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The tax levied under this chapter shall not apply to the following:

1. Casual and isolated sales not made in the regular course of business;

2. Sales, services, rentals, and transactions that a municipality is prohibited from taxing under the Constitution and laws of the United States or the state;

3. Sales of goods resulting from orders received from outside the borough where delivery is made outside the borough by mail or common carrier;

4. Sales of construction materials and services exceeding $5,000 for use in each construction project paid for by any one purchaser during any 12-consecutive-month period. Construction materials are defined as those items becoming a permanent part of the structure.

Purchaser must initially pay all sales tax on such materials and services. At the end of the 12-month time period and within one year thereafter, purchaser must submit a completed sales tax refund form (provided by the borough office) along with qualifying receipts. The borough will review and refund to the purchaser all sales taxes paid on allowable construction materials and services that exceeded $5,000 during the 12-month period.

If the project is not complete within the 12-month period, the purchaser may apply for an extension of the exemption by signing an affidavit that the purchaser is continuing work on the same project. A total of two 12-month extensions may be applied for with respect to the same project. The refund procedure shall follow the same requirements as the first 12-month period. The total time period for sales tax refunds on any one project shall not exceed three years.

The project shall be reviewed and assessed yearly by the borough assessor.

The contractor may come to the borough office and pay a sum equal to the appropriate sales tax on a $5,000 purchase. The contractor will then be issued a numbered sales tax exemption permit which will exempt the purchaser from paying sales tax on the purchase of construction materials and services on the particular project named for a 12-month period. The permit number must be shown to all vendors by the purchaser on all purchases covered by this subsection and be recorded on all sales tickets at the time of purchase of materials or services by the vendor;

5. Sales of insurance and bonds of guaranty and fidelity, and the commissions thereon;

6. Sale of transportation to students to and from grade or high schools in motor or other vehicles;

7. Sales of goods, services, and rentals by school-sanctioned groups;

8. Sale of cemetery plots, caskets, funeral and burial-related items and services by a funeral home;

9. Sale of goods and services performed in the course of and necessary in the treatment by medical doctors, hospitals, dentists, optometrists, osteopaths, midwives, birth centers, chiropractors, and other medical practitioners licensed or certified by the state of Alaska, and the sale of goods and services performed pursuant to a prescription or written order from one of the above;

10. Sale of nursing services and of counseling by clinical psychologists licensed by the state of Alaska;

11. Sales and rentals of hearing aids, crutches, wheelchairs and personal property specifically manufactured for a patient;

12. Membership dues and assessments, initiation fees and donations paid to labor unions, fraternal organizations and other nonprofit organizations that have obtained exemption certificate 501(c) from the Internal Revenue Service;

13. Sales, services, and rentals to a buyer or made by a seller, organized and administered solely by the exempt organization that meets the following qualifications:

a. Has obtained exemption certificate 501(c)3, 501(c)4, 501(c)8, or 501(c)19 from the Internal Revenue Service;

b. Is currently incorporated by the state of Alaska as a nonprofit corporation;

c. Has purchased an annual exemption card (which card shall be purchased for the annual cost equivalent to the townsite service area sales tax levied on a total of $500.00 in purchases) issued by the borough clerk.

This exemption applies to sellers only if the income from the exempt sale is exempt from federal income taxation;

14. Sales, services and rentals to or by a foreign government, the United States government, the state and its political subdivisions, and municipalities;

15. Sale of goods and beverages in public or private common high school or college cafeterias, not operating for profit;

16. Child day care, pre-elementary-school and babysitting services;

17. That part of the selling price of a single item that exceeds $10,000. A single item is an item sold in a single sale consisting of integrated and interdependent component parts affixed or fitted to one another in such a manner as to produce a functional whole. It includes optional accessories for such items as boats and automobiles if the accessories are useful or essential for the operation or use of the item;

18. That part of the selling price of services performed that exceeds $5,000 for a single service which is an interrelated and interdependent function;

19. That part of the periodic rental price exceeding $5,000 of the rental of a single item of personal property. The periodic rental price is the amount owed on a monthly or more frequent period; rentals exceeding a payment period of one month recomputed for sales tax purposes as though payment were to be made on a monthly basis;

20. Commissions charged on the sale of travel, lodging, adventure and similar and related services;

21. Sales and services by banks, savings and loan associations, credit unions and investment banks;

22. Printing services resulting from orders received from outside the borough where delivery of the printed material is made to the nonresident purchaser outside the borough by mail or common carrier;

23. Fees charged for nonprofit youth day, recreation, summer and similar camps primarily serving persons under 18 years of age;

24. All single item sales, rentals, and services under $500.00, occurring during the hours, under the auspices and in direct participation with the annual Southeast Alaska State Fair, excluding any businesses in the Dalton City attraction who have a rental agreement with the S.E. Alaska State Fair to operate their businesses within the confines of the Dalton City attraction at times other than during the S.E. State Fair;

25. Trade-in sales; the value of new or used articles taken in trade as a credit on part payments on the sale of new articles shall be deductible from the total sales price of the new article, and a tax paid only on the net sales price;

26. Purchases made with food stamp coupons;

27. Water and sewer services;

28. Sales between related parties as defined in Internal Revenue Code Section 267(b);

29. Sales of Services for Resale. A service is sold for resale when the service is directly integrated into services or goods sold by the buyer located within the borough and registered with the sales tax administrator, to another purchaser in the normal course of business; provided, that the service is purchased separately for each resale, and the service is identified, charged for and billed for separately from any other service. This exemption does not apply to sales of tours to buyers for resale to the ultimate consumers of the tours, nor does any sale of services on consignment or commission qualify for exemption;

30. Sales of goods and services provided under a warranty or service contract, whether performed by the manufacturer or authorized representative of the manufacturer, and charged to third party warrantor for repairs, major maintenance, or both. Major maintenance does not include routine or scheduled maintenance attributable to normal operation of the warranted item;

31. Sales tax paid on leases under a lease/purchase agreement may be credited toward the payment of the tax due on the exercise of the purchase option in the same proportion as the lease payments are applied to the purchase price; provided, that there will be no refund of taxes paid on the lease;

32. Sales of any goods or services within the borough that are temporarily exempted by a resolution adopted by the assembly and sold during the specified exemption period not to exceed six consecutive months;

33. Long-term rental of a dwelling, home, apartment or condominium used as a residence. (Ord. 18-07-500 § 6; Ord. 17-07-463 § 4; Ord. 05-09-123; Ord. 05-01-095; Ord. 04-07-073)