4.16.160 Exemptions and limitations on exemptions

4.16.160 Exemptions and limitations on exemptions.

The following sales and services are exempt from the tax levied under this chapter only in accordance with the exemptions and limitations thereon, as provided for in this section:

A. Admissions. Sales of admission to school entertainments, school athletic events, and events conducted for the benefit of charitable or community organizations are exempt.

B. ATVs/Boats. That portion of the selling price of an all-terrain vehicle (ATV), snow machine, boat, or boat motor in excess of three thousand five hundred dollars ($3,500) is exempt, regardless of whether or not such items are purchased simultaneously, or are invoiced or otherwise billed on the same billing document.

C. Banking. The following fees, sales and services charged by banks, savings and loan associations, credit unions and investment banks are exempt:

1. Fees for the sale, exchange or transfer of currency, stocks, bonds and other securities;

2. Loans. The principal amount of the loan, the interest charged for loaning of money, escrow collection services, and any fees associated with the loaning of money;

3. Services associated with the sale, exchange or transfer of currency, stocks, bonds and other securities;

4. Pass-through charges on loan transactions which include sales tax;

5. Sale of insurance policies, bonds of guaranty and fidelity (AS 21.09.210).

D. Casual and Isolated Sales, Services or Rentals. Proceeds from casual, occasional or isolated sales which are easily identified as the sale of tangible personal property or goods at such functions as moving, garage, yard, food and bake sales, markets or fairs (such as flea markets and craft fairs), the sale of private vehicles when the seller is not a dealer in used vehicles, or services such as babysitting or house-sitting provided the seller does not regularly engage in the business of selling such goods or services or rentals are exempt, but only if:

1. The sales of goods and services do not occur for more than ten (10) days in a calendar year, and are not made through a dealer, broker, agent or consignee; or

2. The rental of personal tangible property does not exceed sixty (60) days in a calendar year, whether or not consecutive.

3. Sales or rentals made pursuant to a business license or by sellers representing themselves to be in the business of making sure sales, rentals or services are not exempt.

4. The rental of real estate is not exempt.

E. Cemetery Plots. The sale of cemetery/burial plots is exempt.

F. Repealed by Ord. 21-14.

G. Compliance with State and Federal Laws. Gross receipts or proceeds derived from sales or services which the city is prohibited from taxing under the laws of the state or under the laws and the Constitution of the United States, including, but not limited to, the following:

1. Sales by the U.S. Postal Service are exempt;

2. Purchases made under the authority of or made with any type of certificate issued pursuant to 42 USC Sections 1771 through 1789 (Child Nutrition Act of 1966) are exempt;

3. Repealed by Ord.20-06.

4. Air transportation precluded from taxation under AS 29.45.820 is exempt;

5. Gross receipts or proceeds derived from sales to the United States Government, the state, a city or any political department thereof are exempt. However, the exemption shall not apply to the sale of materials and supplies to contractors for the manufacture or production of property or rendering services for sale to such government units or agencies on a contract bid award, in which event the contractor shall be deemed the buyer, subject to the payment of the tax;

6. A sale or rental to an employee of the state, its political subdivisions, or the federal government is exempt, but only when the government employee provides proof that the sale is for government business by paying for the sale with a government voucher, purchase order, check, credit card, or warrant, or providing other verifiable documentation to the seller to allow the seller to readily determine that the sale is for government business;

7. A sale or rental to a federally recognized tribe is exempt, but only when the tribal employee provides proof that the sale is for tribal government business by paying for the sale with a tribal voucher, purchase order, check, credit card, or warrant, or providing other verifiable documentation to the seller to allow the seller to readily determine that the sale is for tribal government business.

H. Credit Unions. Sales to or by federally chartered credit unions or credit unions organized under AS 06.45 are exempt.

I. Dues. Dues or fees paid to clubs, labor unions and other organizations solely for the privilege of membership are exempt.

J. Freight and Wharfage. Freight and wharfage charges, whether arising out of foreign, interstate or intrastate commerce, are exempt unless such delivery services are included in a through bill of lading in conjunction with interstate commerce.

1. Warehouse and storage services are not exempt.

2. Transportation of goods, equipment, or other property from one (1) point to another within the city limits by commercial movers is not exempt.

K. Maximum Tax. That portion of the selling price for a single piece of equipment or tangible personal property in excess of ten thousand dollars ($10,000) is exempt, where the selling price is totaled on one (1) invoice or on any sales slip under one (1) calendar day.

1. Services of a person licensed or certified by the state of Alaska as a doctor of medicine and surgery, a doctor of osteopath and surgery, a chiropractor, a dentist, an optometrist, an audiologist, a hospital, an occupational therapist, a physical therapist or a licensed or practical nurse; provided, that the service is within the scope of the state license or certificate are exempt;

2. Services of a person licensed or certified by the state of Alaska as a psychologist or psychological associate, a clinical social worker, an alcohol or drug counselor, a marital and family therapist or a licensed professional counselor; provided, that the service is within the scope of the state license or certificate are exempt;

3. Fees for supplies, equipment and services provided by a hospital, medical clinic or dental clinic for patient treatment, including laboratory and x-ray services are exempt;

4. Assisted living services provided in accordance with an assisted living plan and in an assisted living home licensed as such by the state are exempt;

5. Gross receipts or proceeds of the retail sale of prescription drugs are exempt;

6. Services rendered by massage therapists, including those working for a chiropractor or other medical provider, are not exempt.

M. Newspapers. Sales of newspapers are exempt.

N. Nonprofits. A sale of goods or services to any nonprofit entity that, at the time of sale, can produce a sales tax exemption card and that has a duly authorized federal tax-exempt status pursuant to IRS Regulations, Section 501(c)(3), (4) or (19) is exempt; provided, that any income from the exempt sale is also exempt from federal taxation.

