The Haines Borough Assembly voted unanimously last week to join the Alaska Remote Seller Sales Tax Commission—a state board established to implement the statewide administration of remote sales tax collection and remittance.

The move comes nearly a year after Amazon announced last January that it would begin collecting and remitting sales tax to Alaska communities, including the Haines Borough’s 5.5 percent sales tax. The announcement caused some confusion about how online retailers such as Amazon would follow the 105 taxing jurisdictions in Alaska. The Alaska Municipal League has since spearheaded the effort to create and establish a common set of definitions that organize equitable collection and remittance of sales tax online.

Haines Borough finance director Jila Stuart will represent Haines on the commission. She said there have already been issues with remote sellers following Haines’ tax code. “They lack mechanisms and infrastructure to know how to apply the taxes correctly,” Stuart said. “They get confused about what rate applies and we don’t believe they understand our exemptions.”

Online retailers’ voluntary decision to charge and remit sales tax in Alaska comes in the wake of a 2018 U.S. Supreme Court decision that eliminated a previous “physical presence requirement” in South Dakota for collecting sales tax.

The court said the administration of remote sales tax should not create an undue burden on retailers. Stuart said she believes Alaska would be an undue burden without centralized administration. “We also suspect, though we don’t know for sure, that after the commission is operating Amazon and other retailers currently collecting will cease to collect sales tax in Alaskan jurisdictions that don’t opt in,” Stuart said.

The AML intergovernmental agreement is voluntary, but municipalities that don’t “sign on are less likely to see remote sellers comply with their individualized tax codes,” an AML letter states.

Each local government still maintains its own tax rate and exemptions. The commission will be a delegated taxing authority. The commission will contract with AML to administer the centralized administration. Costs are still being determined, Stuart said.

Online sellers have remitted about $36,000 in sales tax to the borough from January through June, Stuart said.