Bethel City Councils Weighs In On Rural Determination and Sales Tax Exemptions

by Ben Matheson on October 23, 2013

The Bethel city council finalized its stance to the Federal Subsistence Board about the process of choosing which communities qualify as rural.

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As it stands, Bethel would lose its rural status once the population hits 7,000. In their final comments, the council urges the board to consider the rural nature of Bethel and residents’ dependence on subsistence foods. The council removed any reference to grouping Bethel with other communities. The Federal Subsistence Board can consider communities “in aggregate” in the rural determination Council member Sharon Sigmon said that may change the population numbers unfairly.

“It’s not like we have bedroom communities that just come in to work. We are very isolated and each one of our communities is very isolated… by looking at Bethel and aggregating simply because we might share a high school or some people might come here to work, it’s not the typical suburban type of population,” said Sigmon.

The council asked the federal board to include the state’s guidelines about subsistence areas. The council unanimously approved the final comments.

The council looked into the abuse of sales tax exceptions. The city exempts some businesses from paying sales tax at the point of purchase if they later resell the same item. The city then collects sales tax at the final sale to the customer. The council heard from Frances Samuelson about a couple restaurants that she said were taking advantage. She’s seen the attempted purchases.

“Fresh dozen doughnuts, cartons of cigarettes, lighters,” said Samuelson.

She said these items that are not resold and taxed are costing the city thousands of dollars in lost revenue. Councilman Mark Springer noted the citizens are sometimes seeing strange tax-free purchases and it’s costing them.

“The city and the taxpayers of the city are getting robbed, they’re getting ripped off,” said Springer. “People are stealing from city coffers by saying oh, I’m tax exempt on this extra large microwavable burrito.”

The eligible customers are required to show business license at the time of sale. Springer recommended that the city educate both retailers and business license holders about the exact rules for tax exempt purchases

In other action the council reappointed Minnie Salleson Fritts and Barbara Mosier for their positions on the Parks and Recreation committee. The council also thanked outgoing members Mary Sattler and Gene Peltola Junior.

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