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Date Posted: 04:08:10 04/28/04 Wed
Author: Don Johnson
Subject: tax charter fishing businesses on a daily, per-passenger basis.

Kenai considers charter tax hike

> Anchorage Daily News
>
> Kenai considers charter tax hike
> FISHING: Plan would eliminate advantage of a group package.
>
>
> The Associated Press
(Published: November 15, 2002)

The Kenai Peninsula Borough Assembly is considering a plan to tax charter fishing businesses on a daily, per-passenger basis.

The plan would eliminate certain tax advantages of selling charter packages
to groups.

Charter fishing businesses voiced their opposition last week when borough
Assembly members met in Homer to take public comment on 15 new sales tax
proposals.

With a borough tax cap of $500 now in place, groups pay a maximum of $27.50
in tax on the first $500 of the purchase price. If charter tickets must be
taxed individually, per person, the tax amount could escalate to hundreds of
dollars for large groups on large boats.

"I would have you remember that failed businesses do not pay sales tax,"
said Leah Jenkin with Seaflight Sportfishing Charters, who along with other
charter operators feels the proposal is inequitable and is intended "just to
bleed more sales tax revenue," the Homer Tribune reported.

In 2001, recreational sales taxes, coming mostly from charter fishing sales,
accounted for $390,321 in boroughwide revenues. For a single city, Homer
accounted for the majority of this, with $72,322 being garnered in taxes.

Seward, which also has a large charter market, brought in the next highest
amount, $64,363. Anchor Point, Ninilchik and all other unincorporated areas
accounted for $227,542 combined.

Borough Sales Tax Committee members realize that the per person, per day
plan would increase revenues, but they say it would bring equity among other
sectors of the economy.

"I'm feeling a little out of the loop," said Derotha Ferraro, director of
the Homer Chamber of Commerce. "Equity means equal. Equal to what else?"

Ferraro says charters may feel penalized unless it is made clear where any
existing inequities are in place that would merit their clients being taxed
more.

"We don't know what we are currently not equal to," Ferraro said.

Maryann Rowe, with the chamber's legislative committee, said the additional
taxes "could bear some severe effects on our members and our derbies." The
annual Homer Jackpot Halibut Derby is the chamber's largest fund-raising
event.

In terms of inequities, Homer Charter Association secretary Bob Ward
compared the plan to mandating that restaurant customers be charged and
taxed per person, per meal as well as lodging guests being taxed per person
rather than per room. He said that rental car agencies do not tax per person
but rather for the entire car. Ward further illustrated his point in saying
that a dump truck is taxed per service transaction, not for every individual
yard of gravel that it hauls.

"It seems like the recreational users on the Kenai Peninsula are being
singled out for a huge price increase," resident Gary Ault said.

Sales tax committee member Chris Moss asked residents whether they thought
it would be better to just raise the tax cap across the board, on every
retail and service sector. The $500 cap was instituted in the 1960s, and by
today's standards, Moss said, that would equal about $2,000.

"I think it's equitable. I don't think it's called for at this time," Ault
said of the raised tax cap. "I think a seasonal sales tax is more
equitable."



========================
Just received from ATIA

----- Original Message -----
From: "Mark Miller"
To:
Sent: Friday, November 15, 2002 4:31 PM
Subject: Kenai Charter Boat Tax Hike


> To:
> Gary and/or Barbara Ault Inlet Charters
>
> also sent to
>
> Leah Jenkin, Sea Flite Charters
> Derothra Ferraro, Homer Chamber of Commerce
>

Subject: Kenai Charter Boat Tax Hike
>
> I read the Anchorage Daily News today and it was he first time I had
heard
the Kenai Peninsula Borough was considering a change in its formula to tax
charter boat operators. As all three entities identified in the article
are
ATIA members (all you three addressed in this e-mail), I am sending this
e-mail requesting your insight and input into what you might see ATIA
doing
to help your cause of minimizing costs for the charter fishing industry in
the area. Note that Bob Ward, Homer Charter Association is also an ATIA
member but I do not have an e-mail for him at this time but will contact
him
by phone on Monday.

