Sales Tax Information and Resources for Sellers After Wayfair

Font Size: + -

Feedback Print

Sales Tax Changes After Wayfair

On June 21, 2018 the U.S. Supreme Court ruled in South Dakota v. Wayfair that businesses selling items or services into other states with more than 200 transactions or $100,000 in-state sales can mandate that businesses without a physical presence in a state be required to collect and remit taxes on transactions in the state. The court’s decision acknowledged the unfair advantage over local retailers who were required to collect sales tax and the erosion of sales tax revenues necessary to support local services. Importantly, the decision also ruled that the collection of sales taxes could not place an undue burden on the seller.

Moving Forward in Alaska After Wayfair

As a result of this ruling, many states around the country modified laws requiring remote sellers with significant sales in their state to comply with their sales tax requirements. The State of Alaska does not levy a statewide sales tax, but local municipalities may. Many of Alaska’s municipalities have joined the Alaska Remote Seller Sales Tax Commission (ARSSTC) to facilitate, through adoption of the Remote Sellers Sales Tax Code, a single-level statewide sales tax administration for remote sellers to register, obtain tax rate and exemption requirements, and remit sales tax to the participating municipalities. As the single-level administrator, the ARSSTC will also collect and administer remote sales tax for other taxing jurisdictions throughout the State of Alaska forming a single-level sales tax administrator ensures remote sellers the ability to collect and remit sales tax without undue burden.

The City of Wasilla approved Ordinance Serial No 20-06 February 24, 2020 adopting the Alaska Remote Sellers Sales Tax Code by reference, changing penalty for late sales tax filings and adopting new language defining point of delivery for taxation as it relates to sales, rental and services in the City as well as other definitions to align the two codes. The following items highlight the changes incurred by adopting ARSSTC which become effective April 1, 2020.

New late tax filing fee of $25.00
Reduced penalty for late returns.
Redefined Point of Delivery for taxation of sales, rentals and services
Adopted the Remote Sellers Sales Tax Code by reference
Defined remote and physically present sellers

Adopting the Alaska Remote Sellers Sales Tax Code establishes sales tax requirements on all sales delivered into the City of Wasilla by remote sellers or marketplace facilitators that lack a physical presence in the City. The ARSSTC provides a centralized resource of taxation information, registration, and remittance of sales tax to participating municipalities in the State of Alaska. Additional information, including those taxing jurisdictions that have adopted the Alaska Remote Sellers Sales Tax Code can be found on the Alaska Remote Seller Sales Tax Commission’s (ARSSTC) website www.arsstc.org. Additionally, the City adopted changes to its penalties and definitions in Wasilla Municipal Code (WMC) 5.16 Sales Tax, to align with ARSSTC’s tax code which creates uniformity between remote sellers and local sellers.

What Must I Consider?

There are three primary criteria that each business should first evaluate to determine the local or statewide requirements for sales tax collection and reporting. Those criteria include:

1) Does the business have a physical presence in Wasilla as defined?

A seller has a physical presence in the City if one or more of the following apply and a point of delivery occurs within the city:

1. Has any office, distribution or sales house, warehouse, storefront, or any other place of business within the boundaries of the city.

2. Solicits business or receives orders through any employee, agent, salesman, or other representative within the boundaries of the city.

3. Provides services in the city or holds inventory within the boundaries of the city or the property is located in the city.

4. Rents, sells, or leases property located within the boundaries of the city.

5. Constructs, repairs, renovates, or improves real property if the real property is located in the city.

Activities creating physical presence nexus include:

Seller has people, agents, employees, independent sales representative/consultants soliciting sales inside the City
Seller provides a service inside the City
Seller has store location in City
Seller has a warehouse or leases property inside the City
Seller has rental property located inside the City or delivers rented/leased goods to location inside the City.

2) Does the business engage as a remote seller within Alaska?

