The Soldotna City Council enacted an ordinance that would increase estimated revenues and appropriations by $22,325 in the General Fund for fees associated with the collection of Remote Seller Sales Tax by the Alaska Remote Seller Sales Tax Commission on behalf of the city of Soldotna. The Alaska Remote Seller Sales Tax Commission collects remote seller sales tax on behalf of municipalities across the state and fees are charged for providing such a service.
City Manager Stephanie Queen tells the city council:
“We discussed this topic at the work session in the context of FY23, but the same is true in the current year we are in whereas we, when preparing the FY22 budget, we estimated online sales tax collections at $250,000. We are now projecting that through the end of the year, we’ll be closer to $425,000. Therefore, the fees associated with that collection are higher than we had previously budgeted due to the additional revenue. Therefore, the ordinance would appropriate $22,325 additional dollars as the fees associated with that increase in revenue.”
The Biennial Operating Budget for Fiscal Years 2022 and 2023 included an estimated $250,000 in remote seller sales tax collections and $43,125 in collection fees, but the seller sales tax collections is now projected to be approximately $425,000 for FY22 with collection fees estimated at $65,450.
According to Melanie Imholte, the city’s Finance Director, fees that are charged by the Alaska Remote Sellers Sales Tax Commission are on a sliding scale dependent on the amount of sales tax collected by the Commission. They started the fiscal year at 17.25% of collections and are currently at 15.50%. Remote seller sales tax revenues need to be reported at gross and fees associated with the collection of those revenues must be reported as expenditures in the city’s financial statements.
