A timber company based in Haines Junction, Y.T., is ceasing sales in Haines following a dispute with the Haines Borough.

Dimok Timber office manager Dorothy Clunies-Ross said the company will stop delivering wood to Haines because the borough is demanding Dimok pay sales tax and obtain a business license.

“We’ve been delivering wood to Haines for years and we’ve never been asked to do this before,” Clunies-Ross said. “The interpretation of their rules doesn’t seem to be correct to us so we’re just not willing to comply.”

When asked to elaborate on how the borough is misinterpreting code, Clunies-Ross deferred to her husband, John Clunies-Ross, who didn’t return calls for comment.

Sales tax clerk Jessie Badger said she has been trying to contact the business owner for more than two years regarding his failure to pay sales tax. “He’s been contacted two or three times and he just tends to ignore it,” she said.

In her most recent letter, dated May 23, Badger told John Clunies-Ross she would begin collections procedures on the back sales taxes. The borough can collect up to six years of back taxes.

“The main complaint is that he is competing with other wood sellers in the area and they are very good taxpayers and he’s not paying his part,” Badger said. “If we didn’t pursue it, we would be treating him special.”

According to code, “the delivery of property in the borough by seller whose principal place of business is outside the borough to a buyer or consumer is a retail sale made within the borough is such retailer maintains any office, distribution or sales house, warehouse or any other place of business, or solicits business or receives orders through any agent, salesperson or other type of representation within the borough.”

Badger said at first she was struggling to establish “nexus,” a legal term that refers to a requirement for companies doing business in another state or city to collect and pay sales tax in that city or state.

When Dimok started placing ads in the classifieds section of the local newspaper, Badger had her proof the company was regularly selling firewood in Haines.

“At first I couldn’t prove he was in the area, but once he advertised, then that’s my proof of nexus,” she said.

Resident Steve Virg-In learned of the borough’s crackdown on Dimok and sent a letter to assembly members asking them to rectify the situation.

“We find ourselves no longer able to purchase this wood because of what appears to be an overzealous approach to try and collect more taxes for the borough through a major misinterpretation of borough code,” Virg-In wrote. “Why now? Dimok Timber has been providing dry wood to this community for years. Is there a person or political bent behind all of this?”

Virgin-In, who worked as a heating contractor for 20 years, said the beetle-kill white spruce firewood provided by Dimok has a lower moisture content – between 6 and 9 percent – than the “wet spruce and hemlock provided by the firewood sellers in this borough.”

“The firewood provided in this region is commonly 50 percent moisture content,” Virg-In said. “The other issue is that if wood is 50 percent moisture content, it takes 50 percent of the heat produced to dry as it burns. That is an incredible waste of energy.”

In a June 11 email Clunies-Ross sent to Virg-In, Clunies-Ross balked at the borough’s argument about the classified ad in the newspaper, claiming that if the borough’s interpretation of code were correct, every private citizen selling items through the classified section would have to obtain a business license and pay sales tax.

(That isn’t true, said chief fiscal officer Jila Stuart. Casual or isolated sales are an enumerated exception, she said.)

“It is a senseless argument that I want nothing to do with,” Clunies-Ross wrote. “I have had years working through similar attitudes in parts of the Canadian bureaucracy and have no interest in starting again in another country.”

“We remain willing to meet all the requirements of U.S. law and have appreciated the opportunity to provide our services there. We have appreciated the professionalism of the U.S. Customs services and have been able to meet their requirements on an ongoing basis,” he added.

According to the U.S. Customs and Border Protection website, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) regulates the importation of wood and wood products.

APHIS requires wood and wood products to undergo certain phytosanitary procedures prior to importation in order to eliminate the risk of introducing non-native pests and diseases into the United States.

According to the site:

“All hardwood firewood must be accompanied by a treatment certificate or an attached commercial treatment label declaring that the firewood was heat treated at 60 C (minimal core temperature) for 60 minutes and an inspection free from pest.

“Softwood (such as spruce, pine, fir, etc.) firewood (non-commercial) must be accompanied by a treatment certificate or attached commercial treatment label declaring that the firewood was heat treated at 56 C (minimal core temperature) for 30 minutes and an inspection free from pest.”

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