Utqiagvik mayor proposes having online sellers collect city taxes, ending vaping tax

Utqiagvik Mayor Asisaun Toovak has proposed having online sellers and booking websites collect city taxes on sales to Utqiagvik. Her proposal would also end the city's tax on vaping products.

The City Council is set to introduce the two ordinances Thursday at its meeting at the Embassy Suites in Anchorage. Public hearings are set for Nov. 19.

Under the first ordinance, Utqiagvik would join the Alaska Remote Seller Sales Tax Commission. The commission collects local taxes from sellers outside the community for its member cities and boroughs. Members keep their own tax rates and exemptions.

The second ordinance sets the rules. Sellers with $100,000 or more in yearly sales into Alaska would collect Utqiagvik's taxes on orders delivered to the city.

Right now, most of those orders would not carry a sales tax. The city's 3% sales tax is paused through June 2031, except on alcohol brought into the city. Remote sellers would also collect the city's 5% hotel tax and its taxes on tobacco and marijuana. The ordinance says it "does not impose any new sales taxes."

The commission's standard rules leave out companies that book rooms and travel, and delivery companies. Utqiagvik's version would require those companies to collect the city's taxes too.

The vaping change would undo part of a decision from last month. In September, the council extended the pause on the city's sales tax through June 2031. It kept taxing alcohol brought into town and vaping products. Alaska News reported on that proposal Sept. 23, before the vote.

The new proposal would remove vaping from that list. Vaping products are not covered by the city's tobacco tax, so they would no longer be taxed.

The pause goes back years. City code, in wording from 2004, says the tax was paused in exchange for a $500,000 payment from the North Slope Borough.

Neither ordinance estimates how much the vaping tax brought in or how much online sales would raise. A report from Finance Director Tina Ortilla on Oct. 14 counts $763,148 in city revenue through September. Taxes on tobacco, alcohol, hotel rooms and marijuana made up $338,736 of that. The report puts the city's fund balance shortfall at almost $1.23 million.

The new tax code lists the marijuana tax at 8%. Utqiagvik voters raised that tax to 10% in the Oct. 6 election, Alaska News reported Oct. 15.