The Soldotna City Council voted to increase estimated revenues and appropriations by $43,125 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. A previous city resolution authorized the commission to implement, administer, and enforce the provisions of Kenai Peninsula Borough Code on behalf of the City of Soldotna. Fees are charged by the Commission for the collection of remote seller sales tax on behalf of member municipalities across the state. The city estimates remote seller sales tax collections to be $250,000 in FY21 with estimated collection fees of $43,125.
City Manager Stephanie Queen, “We briefly discussed this during the budget work session, but this refers to the fees that are collected by the Remote Sales Tax Commission on internet sales. Previously, we have been reporting the net revenue that comes to the city after those fees are removed and we learned more recently that according to best accounting principals, we need to report the gross amount of revenue as well as an expense for those fees. This ordinance would amend our budget documents so that we are appropriately reporting the fees. It does not impact the finances of the city. It’s just updating our budget to reflect that best reporting practice.”
The fees that are charged by the commission are on a sliding scale dependent on the amount of sales tax collected by the Commission. Fees currently are 17.25% of remote seller sales tax collections. As more municipalities become members and as more remote sellers become registered, the fees may go down. Collection fees, according to the city, was not budgeted separately in the FY21 Approved Operating Budget.
Ordinance 2021-010 passed on a 5-0 vote.