SitNews - Stories in the News - Ketchikan, Alaska



By Georgianna Zimmerle


April 30, 2006

Everyone loves a magic show! The argument presented that KPU shouldn't be required to collect sales tax is zealous misdirection. Why should government that is mostly supported by taxes and fees charged to citizens be given a market advantage over its competition in the private sector? The most important concept that any merchant needs to understand is that the business does not pay sales tax - the client or customer pays sales tax. The merchant collects the sales tax and passes it through to the government. These funds do not belong to the business. The merchant's cost of doing business does not affect the pass-through of sales tax revenues.

Of course, a merchant who does not collect sales tax appears to offer a less expensive product. Every business would like to have that advantage over the competition. The intention of the sales tax code is have an alternative to property tax revenues to generate income to pay for public services. It is not to "level the playing field." The unions would love to see a sales tax exemption for all private sector companies that have signed a collective bargaining agreement. KPU may have invested millions of dollars in its utility poles; however, the revenue that paid for those poles comes directly from tax paying citizens or government grants (also funded by tax revenues). The poles for new subdivisions and extensions are the responsibility of the developer or private citizen. Now, KPU enjoys the opportunity to collect rent from the private sector technology industries for use of these poles.

The Borough's sales tax ordinance is already overloaded with exemptions. Many of those exemptions ought to be eliminated. Every government agency that competes with the private sector should pay sales taxes.

Georgianna Zimmerle
Ketchikan, AK - USA

About: Georgianna Zimmerle is a long time resident of Ketchikan. She has previously served as the Ketchikan Borough Manager and Manager of Ketchikan Indian Community.


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