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Sales Taxes
The Ketchikan Gateway Borough welcomes and encourages new business activity as well as supports our current businesses. Our dedicated staff is at your service, Monday through Friday, between 9:00 am and 4:30 pm (excluding recognized holidays). You can find us on the first floor of the White Cliff Building, located at 1900 First Avenue.
Sales Tax Forms
Effective January 1, 2024, sales tax forms will not be mailed unless you choose to Opt-In to received a paper form. To opt-in please complete and submit the following form: Sales Tax Form Delivery Method
Delinquent Sales Tax Listings
Delinquent Sales Tax List - Alphabetical (PDF) Opens a New Window.
Delinquent Sales Tax List - By Amount (PDF)
pens a New Window.
- Rates
- Reporting Requirements
- Selling a Business
- Merchant Responsibility
- Failure to Collect
- Valid Exemptions
- Appeal Process
Which Sales Tax Rate Applies?
Use this guide to determine the correct sales tax rate for each sale.
Step 1 — Where did the sale occur?
• Ketchikan Gateway Borough (outside city limits): 2.5%
• City of Saxman: 6.5%
• City of Ketchikan: Continue to Step 2
Step 2 — Is the sale residential rent in the City of Ketchikan?
• Yes: 5.5%
• No: Continue to Step 3
Step 3 — What is the date of the sale?
(City of Ketchikan, non-residential sales)
• April 1 – September 30: 8.0%
• October 1 – March 31: 5.5%
Important
Sales tax rates vary by location, season, and type of transaction. Businesses must apply the correct sales tax rate at the time of sale.
Note: Residential rent within the City of Ketchikan is taxed at 5.5% year-round.
Sales Tax Filing & Recordkeeping Requirements
Under Ketchikan Gateway Borough Code 4.50
Keep this guide with your sales tax records.
Remit sales tax on time
Businesses must timely remit all sales taxes owed, even if a return form or billing is not received.
Not receiving a form or notice does not relieve the obligation to file and pay.
Citation: KGBC 4.50.170
Quick checklist
- Track your filing due dates.
- Remit payment on time, even if you did not receive a reminder.
- Keep proof of filing and payment.
Keep and preserve records (minimum 2 years)
Businesses must keep accurate books and records of all sales and purchases for resale. Required records must be retained for at least two years and made available for inspection upon request.
Citation: KGBC 4.50.180(a)
Examples of records to keep
- Sales journals / POS reports
- Invoices and receipts
- Resale purchase invoices
- Supporting documentation for exemptions and deductions
Allow inspection and investigation
The Borough may examine records, conduct investigations or hearings, and require the production of documents to verify sales tax compliance. Failure to cooperate may result in court-ordered compliance.
Citation: KGBC 4.50.180(b)
What to expect
- Requests to review records and documentation
- Required production of relevant documents
- Possible subpoenas or court orders if noncompliance continues
Estimated or “forced” filings
If accurate records are not maintained, returns are not filed, or records are falsified, the Borough may estimate the tax due based on available information. The estimate may become final unless corrected with proper documentation within the required time period. The Borough may recover its actual costs for preparing an estimated return.
Citation: KGBC 4.50.180(c)
How to avoid forced filings
- File returns on time.
- Maintain complete, accurate records.
- Respond promptly to Borough requests.
Confidentiality and public disclosure
Sales tax returns and return information are generally confidential. However, the Borough may publicly post the name, estimated balance due, and filing/payment status of businesses that do not file and remit taxes within required timeframes. Public posting does not require prior notice and does not relieve tax liability.
Citation: KGBC 4.50.180(d)
Important
Failure to file, maintain records, or cooperate with enforcement actions may result in estimated tax assessments, penalties, public disclosure, and court enforcement.
Sale of a Business – Sales Tax Responsibilities
Under Ketchikan Gateway Borough Code 4.50
This guide outlines required sales tax steps when a business is sold, transferred, leased, or assigned.
File a Final Sales Tax Return
When a business is sold, the seller must file a final sales tax return within five (5) days of the sale.