Please feel free to comment by e-mail or contact me with information
provided after my signature line. The next full Board of Director's
meting
is December 4 and if this issue is to be pursued, I will need to take it
first to the Sportsfishing Workgroup subcommittee of the full board. So
the
sooner you can contact me after my return to the office Monday, November
18th the better. If you know other ATIA members that are also interested
in
this issue in your area, please let me know their names as well.

Mark Miller
Tourism Planner
Alaska Travel Industry Association (ATIA)
2600 Cordova Street, Suite 201
Anchorage, Alaska 99503-2745
Telephone: 907-646-3310
Fax: 907-561-5727
E-Mail mmiller@alaskatia.org



=======================

From Peninsula Clarion in august 2002

Web posted Tuesday, August 20, 2002
Borough sales tax code under review; recommendations expected later this
year
A matter of dollars and sense

By HAL SPENCE
Peninsula Clarion
A borough committee is weighing a list of proposed changes to the Kenai
Peninsula Borough's sales tax code that are meant to level the sales tax
field for businesses, make application of the code more efficient and, in
some cases, eliminate exemptions.

Some changes would have no impact at all on revenues, out others could mean
significantly more money for the borough and its cities.

The borough's Sales Tax Review Committee, which is comprised of members of
the Kenai Peninsula Borough Assembly and members of the administrative
staff, have been working on revisions to the code for several months. They
are expected to make code revision recommendations to the full assembly
sometime later this year.

Among the changes currently under discussion is one that would begin taxing
certain nonprofit organizations that compete directly against for-profit
operations.

Jeff Sinz, borough finance director, said an example is daycare facilities
organized under federal tax laws as nonprofit (501c) agencies that now enjoy
a competitive advantage over for-profit daycare operations because, under
borough law, their nonprofit status exempts them from the borough's
2-percent sales tax. The committee is considering whether that advantage
should be eliminated.

The code revision would redefine exemptions as those transactions that are
part of "a casual and isolated fund-raising activity preregistered and
approved by the borough administration." The borough would have the
flexibility to consider granting an exemption on a case-by-case basis.

An example of a fund-raising effort that is not a target of the proposed
code change is the selling of cookies by the Girls Scouts. That nonprofit
would not be required to collect and remit sales tax, Sinz said.

"We think we have come up with some language that strikes a balance there
and gets at what we want to get at without getting at organizations we
aren't really trying to impact," Sinz said.

Another change being looked at is a proposal to increase the maximum amount
on which the borough's 2-percent sales tax can be applied. Currently, the
tax applies only to the first $500 of the purchase price of goods or
services. That means someone buying a $20,000 automobile pays no more sales
tax than someone purchasing a $500 washer and dryer. Likewise, someone
paying $2,000 for the services of a house painter pays only on the first
$500, the same as someone buying only $500 worth of services.

The committee is considering raising that limit to $2,000, but applying it
only to services, not to goods, which would remain at the $500 maximum.

If adopted, the new $2,000 tax limit for services would increase sales tax
revenue across the borough, and especially in Homer and Seward in the
recreational sales arena, the committee said. Oil companies and others
receiving a large amount of services within the borough would pay more sales
tax. Borough finance figures predict the borough could collect nearly $1.1
million more, while the cities together could see another $703,000.

The committee already has approved several possible changes to the sales tax
code. If eventually approved by the full assembly, they would include the
following:

* Exempt all state licensed medical and psychological service providers
and the prescriptions they write. This change allows the borough to
recognize professions newly licensed by the state. Currently, the borough
has no way to broaden the field of medical practices it already recognizes.
There would be no revenue impact.
* Exempt services performed under warranties and service agreements.

Currently, service providers often are unable to collect sales taxes from
customers getting work done under manufacturers' warranties, nor get the
manufacturers to reimburse them for the sales taxes service providers must
remit to the borough. The warranty issuers have argued that the original
sales price included a charge to cover anticipated warranty work, and thus a
sales tax already has been applied. No revenue impact is expected, the
committee said.

* Allow lodging and meals to be eligible for treatment as resale
transactions and exempt them from the sales tax. The change would simplify
some transactions under the code, the committee said. The change also would
remove reference to an "Intermediate Service Certificate," which the borough
does not use.

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