Alaska Remote Seller Sales Tax Commission Approves Remote Seller Sales Tax Code

On January 6, 2020, the Alaska Remote Seller Sales Tax Commission (Commission) passed its “Remote Seller Sales Tax Code & Common Definitions” that would apply to local municipalities in Alaska that choose to adopt it. The code accommodates the individual rates and exemptions of multiple local jurisdictions within Alaska, with single-level, statewide administration. Under the code, 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 purposes of determining whether the above criteria are met, remote sellers or marketplace facilitators should include all gross sales, from all sales of goods, property, products, or services rendered within the state of Alaska. A marketplace facilitator is considered the remote seller for each sale facilitated through its marketplace and shall collect, report, and remit sales tax to the Commission.

In order to simplify the administration of sales tax registration and remittance for remote sellers and marketplace facilitators, the Commission has created an online portal, which can be accessed on the Commission website. An Alaska tax lookup map can also be accessed online.

The City and Borough of Juneau adopted the code, effective February 3, 2020. The Commission expects dozens of additional local governments to adopt the code in the upcoming months. We will be monitoring for additional municipalities that adopt the code. You may also visit the Commission website for information on which municipalities have adopted the code.

If a remote seller or marketplace facilitator meets either of the thresholds above, registration is encouraged immediately. Collection should begin according to the effective date of member municipalities.

In terms of exemptions and rates, the Remote Seller Sales Tax Code presumes that all sales and services by a person or entity engaging in business are subject to the sales tax. The ARSSTC Notice explains that all locally adopted exemptions and rates will apply based on local municipal ordinances.  The Commission website indicates local ordinances are available via the Commission website or that APIs are available to connect to Point of Sale systems.

The Commission has also released a “Remote Seller Registration and Collection Policy” document with additional information. Per the document, registration with the Commission need only be done once by each remote seller. As cities and boroughs adopt the code, collections within those cities may begin. As a city or borough adopts the code, remote sellers not already registered with the Commission are required to register within 30 days for sales into those cities and boroughs. The Commission has established a grace period to help remote sellers comply with their sales tax collection responsibility. The grace period will be available up until the first day of the month that follows the 30-day registration period. For example, if the code is adopted in a city on February 10, 2020, then the 30-day registration period expires March 11, 2020 and the grace period would last from March 11, 2020 to April 1, 2020. (Remote Seller Sales Tax Code & Common Definitions, January 6, 2020; Remote Seller Registration and Collection Policy, February 4, 2020; Notice to Register for Remote/Marketplace Facilitator Sales into Alaska, Alaska Remote Seller Sales Tax Commission; Alaska Remote Seller Sales Tax Commission website)

UPDATE: Seven additional Alaska municipalities have adopted the Remote Seller Sales Tax Code, effective February 24, 2020. The municipalities are:

  • City of Wasilla
  • Kenai Peninsula Borough
  • City of Kenai
  • City of Seldovia
  • City of Homer
  • City of Soldotna
  • City of Seward

See above for information regarding registration requirements for remote sellers making sales into these municipalities.

UPDATE: Five additional Alaska municipalities have adopted the Remote Seller Sales Tax Code, as of March 24, 2020. The municipalities are:

  • City and Borough of Wrangell – Effective March 1, 2020
  • City of Nome – Effective March 9, 2020 (Note that Nome had previously enacted economic nexus provisions independently, effective September 1, 2019)
  • Haines Borough – Effective March 10, 2020
  • City of Adak – Effective March 17, 2020
  • City of Palmer – Effective March 24, 2020

See above for information regarding registration requirements for remote sellers making sales into these municipalities.

Posted on March 26, 2020