----- Original Message -----
From: ccpwow
Cc: gsuperman@gci.net ; rlms@ptialaska.net ; millimom@xyz.net ; akjfischer@hotmail.com ; debgermano@acsalaska.net ; merkes2@yahoo.com ; psprague@acsalaska.net ; mbgilman@gci.net ; pa12gary@hotmail.com
Sent: Monday, January 15, 2007 8:13 PM
Subject: Ordinance 2006-41
Dear Kenai Peninsula Borough Assembly Members, 01/15/07
I am writing you regarding your agenda for the your January 16, 2007 assembly meeting.
My letter references your Ordinance 2006-41 which appears to attempt to implement
this discriminatory [per person/per day, "pp/pd"] form of taxation retroactively from Jan. 1, 2007.
I have been operating within our KPB recreational industry now for 25 years.
I currently conduct all of the following sales activities: retail sporting goods, charter boat fishing,
fly-out fishing and sightseeing. I also subcontract these activities to other local service providers.
I am having a very large problem understanding how this 2006-41 sale tax calculation is to function.
It sounds very simple to just stamp the pp/pd concept into the tax code but I can assure you
that pounding it into reality is not as simple as you may have been led to believe.
I have personally written two separate letters to our KPB Sale Tax Dept. since Oct. 2006.
My letters requested clarification regarding different pp/pd tax calculation scenarios.
As of today I have received zero responses from Sales Tax regarding my questions.
The pp/pd sales tax scenarios I presented the Sales Tax Dept. regarded various everyday
transaction events which I have been dealing with for many years.
The topics ranged from,
A.] What about parties reserving an entire boat without being able to define the total final
number of persons who will be in their party?
B.] What about sales items which could be used for either recreational or business purposes?
C.] What about persons who purchase business items and recreational items simultaneously
within the same package or at the same time?
A.] Reserving an entire boat?
I just had a party call today which requested to reserve all the seats on a boat but could
not tell me with any certainty as to how many persons would really be coming to fish in the end.
When asked why, they just responded that some of their friends say they will go now but back out later.
Normally I would just charge the $25 max. tax cap and that would be the end of it no matter who
showed up. Am I supposed to just "pp/pd" over tax this group and hope I am correct?
Do I only "pp/pd" tax the guy who called and then have the KPB come after me for not
taxing them enough? Or maybe the KPB is just expecting me to figure the tax now and then refigure
it again later?
Regardless as to what the KPB would prefer, I can assure you that the entire KPB will be
doing whatever they can dream up.
B.] Recreational or business purposes?
I just purchased a new digital camera for $149.31 from Fred Meyers.
Would this be considered a recreational sale or maybe just a regular business sale?
I guess you would have to determine what I planned to use the camera for...
Maybe the KPB could hire a recreational police force to come knocking on my
door in a year or so and ask to see my pictures. After confiscating my pictures they
could then submit them to a Recreational Enforcement Board to determine the
true "recreational / business" tax intent of my camera purchase?
C.] Recreational and nonrecreational goods simultaneously purchase?
There are many businesses within the KPB who sell recreational and nonrecreational goods.
Is the KPB expecting all retail businesses to reconfigure their cash registers or purchase
new registers which are capable of assigning a special tax code to only recreational goods?
This is the only way I can think of to allow customers to purchase both recreational and
nonrecreational goods at the same time. If the business does not have an electronic method
to track these combo sales, how are they to record taxing these sales?
If the business does not have electronic means to track these sales they would be force to
manually list each type of sale individually and then calculate the category totals at the end.
Have you addressed how much additional effort this will require and if it is even practical?
I may be able to imagine implementing this type of a tax change by 1/1/08 but not
retroactively to 1/1/07, that would be outrageous.
The KPB Sales Tax Dept. has not even begun to respond to the questions on this issue and
you are expecting the public to have already been collecting this new tax since 1/1/07?
I don't know if you are aware of it but our recreational industry has been selling 2007 services
since Oct. 2006 and has collected substantial deposits on 2007 services before 1/1/07.
The pricing on these services has been fixed in writing for months in many cases and you are expecting
these businesses to again contact their clients and inform them that there is a slight billing problem?
You are expecting these businesses to reprint all their 2007 brochures and paperwork?
You are expecting these businesses to go in and now upgrade their websites?
You are expecting these businesses to just rebill each of these clients or just absorb the
additional tax costs themselves?
I see very few good choices coming from this aggressive attempt to jam a square peg into a round.
I could understand the attempt if this were a simple subject which could be turned on or off like
a light switch. Your pp/pd recreational tax will project many wrinkles into a tax fabric which has
taken decades to straighten out. It is a lie to assume that these wrinkles were historically all figured
out on 01/01/07 and everyone is fully aware of that fact.
To assume that they were figured out by 10/01/06 is completely irrational.
I am requesting that the Assembly see the pp/pd tax issue from the public's perspective.
Right now the KPB is unable to fully explain this issue to the public.
How can the KPB realistically expect the public to understand what it does not understand?
I am requesting that you not support Ordinance 2006-41.
Thank you for taking the time to read my concerns about Ordinance 2006-41.
Don Johnson
ccpwow@gci.net
Soldotna, Alaska