Sitka’s senior sales tax exemption is back in place – but with a key difference. City officials want to implement a new system for determining eligibility.
The previous system for keeping track of the senior sales tax exemption was somewhat loose. The city issued cards with ID numbers to those 65 years and older. Retailers invited senior shoppers to show that card or write their ID number on a log sheet. Some retailers applied the tax based on the honor system alone. However, not everyone who sought the tax break was eligible.
The potential for fraud was on the Assembly’s radar when they decided to eliminate the tax exemption this spring. “The current exemption as it exists is misused quite often,” said Assembly member Kevin Knox during the April 24th Assembly meeting. “We heard from a number of different businesses through e-mail and I have spoken to quite a few of them too who said they do no want to police this.”
The Assembly voted to remove the tax exemption at that meeting. Citizens voted to reinstate it at the municipal election two weeks ago. The low-income rebate program, which would have begun seeking applicants in 2019, was eliminated.
But in bringing the program back, the city is now telling retailers to check the age on a shopper’s Alaska-issued ID before applying the tax.
Not everyone is happy with the policy. Senior citizen Ann Bills told the Sitka Assembly this week (10-09-18) that she disapproved of this new way of doing business. “The system was working fine. I don’t why you think you can’t go back to the system because that’s what we voted for,” Bills said.
Max Rule, Chief Operating Officer with the Hames Corporation – which operates two grocery stores in town – told the Assembly the ID requirement placed an added burden on checkers. He was quoted by the Sitka Sentinel as saying, “I’m concerned customers will be frustrated with the process and will take their anger out on young employees.”
During a segment of “Ask the Administrator” on KCAW this morning (10-12-18), city administrator Keith Brady acknowledged the concerns. He added that while the law is back, the city is putting its foot down on how its implemented.
“Right now, for this quarter of the year, if they [senior citizens] want to have tax-exempt status for their utilities, property tax, sales tax, we’re asking they show an Alaska government-issued ID while we work on another program. The old program is done. It’s gone,” Brady said.
Brady said one idea is a tag with a bar code that attaches to a key ring. He hopes the city will unveil its new program on January 1st, 2019. Those with additional questions can email Brady at administration@cityofsitka.org
