Newly Registered 

Businesses 

Helpful Tips Regarding the Sales Tax Code 

           Sales Tax Division Finance 
           Department Kenai 
           Peninsula Borough 
           Soldotna, Alaska 99669 
           salestax@kpb.us Email 
           (907) 714-2175 Office
           1 (800) 478-4441 Toll Free 
                 (within the borough) 

Introduction 

The  Kenai  Peninsula  Borough  Finance  Department  (Department)  is 
responsible  for  educating  and  confirming  compliance  with  the 
Borough’s Sales Tax Code (Code). 

Education 

Written  Material  -  The  Borough  makes  information  available in  order  to 
assist  sellers  in  understanding  their  responsibilities  under  the  KPB  Code. 
This  includes:  KPB  Code  publication;  jurisdictional  calculation  charts; 
return  forms;  notification  of  changes  in  the  KPB  Code;  forms  required  to 
claim  refunds,  to  file  a  protest,  or  to  apply  for  a  resale  or  exempt 
certificate. Found at kpb.us/finance-dept/salestax 

Assisting Sellers - The Staff in the Finance Department are willing and glad 
to  answer  any  of  your  questions  concerning  sales  tax.  This includes 
specific  questions  regarding  the  KPB  Code  or  help  with compilation of 
returns. Please feel free to call upon the Staff if you have questions. 

Confirm Compliance 

Random  Review  of  Borough  Records  -  The  Department  monitors 
significant  account  changes,  delinquent  accounts,  and  changes  in 
industries  to  ensure  all  sellers  are  treated  fairly  according  to  the  KPB 
Code. 

Random Audits - The Department performs audits on sellers to: check the 
correctness of the Borough’s records; determine the accuracy of the  seller’s 
reported  sales  versus  their  bookkeeping  records;  and  to  answer  the 
seller’s questions. 

Confirm  Registration  -  The  Department  investigates  and  assists  in 
registering all sellers conducting business in the Borough. 

Newly Registered Businesses – July 2018                     Page 2 of 6 

Reminders 

As a seller registered to collect sales tax there are a few items you may want to 
keep in mind. 

Agent  -  The  seller  is  acting  as  an  agent  for  the  Borough  by  collecting  and 
remitting  sales  tax  to  the  Borough.  Taxes  collected  from  buyers  are  Borough 
monies. 

Determination  for  Charging  Tax  -  The  seller  is  responsible  for  all  sales  tax 
collected  and  those  taxes  that  should  have  been  collected.  It  is  the 
responsibility of the seller to determine if a sale is exempt or not exempt from sales 
tax.  If  there  is  doubt,  collect  the  sales  tax  and  contact  the  Borough  for  a 
determination. A refund to the buyer is possible. 

Determining  Taxing  Jurisdiction  -  The  taxing  jurisdiction  is  determined  by 
where  the  service  is  performed.  Goods  and  merchandise  are  determined  by 
where the retail outlet is located. Sales of bulk items where delivery is a normal 
and  integral  part  of  the  transaction,  an  exception  to  the  place  of  sale  may 
apply,  so  please  contact  the  sales  tax  department  for  clarification.  If 
there is a question or dispute regarding the place of sale, the Borough  has  sole 
discretion  in  determining  the  location  of  the  taxing jurisdiction, KPB 5.18.450. 

Filing  -  All  sellers  shall  file  sales  tax  returns  on  a  quarterly  basis.  Newly 
registered and delinquent accounts may be required to file on a monthly basis. If 
a seller’s taxable sales for one year are less than $6,000, the  seller may request 
to file on an annual basis. A return MUST be filed every period even if there are 
no transactions conducted, KPB 5.18.500. 

Exemptions  -  The  Borough  Code 
allows  for  several  exemptions  on 
                                                  IT IS THE RESPONSIBILITY OF EACH 
items  and  transactions.  For  more 
                                                  INDIVIDUAL BUSINESS TO KNOW ALL 
information  and  a  complete  list  of 
                                                  REQUIREMENTS UNDER THE SALES TAX AND 
exemption     see KPB                   Code 
                                                  PERSONAL PROPERTY CODE .INFORMATION 
5.18.200-270. 
                                                  ON THE CODE IS AVAILABLE AT THE 
                                                  BOROUGH ,OR ON THE WEBSITE. 

                                                                          WWW.KPB.US 

Newly Registered Businesses – July 2018                                   Page 3 of 6 

Bookkeeping 

The  following  information  is  intended  to  aid  the  seller  in  keeping  and 
maintaining required documents to substantiate sales tax filings in the event  of  a 
Borough audit. 

