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Snail Mail Sales Tax Snafu

  • Oct 22, 2015 | Gail Cole

 Speed has its advantages.

On October 6, 2015, residents of the Kenai Peninsula Borough, Alaska, voted in favor of Proposition 1, which repeals Ordinance 2008-28.

Created in 2008, the ordinance permits the General Law cities of Homer, Seldovia, and Soldotna to levy a local sales tax on non-prepared foods during the long winter months. Now that it has been repealed, General Law cities must “accept the borough’s sales tax exemption on non-prepared foods through the winter months and forgo the potential sales tax revenue.”

The new tax policy took effect when the proposition was certified on October 13, 2015. This did not give businesses a lot of time to adapt to the change.

To facilitate compliance, the finance director of the bureau sent letters to retailers in Seldovia and Soldotna in late September. Additional letters alerting them of the change were sent on October 9. Retailers were also contacted by phone.

Yet at least one business didn’t learn about the change in time to implement it on the 13th. Early this week, Fred Meyer was still charging sales tax on non-prepared food items. Speaking for the retailer, which is owned by Kroger Co., Melinda Merrill said that “a delay in communications after the proposition passed caused the tax to remain in place.” She continued:

“This was put on the mail on Oct. 9, and didn’t leave Kenai until Oct. 12. “Cincinnati [where the company’s accounting services are located] hasn’t received the letter yet. It says it was to take effect Oct. 14. We’ve corrected it now — the tax is turned off at the Soldotna store.”

The company apologized for the error and said they’ll “do our best to remedy the situation.” Concerned customers are invited to request a refund of any tax incorrectly charged. It will be easy to provide refunds to customers who paid with a credit or debit card or have receipts in hand. However, those who paid with cash and do not have receipts will have to speak with a store manager “to facilitate the refund.”

Additional information about Kenai Peninsula sales tax is available here.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.