Alaska City to Impose Requirements for Remote Sellers and Marketplace Facilitators

The City Council of Nome, Alaska approved an ordinance on August 26, 2019 later signed by the mayor that will require remote sellers and marketplace facilitators to collect and remit sales tax if they exceed certain economic thresholds, effective September 1, 2019. Alaska does not impose a statewide sales tax, but local jurisdictions are allowed to impose their own local sales taxes.

Remote sellers and marketplace facilitators have economic presence in the city if, in the previous or current calendar year:

  • the seller’s gross revenue from sale(s) of property, digital product, or services delivered into the state is more than $100,000; and
  • the seller sold property, digital product, or services delivered into the state in more than 100 separate transactions


The ordinance defines a “marketplace facilitator” as a person who owns or maintains a marketplace and who with respect to a marketplace seller’s goods or services, transmits or otherwise communicates an offer or acceptance and:

  1. Provides payment processing services;
  2. Provides fulfillment or storage services;
  3. Sets prices;
  4. Brands sales as those of the marketplace facilitator;
  5. Takes orders; or
  6. Provides customer service or assists with returns or exchanges

A “marketplace” is a physical or electronic setting, including but not limited to a store, booth, Internet website, catalog, or software application where goods or services are offered for sale. A marketplace does not include the digital network of a transportation network company. It is not clear whether the imposition of economic nexus by a local authority is authorized by the U.S. Constitution or the Wayfair decision.  The Constitution only mentions the Federal government and the states and the Supreme Court opined on a state tax.

Nome is the first city in Alaska to enact an economic nexus provision.  But, other cities are interested.  To minimize the challenge due to the non-uniform provisions, the Alaska Municipal League is working on a program similar to the Streamlined Sales Tax Program that would bring all the local taxing authorities into a simplified statewide system.  The goal of this new system would be to have a streamlined system for the Alaska local sales taxes.  The initiative would produce a compact and each local taxing authority would be a signatory to the agreement.  All local taxes would be administered by this new centralized authority which would offer a single portal for licensing, filing returns and reporting.  The Alaska Municipal League hopes to have a draft of the agreement ready by mid-September with a vote at their annual meeting in November.  We will monitor the adoption of this agreement.

Marketplace facilitators are required to collect on behalf of their sellers when they exceed the economic thresholds. Unless the city clerk has received satisfactory evidence that a marketplace seller collected and remitted the required tax, marketplace facilitators are considered the seller for all sales facilitated, brokered, or otherwise conducted on their platform. (Ordinance No. O-19-08-01, City of Nome, Alaska, effective September 1, 2019)

Update: Nome has adopted the Alaska Remote Seller Sales Tax Commission Remote Seller Sales Tax Code, effective March 9, 2020. This adoption means some changes to its previous position on remote seller taxation through its ordinance. Starting March 9, 2020, remote sellers and marketplace facilitators are required to collect and remit local sales tax, provided that the remote seller or marketplace facilitator has met either of the following criteria in the previous calendar year:

  • The remote seller’s statewide gross sales, including the seller’s marketplace facilitator’s statewide gross sales, from the sale(s) of property, products or services delivered into the state meets or exceeds $100,000; or
  • The remote seller, including the seller’s marketplace facilitator, sold property, products, or services delivered into the state in 200 or more separate transactions.

For more details on the Alaska Remote Seller Sales Tax Code and to see which other municipalities have adopted, visit our news item.

Posted on March 26, 2019