City Council To Consider Major Revisions To Tax Code

Jul 7, 2017

The Finance Committee’s City Council rep, Leif Albertson, gets into the details on the rewrite to Bethel's tax code.
Credit Courtesy of Lori Strickler / City of Bethel

If you've had trouble filing your taxes in Bethel, that could soon change. The city is rewriting its tax code to make the process easier for taxpayers, and to give the city a revenue boost. KYUK’s Christine Trudeau sat down with the Finance Committee’s City Council rep, Leif Albertson, to get the details.

Christine Trudeau: Leif, what are the things that people should be aware of with this?


Leif Albertson: I think the first thing to know about this is that it’s literally the culmination of over a year of work. So, at least since I got on Council, I’m sure before then. There’s really been a lot of pressure on administration to do a better job at collecting sales tax and I think the city’s made a great deal of progress. I think the place that we’re at right now in regards to collecting sales tax is much better than it was compared to two – three years ago. But one of the things our City Attorney [Patty Burley] correctly pointed out was that a lot of difficulties sprung from the fact that our sales tax code – the laws around sales tax – were old and ambitious. And over time people have just sort of added things and taken away things, and so it left us with a document that has ambiguities in it. It had things that didn’t sound right, but were right. There were things that sort of everyone knew, but weren’t true based on the code.  And so we ended up with sort of a system of things people didn’t know if they were supposed to pay or not. Different people were doing different things. And then, internally, it was very hard to enforce that and collect those taxes if the rules weren’t clear, so that began a rewrite of the sales tax code, basically [from the] ground up.

So, starting over. Looking at what other communities do. Our City Attorney put in a huge amount of work to rewrite this entire section, and from there it went to the Finance Committee, and that was over a year ago. So we’ve had about nineteen meetings looking just exclusively at this sales tax code, going over everything in detail, hearing from the public, and I think what we’re gonna end up with is a product that’s much better than what we currently have in terms of clarity and in terms of just equity so that everyone understands the rules, so that the rules can be enforced, and the city can collect the revenue that we’re supposed to collect.


CT: And you said that you met with many business leaders to get their input on this. Can you talk about some of those businesses?


LA: There’s interest from, obviously, actually, a lot of the non-profits in town. So one of the things that many of the meetings focused on was tax on gaming, right? Non-profit gaming or charitable gaming, and how that’s taxed in terms of taxing the buy backs, or how you do that if it’s a pull-tab. Or if it costs a dollar or five dollars, it’s not really a good way to make change, and so if there is another way to tax that. So that was one we had. Interest from businesses who had clients who live outside Bethel, and were not clear on how that should be taxed or businesses that were outside Bethel, but were in Bethel. It was not always clear on how that should best be taxed. We also had a lot of conversations about things that were re-sold. So, for example, if a landlord includes heating fuel as part of the rent and that rent is taxed, should the heating fuel also be taxed when the landlord buys it and effectively resells it to the tenant? So those were some of the thornier issues that the Finance [Committee] dealt with, and I’m sure will be revisited by council as we go through this over the coming weeks.


CT: Anything else that I might not be asking that you want to address with this, or maybe something else you feel people should know about in particular?


LA: I would just again point out the tremendous amount of work from the Finance Committee and by our City Attorney to go through this. I think we’re gonna end up with something that’s a lot easier to enforce. I know a lot of people in the community have concerns that the city hasn’t been collecting all the sales tax that was due, and that’s a big deal for us. We don’t have a lot of revenue streams here, and as we all know, a lot of state money is going away and may not be coming back, and so we need to be careful about this and I think the city has made huge progress on this. This will be a continuation of that and allow us to better stabilize our revenue from sales tax.


I think another thing for the public to know and to remember is that this will be going through the Council process. It’s going to be introduced; there will be public hearings. It’s a great time to be involved in that. And because sales tax revenue is so important to the City of Bethel, we don’t have property tax, we don’t have revenue streams, I’m sure that City Council will be asking a lot of questions of our Finance Department, of our City Attorney, to make sure that we’re not doing something that is going to cause negative financial outcomes for us. We don’t want it to change the tax on something and then find out all of a sudden we’re short revenue for next year. So I think it’ll be a process of working with administration, with Council, working with the Finance Committee, working with the public, to sort of answer all these questions. I would expect it to take a couple weeks. It’s a big document, you know, it’s over a hundred pages and I think we want to get it right. I mean, I kinda think we’ve been limping along with a wounded code for a long time and I think we can get this right. Sales tax is not something - sales tax code - is not something that sounds super interesting to everyone, but I’m actually pretty excited about this rewrite, and I’m looking forward to getting it on the books.   


CT: And if people wanted to come and comment on it, what would they do?


LA: Well, so anyone can come and speak at "People To Be Heard" at any Council meeting, every other Tuesday. The next one is on the eleventh and they can speak on any topic, including this. Assuming that this is introduced on Tuesday’s meeting, the eleventh – I would be surprised if it wasn’t – so very likely be introduced on the eleventh. The next Council meeting would be when there would be a public hearing, specifically on this.


CT: Thank you.


LA: Yep.