(SitNews) Ketchikan, Alaska - The Ketchikan Gateway Borough conducted a "till tap" today at Gold Rush, a downtown jewelry story, to collect past-due sales taxes levied by the Borough and the City of Ketchikan. According to Ketchikan Borough Finance Director Mike Houts, the writ here is in conjunction with an outstanding unpaid judgment against Gold Rush for alleged unpaid sales taxes. The Ketchikan Borough previously used a writ of execution last month to obtain funds from bank accounts of Gold Rush which resulted in recovery of more than $700. The results of today's "till tap" were not released.

A till tap is the common term used to refer to one of several methods by which a writ of execution of a judgment may be executed. Other examples may be bank sweeps, where funds are removed from a debtor's bank accounts, or execution on permanent fund dividends, where the debtor's permanent fund dividend is taken for the benefit of the creditor.

Houts said the judgment on Gold Rush stems from unpaid sales taxes from 2010. In 2010, Gold Rush owed more than $26,700 in sales taxes, penalties and interest. While Gold Rush made some payments, the merchant failed to comply with the time payment agreement and a judgment was obtained for $14,863.97 plus ongoing interest.

The funds obtained from the till tap, which represent sales tax payments from customers which are relied upon to fund the City of Ketchikan and Ketchikan Borough services, will be deposited with the court, and after offering Gold Rush the opportunity to claim any exemptions fro execution, will eventually be released to the Ketchikan Borough and provided to the City and the Borough to pay for education and other public services said Houts.

The June 13th till tap at Gold Rush is part of stepped up efforts on the part of the Ketchikan Borough regarding sales tax collections said Houts. In another ongoing unidentified case, the Borough issued multiple citations in connection with a sales tax audit of another local business. In addition to obtaining judgments and execution writs, the Borough has added other enforcement tools in the past year which include the ability to issue citations for failing to file returns within 45 days or the date they were due, and seeing a court order closing a business for failure to file a return or for filing a return and failing to remit payment after being directed to do so.

Houts said in a news release, all local merchants are required to collect sales tax on all taxable sales within the Borough, and to file regular sales tax returns and remit the taxes collected. When a merchant fails to file a return, the Borough is authorized to estimate the sales, and can collect the appropriate sales tax amount from the merchant. If a merchant fails to pay, or if a merchant files a return and fails to remit the taxes they have collected from customers, the Borough goes through several steps before it comes to the point of forcibly removing funds from the merchant's bank accounts or business premises.

The normal collection process begins with a letter to the merchant said Houts. If it is the first delinquency, the Borough routinely offers a merchant the opportunity to enter into a time payment agreement to bring the account current over time. If the merchant does not cooperate, or fails to make the payments, the Borough obtains a judgment for the debt. Once a judgment is obtained, the borough executes on the judgment through one of more writs of execution.

Under State law, the Borough is responsible for collection of its own sales taxes as well as those levied by the City of Ketchikan and the City of Saxman.

According to Houts, local sales taxes fund essential public facilities and services including the Ketchikan Hospital, schools, the Recreation/Aquatic Center, and grants to local non-profit corporations. Additionally Houts said, sales taxes, which are the greatest source of local revenue for the City of Ketchikan and the Borough, serve to keep property taxes lower.

Ketchikan area businesses perform a valuable service to the three Ketchikan area local governments by collecting and remitting sales taxes said Houts. While businesses are not compensated directly for that service, those businesses and other property owners in Ketchikan enjoy the benefit of more than two hundred ten million dollars ($210,000,000) in optional property tax exemptions enacted by the Ketchikan Assembly said Houts.

According to Houts, at rates in effect at the time of the adoption of these policies, those exemptions saved property taxpayers more than one million two hundred thousand dollars ($1,200,000) in borough areawide property taxes alone on an annual basis, and many thousand of additional dollars with respect to borough nonareawide levies and borough service area levies. Optional exemptions approved by the City of Ketchikan City Council save taxpayers within the boundaries of the city roughly an additional one million dollars (1,000,000) annually said Houts.

Approximately 2,500 businesses are registered to collect sales taxes within the Ketchikan Borough with 94% of those businesses complying with the sales tax ordinances of the City of Ketchikan and the Ketchikan Borough.

Edited by Mary Kauffman, SitNews

On the Web:

KGB's Most Current Report of Businesses Listed As Not In Compliance With Borough Sale Tax for Quarter Ending 12/31/12
http://www.borough.ketchikan.ak.us/finance/documents/
DelinquentPublicationListingDec2012.pdf

Source of News: 

Ketchikan Gateway Borough
www.borough.ketchikan.ak.us

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