Remote seller means a seller or marketplace facilitator making sales of goods or services delivered within the State of Alaska, without having a physical presence in that taxing jurisdiction, or conducting business between taxing jurisdictions, when sales are made by internet, mail order, phone or other remote means.

A marketplace facilitator shall be considered the remote seller for each sale facilitated through its marketplace.

3) If the business engages as a remote seller, does the business meet the threshold criteria under Section 040 of the ARSSTC Tax Code requiring them to register with the ARSSTC and collect/remit sales

Sellers Physical Presence Only

Sellers with a physical presence in the City are required to obtain a business license from the City of Wasilla. The seller must collect and remit sales tax for any taxable sales, services, or rentals with a point of delivery in the City directly to the City. A seller that establishes a physical presence and point of delivery within the City in any calendar year will be deemed to have a physical presence within the City for the following calendar year.

Sellers – Remote Sales Only

Sellers without physical presence that deliver product inside the City of Wasilla and meet the thresholds set out under Section 040 ARSSTC Tax Code, Obligation to Collect Tax – Threshold Criteria as noted above, should register directly with ARSSTC and remit sales tax through them. Tax rates, transaction caps and exemptions for all participating local municipalities can be found on the ARSSTC tax lookup. ARSSTC will remit tax collected from registered businesses to the local participating municipalities.

Sellers without physical presence that deliver product inside the City of Wasilla but do not meet the thresholds set out under Section 040 ARSSTC Tax Code, Obligation to Collect Tax – Threshold Criteria noted above, are not obligated to collect and remit sales tax.

Sellers - Physical Presence & Remote Sales

Sellers that have a physical presence in the City are required to be licensed with the City. The seller must collect and remit sales tax for any taxable sales, services, or rentals with a point of delivery in the City. The remittance for these sales will be filed directly to the City of Wasilla.

Remote sales made within the State of Alaska, to taxing jurisdictions where the seller has no physical presence and meets the threshold requirements under Section 040 ARSSTC Tax Code, Obligation to Collect Tax – Threshold Criteria noted above, would require the business to register with ARSSTC and report sales tax on remote sales only to ARSSTC.

Example: Seller has multiple storefronts in Alaska along with remote sales all over the State. The seller would report sales directly to local taxing jurisdiction at those locations where physical presence exists. Remote sales would be reported through ARSSTC.

Store located in Wasilla- Wasilla store sales reported to Wasilla
Store located in Kenai – Kenai store sales reported to Kenai Peninsula Borough (KPB)
Remote sales shipped to Nome, Juneau, Sitka – Sales reported to ARSSTC
Remote sales shipped to Wasilla or Kenai - Sales reported to Wasilla and KPB along with store sales.

Remote sales made within the State of Alaska, to taxing jurisdictions where the seller has no physical presence but does not meet the threshold requirements under Section 040 ARSSTC Tax Code, Obligation to Collect Tax – Threshold Criteria noted above, would not obligate the seller to collect and remit sales tax on the remote sales only.

Sellers – Remote Sales Outside of Alaska

Businesses that make remote sales to locations outside the State of Alaska may be required to remit sales tax to those jurisdictions in which product or services are delivered. It is the sole responsibility of the seller to comply with the requirements of the applicable taxing jurisdiction. For more information about businesses’ collection responsibilities for other states, see these websites:

Disclaimer: Each website listed is responsible for its own information, and the City of Wasilla is not responsible for maintaining the information provided on these websites.

Frequently Asked Questions

What did the U.S. Supreme Court’s decision in the South Dakota v. Wayfair case say?

South Dakota v. Wayfair is a 2018 U.S. Supreme Court ruling that allows states to require out-of-state businesses without a physical presence to collect and remit tax on sales from transactions in their state based on certain economic and transactional thresholds.

Who is a remote seller?

A remote seller is a seller or marketplace facilitator making sales of goods or services

delivered within the State of Alaska, without having a physical presence in a taxing jurisdiction, or conducting business between taxing jurisdictions, when sales are made by internet, mail order, phone or other remote means. A marketplace facilitator shall be considered the remote seller for each sale facilitated through its marketplace.

