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Borough eyes jail time for sales-taxes perfidy


Daily News Staff Writer

At its regular meeting on Monday, the Ketchikan Gateway Borough Assembly will consider allowing the borough to seek jail time for merchants who refuse to cooperate with a forced sales tax filing.

A forced filing is performed when a merchant fails to file a sales tax return, and the borough is unable determine the value of tax owed because a merchant hasn’t kept accurate records or has falsified the books.

In the filing, borough staff estimate the value of sales handled by the merchant and request the sales tax owed to the borough.

If a merchant refuses requests for information or for the tax return, the borough can issue a $50 fine, which becomes a $250 fine with repeated offenses.

The changes to the code state that if the merchant fails to cooperate with the borough "with intentional or reckless intent, upon conviction the violator may be sentenced to up to 90 days in jail for the violation in addition to the fine amount."

An individual in jail costs the borough about $135 per day, according to borough documents, and the borough estimates that the city’s public defender, appointed in 52 of 62 cases handled by the city in 2012, would cost $540 per case.

Ordinance 1658, if approved, would be the latest of several steps taken by the borough to collect sales taxes. In 2013, the Assembly has approved additional notices and advertising of due dates for tax returns as well as stiffer fines for failing to file returns.

A second sales-tax item goes before the Assembly on Monday. Resolution 2465 sets Oct. 12, 2013, as a borough sales tax holiday "on the condition that the City of Ketchikan also approves a sales tax holiday for that date," the resolution states.

Sales tax holidays have fallen in October for the past two years. In 2012, $849,758 worth of sales occurred on the holiday, which would have yielded $50,396 in sales tax.

John Harrington, chairman of the borough’s Planning Commission, said at the Assembly’s Feb. 25 meeting that to capitalize on the holiday, the borough could cooperate with the Greater Ketchikan Chamber of Commerce, Ketchikan Visitors Bureau and the Ketchikan Area Arts and Humanities Council to make the Oct. 12 weekend a "Live Local, Shop Local" celebration.

Only Oct. 12, the Saturday, would be a tax holiday, but the participating organizations would plan events on the Friday and Sunday surrounding it to strengthen the draw from neighboring communities to Ketchikan.

Also on Monday, the Assembly will consider accepting two scoreboards for Norman Walker Field donated by Rotary 2000 and the Ketchikan Little League Association.

The scoreboards and installation would cost $42,900 and be paid for by Rotary 2000 and the association with funds that have been raised in previous months.

Rick Erickson spoke at the Feb. 25 Assembly meeting, representing the Little League association, to support the acceptance of the score boards. He said they planned to install them farther back in the field so that they would be the correct size for high school games.

Increasing the size of the field would require a light pole to be moved, but Borough Manager Dan Bockhorst said at last week’s meeting that doing so could cost less than $6,000. Moving the pole will be at cost to the borough and not the other organizations.

Bockhorst said he supported the project at the meeting, and didn’t raise concerns about the Rotary 2000 logo in the top left corner of the scoreboard.

There was a row over the plan to install a scoreboard at Esther Shea Field at Fawn Mountain Elementary School because it included the large logo of a private business. Borough officials were concerned that the logo would amount to free advertising without a public process.

Those concerns "were addressed and resolved in advance" by the borough and the organizations, according to borough documents.

Four public hearings are set for Monday:

• Ordinance 1651-A was introduced Feb. 25 and gave the Assembly the option to change its meeting schedule from every other week to once a month, but Assembly members said they had heard from members of the public that this would have been an unwelcome change, and amended the ordinance to add only a definition of Assembly work sessions to the borough code.

• Ordinance 1654 would increase Waterfall Service Area fees to $206.25 per lot, up from $156.25. The Service Area Board requested the increase to handle the cost of paving Cascade Road. The board has requested a loan from the borough to pay for the road work. If the ordinance is approved, fees would rise on Jan. 1, 2014. Area fees were last raised on Oct. 1, 2012.

• Ordinance 1655 is the $75,000 loan to the Waterfall Service Area for paving of Cascade Road. If approved, the funds were be loaned from the Land Trust Fund with a five-year period to pay it back to the borough.

• Ordinance 1657, which rezones 61,995 square feet of 1715 S. Tongass Hwy. from Low Density Residential to Light Industrial, is up for introduction at the meeting. Business owner David Doyon Sr., owner of Doyon’s Landing, wants to expand his business, and requested the rezone to better accommodate his business, according to borough documents.

Also on Monday, the Assembly will consider an ordinance exempting licensed psychotherapists from filing sales tax returns and a resolution allowing a deck and pier to encroach into a 50-feet-wide public access easement along the waterfront of a piece of property at the 16 mile mark of North Tongass Highway.

There will be time for public comment near the beginning of the 5:30 p.m. Monday meeting in Assembly Chambers.