Bethel Nonprofits Push Back On Current Sales Tax Code

Jan 26, 2018

The Tundra Women's Coalition's Thrift Store, in Bethel.
Credit Paul Basile

The City of Bethel's push to enforce the sales tax ordinance on non-profit organizations continues to meet resistance. The current code says that while nonprofits are exempt from paying sales tax on items they purchase, they are still required to collect the tax on items they sell.



Tundra Women’s Coalition Executive Director Eileen Arnold says that she’s requested an exemption when it comes to collecting sales tax, especially for the TWC thrift store. Arnold and other non-profit leaders have spoken during ‘People to be Heard’ at the last two Council meetings. Later speaking to KYUK, Arnold described a thrift store that was losing money, and exists more as a service to the community.


“What I’m thinking about in that situation is for sure our thrift store,” Arnold said. “It’s about $4,000 in debt right now.”


Arnold says that the thrift store ought to be exempt. She says that applying a 6 percent sales tax to items they sell won’t amount to much anyway. Plus, she says, most thrift store purchases are for small amounts, a dollar or less sometimes, and often it's the most needy in the community who are buying. Arnold says that collecting the tax would increase the work for the administrative staff and volunteers who run the store.


“Watching all those receipts, and generating all those reports, and then cutting a check for, like, $18 a month is just,” said Arnold, “for such a small amount it just feels like there certainly could be better uses of everybody’s time.”


Arnold says that in the case of administrative staff, the priority ought to be helping those in need of the Coalition’s services.


“We’re watching the shelter, we’re going on crisis calls, we’re going on SART calls because we’re limited with how much admin money we have. So it’s just another administrative need that’s just going to add a lot of time that we don’t have.”


City Manager Peter Williams maintains that there's not much to it. There's applying online for the business license, filing the tax form, and making a payment. There is not that much more to the process, he says.


City Attorney Patty Burley says that ultimately the city wants nonprofits to understand that it's the buyer, not the seller, who should be taxed. She says that right now the city is only putting out educational information as a reminder on how the current Bethel Municipal Code works. She adds that if there's not more compliance, the city will have to move to auditing the records of those who should be collecting the tax.