What were the highlights of the recent changes to the Sales Tax Code?

New late tax filing fee of $25.00, regardless of taxable balance due.
Reduced maximum penalty for late returns from 25% of the taxable balance due vs 20%.
Redefined Point of Delivery for taxation of sales, rentals and services.
Adopted the Remote Sellers Sales Tax Code by reference.
Defined remote and physically present sellers.

How will these changes to the Sales Tax Code effect purchasers?

Product and services delivered into the City of Wasilla by a remote seller may now include a sales tax charge if the remote seller met the criteria threshold as stated in Section 040 ARSSTC.

In-store purchases at a business located within City limits shall be charged City of Wasilla sales tax regardless of whether the buyer takes possession immediately or has the item delivered to a location outside of the City. In contrast, if the same purchase is made through a remote seller (by phone, internet, fax, etc.), the applicable sales tax is based on the taxing jurisdiction to which the product was delivered.

Are there software services available to help sellers collect and remit sales tax?

Alaska Remote Seller Sales Tax Commission (ARSSTC) was established to provide governance over a streamlined, single-level administration of sales tax collection and remittance for participating Alaskan municipalities. Please contact ARSSTC for registration and assistance.

Assistance with calculating, collecting, preparing returns and remitting the sales tax is available from various private service providers and tax practitioners.

My business is currently licensed with the City of Wasilla and reports sales tax to the City. Do I need to do anything as a result of the new code change?

If you meet the physical presence requirements, you will continue to get licensed and remit sales tax directly to the City of Wasilla.

If you do not meet the physical presence requirements and the business meets the criteria threshold, you should register with the ARSSTC and begin remitting your sales tax through them effective April 1, 2020. When the City receives the business’s first tax remittance from the ARSSTC, the City will close the business license and tax account with the City, if apparent that you do not have a physical presence in the City. All processing and administration questions should be addressed to ARSSTC.

Marketplace facilitator’s meeting threshold requirements are responsible for remitting tax for sales made through their marketplace. Businesses making sales outside a marketplace would be required to register if meeting the threshold requirements of the ARSSTC tax code.

Do these new laws only apply to Internet retailers?

No, the laws are not limited only to internet sales. The laws may apply to a variety of transaction types; commonly it will include sales through the Internet, by mail or telephone order. It may also impact businesses who deliver product into Wasilla such as a furniture store, jeweler, or even a seller in another state making delivery into Wasilla by common carrier.

Who is required to keep and maintain records?

All sellers (including remote sellers registered with ARSSTC and unregistered remote sellers) must maintain complete accounting records and retain those records for at least six years.

As a remote seller, am I required to collect sales tax?

Remote sellers with total statewide gross sales of $100,000 or 200 separate transactions in the preceding calendar year must register with ARSSTC. If you are a remote seller and registered with ARSSTC, you are required to collect sales tax based upon the local taxing jurisdiction to which your product was delivered, or services were performed.

As a remote seller am I responsible for collecting Wasilla sales tax prior to April 1, 2020?

If you did not meet physical presence requirements, no.

If you did meet physical presence requirements prior to April 1, 2020, you are responsible for collecting and remitting the tax. The lookback period is three calendar years plus the current year due upon license and registration of the business with the City.

What is the safe harbor for remote sellers?

Remote sellers without a physical presence in the State of Alaska and whose total statewide sales in the previous calendar year are less than $100,000 or 200 transactions are not required to register with the ARSSTC. You should retain your record of sales in Alaska.

As a remote seller, how do I terminate my Wasilla tax account?

You may contact the City directly at 907.373.9088, or email: salestax@ci.wasilla.ak.us, indicating you have registered with ARSSTC and request the account be closed or upon remittance of the first tax return with the ARSSTC the City will automatically inactivate your local account if the business has no physical presence.

City of Wasilla, AK

Popular Searches