SALT Report 1862 – – The owner of an apartment building in Dillingham, Alaska was charged with failing to report local sales tax on rental income received from May 2008 through October 2010. Under Dillingham Municipal Code, landlords are required to collect and remit sales tax on all rental income.
The city charged the Taxpayer with failing to submit sales tax returns for thirty months which, under the Dillingham Municipal Code, is a misdemeanor offense. The Taxpayer filed an appeal arguing that the city’s sales tax ordinance was not valid at the time.
In 1977, an ordinance repealed the city’s then current sales tax and simultaneously reenacted a new sales tax. However, the ordinance did not include the terms of the new sales tax but, instead, referred to an Exhibit A. Exhibit A can no longer be found in the city’s records.
The Taxpayer argued that because Exhibit A was missing, the city’s sales tax was repealed in 1977 and a new one was never reenacted. The Alaska Court of Appeals rejected the Taxpayer’s claim and ruled that the 1977 ordinance and its missing exhibit were not relevant because the city had, since 1977, adopted a new sales tax ordinance. Further, this new ordinance has been upheld twice by the Alaska Supreme Court.
Consequently, the Taxpayer’s appeal was denied and the previous ruling by the District Court was affirmed.
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