Wrangell’s borough assembly unanimously approved changes to the town’s sales tax and business license laws.
The new language updates definitions and penalties for local sales tax, including a 5% penalty for unpaid taxes after one month past the reporting quarter. It also establishes a registry of local businesses through license applications, which are free.
One change met with some pushback. The borough initially proposed sales tax exemptions for churches and nonprofits for “occasional” business lasting less than three days per year. So, sales from most nonprofit auctions, bazaars, and bake sales would be exempt. But nonprofits’ sales that last more than three days in a year would not be exempt.
At the assembly meeting on May 12, resident Joan Sargent spoke against the proposed change.
“Those definitions really, really, really tighten things for essential nonprofits in our community who run on. . .a thin margin. Three days is just not enough for these people, such as KSTK, Salvation Army to make enough money to function,” she said.
Sargent helps run Wrangell’s St. Francis Animal Rescue. She said the shelter doesn’t get discounts on veterinary services, and they pay $400-$800 to treat each new animal.
After the public hearing, Borough Manager Mason Villarma suggested amending the proposed language to exempt all nonprofit fundraisers from the sales tax.
Assembly members didn’t speak about the proposed sales tax changes, but voted to support the amendment and the overall ordinance.
In a related change, the assembly unanimously approved an update to the business license law, requiring all local businesses to maintain a local license.
Villarma said the borough needs an updated registry of local businesses for accountability.
“We’ve had problems in the past of applying sales tax equitably,” he said. “And making sure that one business is remitting and another’s not is a key function of the borough.”
The business license requirement will take effect on July 1, and licenses will be valid for two years. Local businesses can get more information through the borough’s finance office.