Determining  Correct  Tax  Liability  -  The  seller’s  accounting  records  and 
federal  tax  returns  are  reviewed  to  determine  if  the  sales  tax  liability 
reported  is  consistent  with  gross  sales.  Therefore  keeping  accurate  and 
complete records is very important. 

Determining Proper Tax Amount - Providing the following information on an 
invoice helps calculate the correct sales tax amount: 

1) Gross sales;

2) Location  of  retail  outlet  for  goods  and  merchandise  or  place  where services 
were performed;

3) Date of sale; and

4) Description of product or service sold.

Non-taxable  Sales  -  Additional  information  should  be  included  on  the 
invoice if nontaxable sales occur: 

1) Name of buyer;

2) Dollar amount of sale made outside the Kenai Peninsula Borough 
   boundaries; 

3) Dollar  amount  of  sale  for  resale,  including  a  description  of  the 
intermediate services along with the resale certificate number of the buyer;

4) Dollar amount  of an exempt  entity along  with  the exempt certificate 
number;

5) Sales made to governmental agencies documented by a copy of the credit 
card imprint, government check, or purchase order; and

6) On individual sales over $500 make sure that you are not including 
more than one sale in the transaction.

Newly Registered Businesses – July 2018                           Page 4 of 6 

Enforcement 

The Staff at the Kenai Peninsula Borough Finance Department are ready to work 
with  sellers.  However,  noncompliance  with  many  sections  of  the  Kenai  Peninsula 
Borough Sales Tax Code may result in penalties, interest, fees, and any other civil or 
criminal remedies allowed by law. 

Common Noncompliance Issues - For a complete explanation of each of the 
categories, review the KPB Sales Tax Code Manual: 

1) Misuse of resale or exempt certificates;

2) Failure to register;

3) Failure to file complete returns or remit taxes; and

4) Failure to keep adequate records.
KPB 5.18.610 - 640.

Assistance  -  The  Borough  Finance  Staff  is  available  to  assist  the  seller  in 
correcting possible misunderstandings. This is accomplished in various ways: 

1) Availability to answer questions;

2) Written notices of noncompliance before action is taken; and

3) Provision for a protest and appeal process.

Enforcement  -  Borough  Ordinances  establish  the  means  for  enforcing 
noncompliance with the KPB Sales Tax Code: 

1) Interest and penalties;

2) Fees for failing to file a return;

3) Civil law suit;

4) Criminal charges;

5) Lien  filed  and  recorded  against  all  real  and  personal  property of  the seller; 
and

6) Reporting delinquencies to a credit reporting agency.

Newly Registered Businesses – July 2018                        Page 5 of 6 

Your Rights 

If  the  seller  disagrees  with  the  Borough’s  final  audit  result, 
estimate  result,  exemption  determination,  or  other  sales  tax 
determination,  the  seller  has  the  right  to  appeal  the  final 
determination to court within 30 days. 

1) If the seller disagrees with the written determination of the 
   Borough Auditor, a protest may be filed with the Finance 
   Director, KPB 5.18.580. The Director will review the methods 
   used,  documents  presented,  and  results  of  the  audit  or 
   estimate. The Director will issue a written decision regarding the 
   validity of the audit or estimate. If the determination involves 
   estimate results, as opposed to audit results, the Borough may 
   require the seller to submit to an audit. If the seller disagrees 
   with the Director’s final written decision, the decision may be 
   appealed within 30 days of distribution to the Superior Court in 
   Kenai, Alaska.

2) If the seller or consumer believes a sale is exempt, either the seller 
   or the buyer may protest taxing the sale by filing a protest 
   with the Borough within 60 days of the date of the sale. The 
   Mayor will issue a written determination regarding the 
   exemption. The seller must continue to collect the tax until  the 
   Borough  issues  a  determination  regarding  the exemption. If 
   the exemption is allowed, the sales tax paid will be remitted to 
   the consumer with the determination. The  determination  may 
   be  appealed  within  30  days  of distribution  to  the  Superior 
   Court  at  Kenai,  Alaska,  KPB 5.18.250.

3) If  a  written  decision  has  been  issued  by  the  Mayor 
   regarding  application  of  the  KPB  Code  to  a  particular 
   factual  situation,  the  decision  may  be  appealed  by  the seller 
   or taxpayer within 30 days of distribution to Superior Court at 
   Kenai, Alaska, KPB 5.18.140(C).

Newly Registered Businesses – July 2018                              Page 6 of 6