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 5.18.200-
                                         PERSONAL PROPERTY CODE .INFORMATION 
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