Borough plans sales tax workshops

The Kenai Peninsula Borough administration will explain upcoming changes to the sales tax code through several community meetings.

The borough assembly approved an ordinance with multiple changes to the sales tax code in September, including provisions requiring nonprofits with regular storefronts and vendors who do not accept food stamps but sell food to charge sales tax. The changes are set to go into effect Jan. 1, 2017.

Because of concerns raised by several organizations in the borough, three assembly members proposed an ordinance to delay the effective date to April 1, 2017, but withdrew it at the Nov. 22 assembly meeting. During the finance committee meeting before the regular assembly meeting, the sponsors — assembly members Dale Bagley and Brandii Holmdahl and Assembly President Kelly Cooper — decided to withdraw it because they felt the borough finance department could handle the changes with policies.

For example, one of the questions that came up was whether organizations like church schools, which are nonprofits, would have to charge sales tax on service or housing rentals. The finance department generated a policy determining that educational, tuition and instructional services paid to nonprofits would be tax exempt, according to a policy provided to the assembly.

Borough Finance Director Craig Chapman explained to the committee that the finance department had been getting questions about the changes and was working through some of the unforeseen issues, such as the fact that some convenience stores accept food stamps and others do not, so the borough code needs clarification that convenience stores would be eligible for a tax exemption between Sept. 1 and May 31, the same way stores authorized to participate in the federal food stamp program are.

Cooper said she would prefer to address the changes by policy and make an amendment in the future if there is a recurring issue.

She said she would not want to delay it if the home-rule cities of Seward, Homer, Kenai, Seldovia and Soldotna would begin to implement it themselves after the new year.

“There were so many questions I was being asked that I didn’t have answers to,” Holmdahl said during the committee meetings. “It sounds like (Chapman) has done a really good job of addressing those.”

To explain some of the changes, the borough administration has scheduled meetings at community events and city halls around the borough. The first one is scheduled on Nov. 30 in Soldotna at the borough assembly chambers, followed by a presentation at the Soldotna Chamber of Commerce luncheon on Dec. 6. Another presentation will take place at the North Peninsula Recreation Center in Nikiski on Dec. 1 at 6 p.m., followed by one on Dec. 8 at the Homer City Hall at 6 p.m. In Seward, the presentation will take place Dec. 14 at City Hall at 6 p.m., and in Kenai it will take place Jan. 1 at a Kenai Chamber of Commerce luncheon. The last will take place in Seward on Jan. 27 at the Seward Chamber of Commerce luncheon.

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.

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