Memorandum 19-010 AML Efforts to Conduct Online Sales Tax Administration on Behalf of Municipalities

Memorandum 19-010

TO:                        Mayor Castner and Homer City Council

FROM:                 Katie Koester, City Manager 

DATE:                   January 9, 2019

SUBJECT:          Resolution 19-003

The purpose of this memo is to provide context for Resolution 19-003. The implications of the Wayfair decision regarding online sales tax collection could be far reaching for Alaskan municipalities and the City of Homer has an interest in making sure we understand the potential impacts to our tax revenue. Alaska Municipal League (AML) has formed a working group of Alaskan municipalities with a goal to review, research and discuss outstanding online sales tax questions, and provide a potential pathway for implementation in Alaska that is responsive to municipal interests. Ideally, AML would be able to provide a single point for the collection and distribution of online sales in our communities. In order to research this, they are proposing to hire a consultant and are asking member organization to contribute to this effort. Based on our sales tax revenue, just over $8 million for the 2019 budget which includes the Homer Accelerated Roads and Trail and Homer Accelerated Water Program, this amount would be $4,500. Since the impact of collecting sales tax revenue from online retailers is city wide, I propose this come from the Professional Services line item in the Mayor/Council budget.

Enc:      White paper from AML outlining goals for working group
Letter of request for municipal participation from AML