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Alaska Man Doesn’t Collect Sales Tax, Defense Found Frivolous

  • Dec 21, 2015 | Gail Cole

 Dillingham, Alaska. Collect sales tax if you're required to.

The Supreme Court of Alaska has determined that a Dillingham man who owns and receives income from apartment units in Dillingham is liable for unpaid municipal sales taxes and utility fees.

Under Dillingham city ordinance, a 6% sales tax must be collected on sales at retail (DMC 04.20.070-080). Sellers in the city are required to “add the applicable tax … to the total selling price and collect the applicable tax from the buyer at the time of the sale…. All sales tax collected or which should have been collected pursuant to this chapter are city monies for which both the seller and the buyer are at all times liable to the city.”

The taxpayer in this case argued that he should not be held liable for the uncollected sales taxes for periods when he did not hold a certificate of authority to collect and remit them. The Supreme Court affirmed the superior court’s ruling that a failure to comply with sales and use tax requirements (such as obtaining a certificate and collecting and remitting tax) does not eliminate the requirement or the taxpayer’s duty “ to comply with the City’s sales tax ordinances.”

In addition to finding in favor of the City of Bingham, the Supreme Court found the taxpayer's argument to be frivolous: “his unlawful conduct in failing to comply with the certification requirements did not eliminate his duty to collect tax.” See Supreme Court No. 1-15706 for more details.

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photo credit: Shore via photopin (license)

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.