In the last calendar year, the Haines Borough pulled in just over $470,000 in sales tax from purchases made online, by phone, or mail delivered to households and businesses.
That’s up about 17% percent from the previous year and significantly more than the $6,957 the borough pulled in from remote and online sales taxes in 2018 when a U.S. Supreme Court decision on online sales tax collection launched a 2020 statewide initiative known as the Alaska Remote Sales Tax Commission. The commission collects and distributes tax revenues to almost 50 cities and boroughs around the state.
Before the court ruling, states and municipalities were blocked from collecting sales taxes from so-called “remote merchants,” sellers that did not have a physical presence in the tax jurisdiction. Haines Borough residents could order tax-free through retailers like Amazon, though borough finance director Jila Stuart said some companies had already started submitting online sales taxes.
Even before [the case], one of the first businesses was Netflix,” Stuart said said.. “Long ago their lawyers decided that because they were mailing dvds… they were competing with [local businesses] and they decided they had to collect and submit sales tax.”
There are other companies, like a segment of Amazon, which pay the tax directly to the borough instead of going through the statewide sales tax commission. But the vast majority of the online revenue comes through the commission.
The statewide organization in fiscal year 2024, which ended June 30, distributed almost $24 million in sales tax receipts, after administrative expenses, to those municipalities — almost triple the $8.5 million in the first full year of the program in fiscal 2021.
A municipality must have a general sales tax in order to collect tax from online sales, and the tax rates must be the same for online and local businesses.
Haines areawide sales tax is four percent, within the townsite it bumps up to 5.5%. That generated just over $4.4 million in 2023. Revenue from online sales was nearly 11% of that total.
Sales tax revenues from online purchases are increasing as people shop more online and as more remote merchants around the country follow the law and collect state and local taxes. Before the Supreme Court ruling in 2018, most online merchants declined to collect sales taxes on goods shipped into states and cities with a local tax.
Online and remote sales tax revenue by calendar year
2018 $ 6,957
2019 $ 79,495
2020 $ 178,371
2021 $ 305,588
2022 $ 405,555
2023 $ 473,909
The Wrangell Sentinel’s Larry Persily contributed to this story.