Citation: KGBC 4.50.220
Provide Advance Notice of Sale
At least 10 days before a sale, lease, assignment, transfer, or other disposition of a business, the seller must notify the Borough in writing.
The notice must include:
- Names and addresses of all parties
- Nature of the transaction
- Effective date of the transaction
Citation: KGBC 4.50.220
Withhold Funds for Unpaid Taxes
The purchaser or successor must withhold enough of the purchase price to cover any unpaid sales taxes, penalties, and interest owed by the seller.
Citation: KGBC 4.50.220
Purchaser Liability
Purchasers, successors, or assigns are personally liable for unpaid sales taxes, penalties, and interest owed by the prior owner, as determined by the final return or a Borough audit conducted within 30 days.
Citation: KGBC 4.50.220
Important
Failure to file a final return or withhold funds may result in the purchaser being held responsible for unpaid sales tax liabilities.
Duty of Seller to Collect Sales Tax
Ketchikan Gateway Borough Code 4.50.070
Sales tax is paid by the buyer, but it is payable to the Borough by the seller, whether or not the seller actually collects it.
Seller responsibilities
- Sellers must collect the full amount of sales tax from the buyer or consumer on each taxable sale, service, or rental.
- Sales tax must be collected at the time of delivery of the property sold or when rentals are collected.
- All sales made within the Borough are presumed taxable unless explicitly exempted by Borough code or ordinance.
Including Tax in the Price
Unlawful for Seller to Fail to Collect – KGBC 4.50.150
A seller may include sales tax in the price of items only if:
- A sign is posted in a prominent location stating:
“Tax Is Included in All Prices”, and - The same wording appears on all receipts that do not separately show sales tax.
If no sign is posted, tax is deemed not included, and sales tax will be calculated on the total receipt amount.
Penalties
A seller who intentionally or recklessly violates this requirement may be liable for civil penalties equal to three times the amount of sales tax not collected, in addition to other penalties.
Filing Sales Tax Returns and Paying Taxes Due
KGBC 4.50.160
Filing requirement
Every seller liable for sales tax must file a sales tax return, prepared under oath, showing:
- Total sales (taxable and nontaxable)
- Amount of tax due
- Any other information required by the Borough
When taxes are due
Quarterly filers
- Taxes are due at the end of each calendar quarter.
- Returns and full payment must be received by 5:00 p.m. on the last day of the month following the quarter.
Monthly filers
- Taxes are due at the end of each month.
- Returns and full payment must be received by 5:00 p.m. on the last day of the following month.
If the due date falls on a weekend or Borough holiday, the deadline moves to the next business day.
Returns may be accepted based on a timely USPS postmark if postmarked on or before the due date.
Filing even when no tax is due
A return must be filed even if no tax is due.
- Businesses with no sales must file a return showing zero sales and stating their intent to continue operating.
- Businesses ceasing operations must file a final return and closure statement.
- Businesses that are sold must file a final return upon sale, with buyer information provided.
Monthly filing requirements for noncompliance
- Sellers may be required to file monthly if compliance issues arise.
- Two consecutive delinquent returns automatically result in monthly filing status until compliance is demonstrated.
Proof of exemptions
Sales tax returns must include satisfactory proof of claimed exemptions.
- Without proof, sales are deemed taxable.
- The burden of establishing an exemption is on the claimant.
Failure to comply
Failure to file or pay timely may result in:
- Recovery of Borough collection costs
- Penalties and interest
- Fines for late or missing returns
Failure to file within:
- 45 days (quarterly filers), or
- 15 days (monthly filers)
constitutes a violation.
Misrepresentation of Sales Tax Exemptions
Exemptions must be legitimate
Sales tax exemptions may only be claimed when the transaction legitimately qualifies under Borough code.
Unlawful misrepresentation
KGBC 4.50.250
Any buyer or consumer who falsely states or misrepresents the use of merchandise or materials to obtain a sales tax exemption commits an unlawful act.
Penalties apply
KGBC 1.25.070
Misrepresentation of a sales tax exemption is subject to penalties upon conviction, as provided under Borough code.
Important
- Buyers are responsible for providing accurate and truthful information when claiming a sales tax exemption.
