M E M O R A N D U M  05-02

TO:           MAYOR HORNADAY AND HOMER CITY COUNCIL 

FROM:      COUNCILMAN DOUG STARK 

DATE:        10 JANUARY 2005 COUNCIL MEETING 

SUBJECT:  SALES TAX COLLECTION BY NON-PROFITS  

As you know, not-for-profit organizations are not required to pay property tax or collect sales tax.  However, they can do so on a voluntary basis, and in fact the Pratt Museum's gift shop does collect and remit sales tax. Although there is an administrative burden in doing so, the tax is paid by the customer. Sometimes the store chooses to include it in the sale price in order to round off the sale price. The collection and remitting of sales tax by not-for-profit organizations would tend to level the playing field with private organizations which compete with non-profits and must collect and remit sales tax. Probably the best way to approach this issue, if the Council agrees, is for the City Manager's staff to contact non-profits to determine their willingness to collect sales tax.  

RECOMMENDATION:

Approve the above proposal.  

Fiscal Note: some staff time