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One of the benefits of living in Ketchikan for people of retirement age is the sales tax exemption offered by the Ketchikan Gateway Borough. Qualified borough residents 65 and over can apply for and receive a sales-tax exemption card. They then don’t have to pay sales tax on personal purchases “of all types of property, rentals and services not for use in any trade or business,” according to borough code.
However, the exemption applies only to the person with the exemption or his or her spouse.
It is not to be used for others, even beloved grandchildren, for instance. (Those who want to read the borough rules governing the sales-tax exemption can find borough code online at www.borough.ketchikan.ak.us/; under “KGB Code of Ordinances;” look up section 4.50.240.)
Not everyone observes this rule, and it can put merchants in a tough spot. Sometimes a younger person wanting to buy a big-ticket item lassos Grandma, brings her into the store with her tax-free card, and carries out the charade of how Grandma is getting a new appliance, for example. The item, however, is to be delivered to Grandboy’s.
Grandma can’t use her card to buy things for other people. That means she can’t go to the grocery store with nephew, buying his household’s groceries, use her card and have him pay the bill. The exemption is for Grandma, not all her relatives. It is to help folks on fixed incomes and, philosophically anyway, to give some thanks to those who have worked for all those years before getting to that fixed-income retirement.
What happens when the card is misused like that can be Grandma losing the card. More frequently, though, it puts the seller in a bind. They are not supposed to make it a tax-free sale when they observe this fraud — ugly word, but what else would it be called? However, what often happens, we’re told, is that the business eats the sales tax in order to make the sale. It doesn’t tell on Grandma, and it pays the sales tax due itself.
That seems an unreasonable imposition to place on a business person trying to earn a living.
Now, if Grandpa wants to take the family out to dinner and pay for it, that’s different and acceptable, we’re told. The exemption can be used in such an instance.
But please, if you are related to a tax-exempt senior citizen, don’t ask that person to use the privilege on your behalf. That’s not the idea of the exemption, and everyone else ends up paying the price. Let’s give our elders a break, and the rest of us pay our fair share.