Wrangell businesses that are behind on their sales tax payments could see their names published on the borough website as part of an effort to collect on delinquent accounts.
The borough assembly unanimously passed the first reading of an ordinance on July 28 designed to tighten enforcement of the sales tax code. If approved in a second reading after a public hearing, the new rules would allow officials to post delinquent accounts on the borough website and levy fines on business owners who ignore financial audits.
Residents will have an opportunity to weigh in on the proposed ordinance during a public hearing scheduled for the Aug. 25 assembly meeting.
Under the proposed ordinance, the borough would have the authority to list businesses that fail to turn in tax filings or owe back taxes, penalties and interest. The public listings would display the company name, unpaid reporting periods and delinquency status.
Sales taxes not paid within a month of the due date are charged a 5% penalty for the first month and a monthly interest rate of 1% from the date of delinquency, compounded. The borough expects to collect about $4 million in sales taxes this fiscal year — its largest source of revenue.
In addition to public listing of delinquent accounts, the measure would add a penalty for businesses that fail to comply with tax audits.
Businesses would be required to supply requested receipts, ledger books and supporting records to the sales tax inspector on time. Failing to submit those files within 30 days of receiving a written notice will result in a $500 civil penalty.
During the meeting, Assembly Member Jim DeBord cautioned that public naming should strictly serve as a last resort after all communication attempts fail.
He said, “I just want to make sure that we’re doing 1000% of all that we can, to make sure that the delinquent account holders are contacted before we print any names.”
Finance Director Rob Marshall reassured DeBord that staff will exhaust every outreach process before publishing any business details online.