- Improper exemption claims may result in penalties and enforcement action.
- Sellers remain responsible for collecting and remitting tax unless valid proof of exemption is provided.
Collection Actions for Unpaid Sales Tax
Under Ketchikan Gateway Borough Code 4.50
Unpaid sales tax can result in serious legal consequences, including liens on property and court-ordered actions.
Sales tax liens
If sales tax becomes delinquent, the tax, interest, penalties, and certain administrative costs constitute a lien in favor of the Borough on all real and personal property of the person making taxable sales.
Citation: KGBC 4.50.320(a)
When the lien attaches
The lien arises when payment becomes delinquent and continues until the liability is satisfied.
Citation: KGBC 4.50.320(b)
Recording a lien and lien priority
If delinquent sales taxes (including interest and penalties) are not paid within 10 days after notice and demand, the Borough may record a notice of lien.
Citation: KGBC 4.50.320(c)
Recorded sales tax liens generally have priority over other liens, except:
- Property tax and special assessment liens
- Certain pre-existing perfected liens (amounts actually advanced before recording)
- Certain mechanics’ and materialmen’s liens recorded before the sales tax lien
Citation: KGBC 4.50.320(c)(1)–(3)
Foreclosure and other remedies
A recorded sales tax lien may be foreclosed through legal action, and these remedies are in addition to other collection methods available to the Borough.
Citations: KGBC 4.50.320(d)–(e)
Administrative costs for lien filings and releases
Administrative fees apply for lien actions, plus the recorder’s office filing fee:
- Filing a notice of lien: $25 + recorder’s office filing fee
- Releasing a lien: $25 + recorder’s office filing fee
Citation: KGBC 4.50.320(f)
Cost recovery for correcting returns and account issues
A seller may be responsible for reimbursing the Borough for staff time and costs incurred to correct accounts when costs are $250 or more, including situations involving amended returns or corrections.
Citation: KGBC 4.50.330
Superior court injunctions
After required notice, the Borough may file a proceeding in superior court seeking an injunction to prohibit a business from operating when the business:
- Fails to obtain required initial registration, or
- Fails to file required returns or remit payment
Citation: KGBC 4.50.110(a)–(b)
Important
Overdue sales tax can lead to legal action affecting your property or your ability to operate your business.
KNOW YOUR EXEMPTIONS
Sales Tax Exemptions
This page provides a general summary of sales and services that may be exempt from sales tax under Ketchikan Gateway Borough Code section 4.50.230. Exemptions are subject to specific conditions and limitations. Valid proof of exemption is required at the time of sale, or the sale is taxable.
General and Transaction-Based Exemptions
The following may be exempt from sales tax:
- Retail sales or services totaling less than one hundred twenty-five dollars per calendar quarter
- Casual or isolated sales not made in the regular course of business
- Sales the Borough is prohibited from taxing under federal or state law
- Sales initiated outside the Borough and delivered outside the Borough by mail or common carrier
Insurance, Financial, and Trade-In Exemptions
The following may be exempt from sales tax:
- Sales of insurance and guaranty or fidelity bonds
- Trade-in value credited toward the purchase price of new or used items
Health Care, Funeral, and Veterinary Services
The following may be exempt from sales tax:
- Medical, dental, behavioral health, and other licensed professional health care services and supplies
- Prescription drugs and controlled substances dispensed pursuant to a valid prescription
- Assisted living services provided in licensed facilities
- Hospital services, oxygen, blood, prosthetics, medical devices, hearing aids, crutches, and wheelchairs
- Funeral goods and services
- Veterinary services
Barber, cosmetology, and massage services are not exempt.
