KMXT 100.1 FM Public Radio in Kodiak, Alaska
In 2019, the City of Kodiak signed the Alaska Remote Sellers Sales Tax Commission agreement with 14 other local Alaska governments to help collect sales tax from online sales. One year later, more municipalities have signed on, and it looks like the work of the Commission is paying off for the state and the City of Kodiak.
From March to September this year, the City of Kodiak collected more than $135,000 in remote sales tax revenue. That’s the sales tax that many Kodiak residents started to see this spring on their online orders.
This new revenue stream is a result of the Alaska Remote Sellers Sales Tax Commission, representing 33 local governments in Alaska.
City Finance Director Julie Liew: “It was a result of the Supreme Court case of South Dakota vs. Wayfair where they removed the requirement of physical presence and created an opportunity for sales tax collection from online sales from sellers.”
Statewide, the Tax Commission has collected over $650,000 in September, up from $570,000 in July, reflecting an upward trend in online sales tax collection since the program started in March.
For instance, in the first few months of the remote tax collection, the City received a total of $35,000.
But since then, beginning in July, the City has collected an average of over $30,000 each month from online sellers.
How will this new revenue affect the City’s budget? At this point, the City is not sure.
Liew: “We’re in the infancy of collecting sales tax from remote sellers, so it will be interesting after a full year what that will look like.”
To some extent the remote sales collection will help offset the decrease in local sales tax revenue and in hotel tax revenue, which was down by $100,000 compared to the third fiscal quarter in 2019.
The timing of this new revenue stream couldn’t be better as Mayor Pat Branson said: “It’s good to see the numbers, too.”
