Kenai Borough Sales Tax Structure

 

 

Kenai Borough Sales Tax Structure:

This is my understanding of the Tax.

The borough voted to change the sales tax structure.  The Kenai Borough now assess a sales tax on the Recreation industry and Charter Industry on a 岠Person Per day base.  This tax also includes the local city tax rates within the Kenai Borough. 

This does a couple of things, 1st raises the effective sales tax and 2nd makes the calculation of the tax more complex.  There are now 6 different components to the tax structure.  And they all have a $500 dollar cap which but is determined differently.

 

Example;

Client buys the boat for the day.

Cost is $1500

The number of people the client take with him is 1

Total number of people = 2

Charter runs out of Seward㡬e tax rates   4% city  2% boroﴡl = 6%

 

Old Way;

$1500 sale

$500 cap

Overage =1000

Total people =2

Taxable amount now $500

Tax computed = 500 x 6% = $30      city = $20  and Boro = $10

 

NEW WAY;

$1500 sale

$500 cap

Total people =2

$1500 / 2 = $750 - $500= 250 overage per person

Taxable amount now $1000

Tax computed = 1000 x 6% = $60    City = $40   and  Boro = $20

 

As you can see the effective tax is greater with the New Way of computing.  The above example is just one scenario.   You know the charter business has many different scenarios. 

The Kenai Borough is conducting training sessions on how to figure the sales tax, which I suggest that you attend.  They have schedule and contact numbers listed on their web site http://www.borough.kenai.ak.us/financedept/SalesTaxInfo/  .

The scenario I gave was just a charter.  I know that there are many of you that run packages with activities in different places of the Kenai Borough.  You will need to be aware of the changes.  Check with the Kenai Borough and find out what you need to know and how to compute the sales tax. 

If you are reading this page you know what I do⵩ld software to work with the charter and tour industry.  I do have the software that will be of great advantage to you and your business.  It is a management system that will track the sales taxes among other functions of the business. 

 

04/20/07

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