Nonprofit and Charitable Organizations
The following may be exempt from sales tax:
- Sales, services, and rentals to qualified nonprofit organizations with a valid Borough exemption certificate
- Approved nonprofit fundraising projects with a Borough-issued exemption permit, subject to permit conditions and limits
Government and Municipal Services
The following may be exempt from sales tax:
- Sales, services, and rentals to the United States government, the State of Alaska, municipalities, political subdivisions, or funded government agencies
- Services provided by the City of Ketchikan or Ketchikan Gateway Borough, except for specified utility, harbor, and port services
Schools, Education, and Child Services
The following may be exempt from sales tax:
- Food sales in school or college cafeterias operated primarily for students or teachers and not for profit
- Food furnished by nonprofit organizations under programs supported wholly or partially by government funds
- Transportation of students to and from grade or high schools
- Educational services provided by nonprofit institutions offering formal instruction for children ages five through eighteen
- Day care services for children
Food Assistance and Public Benefit Programs
The following may be exempt from sales tax:
- Purchases made using food stamps, SNAP, WIC, or other qualifying food assistance vouchers
Media, Memberships, and Special Sales
The following may be exempt from sales tax:
- Sales of newspapers directly to consumers
- Dues or fees paid to nonprofit clubs, labor unions, or fraternal organizations
- Portion of pull-tab sales exceeding the ideal net
Travel, Transportation, and Aviation
The following may be exempt from sales tax:
- Commissions or selling costs for travel or adventure services purchased outside the Borough and not remitted to the service provider
- Aviation fuel delivered directly into aircraft at the airport
- Airfare and air charter charges for transportation of persons
Important Notice
This is a general summary only. All exemptions are subject to specific conditions and limitations set forth in Ketchikan Gateway Borough Code section 4.50.230. Valid proof of exemption is required at the time of sale, or the sale is taxable.
Sales Tax Appeal Process
What to Know and What to Expect
If you dispute a sales tax, penalty, or interest assessed by the Borough, you may have the right to appeal. This summary explains the process in plain language.
Who May File an Appeal
Appeals are limited to Borough errors only, such as:
- Incorrect seller ID
- Clerical or calculation error
- Denial of a sales tax exemption
- Levied and forgiven taxes
Deadline to File
File your appeal within 41 days of the tax due date.
After 41 days, the right to appeal is waived.
How to File an Appeal
Submit your appeal in writing and include:
- Your name, business name, and contact information
- A detailed reason for the appeal
- Supporting documents
- A hearing request (optional)
Payment During the Appeal
- Penalties and interest continue during the appeal process.
- If you overpay and your appeal is granted, overpayments will be refunded with interest.
Hearings and Decisions
- A hearing is optional.
- A decision is issued within 10 days after the hearing (or from the filing date if no hearing is held).
- The Borough Manager makes the final determination.
Common Reasons Appeals Are Denied
- Late filing or payment
- Failure to pay taxes collected
- Errors by the seller
References
KGBC 4.50.290 and KGBC 4.50.300
Sales Tax Appeal Process
What to Know and What to Expect
If you dispute a sales tax, penalty, or interest assessed by the Borough, you may have the right to appeal. This summary explains the process in plain language.
Who May File an Appeal
Appeals are limited to Borough errors only, such as:
- Incorrect seller ID
- Clerical or calculation error
- Denial of a sales tax exemption
- Levied and forgiven taxes
Deadline to File
File your appeal within 41 days of the tax due date.
After 41 days, the right to appeal is waived.
How to File an Appeal
Submit your appeal in writing and include:
- Your name, business name, and contact information
- A detailed reason for the appeal
- Supporting documents
- A hearing request (optional)
Payment During the Appeal
- Penalties and interest continue during the appeal process.
- If you overpay and your appeal is granted, overpayments will be refunded with interest.
Hearings and Decisions
- A hearing is optional.
- A decision is issued within 10 days after the hearing (or from the filing date if no hearing is held).
- The Borough Manager makes the final determination.
Common Reasons Appeals Are Denied
- Late filing or payment
- Failure to pay taxes collected
- Errors by the seller
References
KGBC 4.50.290 and KGBC 4.50.300
Marijuana Sales Tax
A special sales tax of five percent is levied on the retail price of marijuana and marijuana products sold in the borough for retail. Attached is a link to the Borough Code 4.50(b).
Additionally, Ketchikan Gateway Borough collects Marijuana Sales Tax on behalf of the City of Ketchikan. Attached is a link to the City of Ketchikan Municipal Code 3.04.020 (b).