It puts local businesses on a more of an even playing field with online vendors so this is a really good thing.”
It’s still early in the process for forming that commission and the details are not all decided yet. But the borough assembly will have to vote again on the provisions of how the commission will operate, how much revenue it will keep to pay a staff and other expenses for collecting and paying out that tax.
The vote was unanimous in support of a resolution. Petersburg joins numerous other municipalities in that effort. It is underway because of a U.S. Supreme Court decision last year allowing that tax collection. Some companies like Amazon have already started to collect the tax and pay it to Petersburg voluntarily following that court ruling.