O. Public Assistance. Purchases made with food coupons, food stamps, or other type of certificate issued under 7 USC Sections 2011 through 2025 (Food Stamp Act) or other certificates issued under 42 USC Section 1786 (Special Supplemental Food Program for Women, Infants and Children) are exempt.

P. Real Estate Sales. Sale of property consisting of land and/or buildings is exempt.

Q. Recreational Vehicles. That portion of the selling price of an all-terrain vehicle (ATV), snow machine, boat, or boat motor in excess of three thousand five hundred dollars ($3,500) is exempt, regardless of whether or not such items are purchased simultaneously, or are invoiced or otherwise billed on the same billing document.

R. Repealed by Ord. 21-14.

S. Retail Sales of Foods. Prepared food sold under the following circumstances are exempt as follows:

1. When served in cafeterias or lunchrooms of elementary, secondary, post-secondary schools, colleges or universities which are operated primarily for students and staff, and are not operated for the public or for profit;

2. When served to clients and staff, and not to the public or for profit, as part of services provided by a nonprofit hospital or other nonprofit government organization licensed by the state of Alaska for the care of humans;

3. Meals delivered by a nonprofit organization to handicapped or senior citizens at their place of residence or meals served on the premises of a nonprofit to senior citizens or the homeless or disadvantaged; provided, that the sale price of such meals does not exceed the cost of delivery or service of such meals.

T. Sales to Retailers. Are exempt only if the buyer presents to the seller a valid exemption card, issued by the city pursuant to this section, and for the class of activity involved for which the exemption is sought and:

1. The sale of goods, wares or merchandise to a retail dealer, manufacturer or contractor is for resale within the city as is or incorporated into a product or commodity to be sold by the dealer, manufacturer or contractor within the city, if the subsequent sale is subject to the city sales tax; and

2. The product is an item sold as part of the reseller’s primary business and is of such nature that it can be purchased by the general public in a transaction that is not dependent upon the purchase of another product or service.

3. Repealed by Ord. 21-14.

4. Food products that are purchased for resale must be purchased and sold as is or prepared in a commercial kitchen.

1. Fees and charges for extracurricular activities or events promoted or undertaken by educational or student organizations are exempt;

2. Sales by any student organization, parent/teacher organization or booster club recognized by the school or educational organization in which it operates, which proceeds are utilized to further the purposes for which the organization was formed are exempt;

3. Sales and services by schools or other educational organizations made in the course of their regular functions and activities, which proceeds are utilized to further the purposes for which such organization was formed, are exempt;

4. Sales of food and beverages at educational lunchrooms which are operated primarily for staff and/or students, and which are not operated for the purpose of sale to the general public for profit are exempt;

5. The service of transporting students to and from a school in vehicles when in the regular course of that business is exempt.

V. Securities. The sale of insurance and bonds of guaranty and fidelity, and the commission thereon (AS 21.09.210(f), 21.79.130, 21.80.130) are exempt.

W. Senior Citizen Exemptions. The following are exempt only if the buyer, or their designee, presents a valid senior citizen exemption certificate and the product or service is intended primarily for the senior citizen holding the exemption card:

1. Food intended for consumption by the senior citizen, their spouse, or same-sex partner living in the same household, or the unemancipated minor children of either the senior citizen or their spouse or same-sex partner, who live in the same household. For purposes of this subsection, “food” is defined in accordance with 7 USC Section 2012(g) (definition of “food” for purposes of the Food Stamp Act).

2. The payment of rent by a senior citizen on a single dwelling occupied as the senior citizen’s primary residence and permanent place of abode.

3. Payment for telephone, electric, and heating fuel by a senior citizen on a single dwelling occupied as the senior citizen’s primary residence and permanent place of abode.

X. Services. That portion of the selling price of a single service that exceeds twelve thousand dollars ($12,000) is exempt. This amount will be adjusted in 2022 and every two (2) calendar years thereafter consistent with the Consumer Price Index for All Urban Consumers for Anchorage metropolitan area compiled by the United States Department of Labor, Bureau of Labor Statistics. Adjustments to the amount listed will be rounded to the nearest one hundred dollars ($100). For the purposes of this subsection, a single service is an interrelated and interdependent function necessary to perform a specified action. If a single service is performed over a period exceeding one (1) month, the selling price must be apportioned to a monthly or invoice basis, whichever is more frequent, proportionate to the service performed, except for:

1. A commission paid to an agent for negotiating the sale of real property; or

2. A written contingency fee agreement award or settlement.

1. The sale of services for transporting passengers by river taxi, taxicab, bus, or hovercraft is exempt;

2. The sale of passenger seat tickets by a commercial airline is exempt;

3. The service of transporting disabled or handicapped individuals when in the regular course of that business is exempt;

4. The lease of vehicle for hire permits is not exempt;

5. The portions of a sale that are charges for recreational flightseeing or air/water/shore excursion travel or adventure services are not exempt, unless otherwise exempted by AS 29.45.820;

6. The lease or rental of vehicles is not exempt.

Z. Utilities. Payment for city water, sewer and refuse utility services by any and all persons or entities is exempt.

AA. Wholesale. Proceeds from products sold as wholesale sales to businesses designated by the state of Alaska as wholesalers are exempt. These include sales of goods, wares or merchandise to a retail dealer, manufacturer or contractor for resale within the city as is or incorporated into a product or commodity to be sold by the dealer, manufacturer or contractor within the city, if the subsequent sale is subject to the city sales tax. In this connection a retailer must stock that merchandise for resale, display the same to the public and hold themselves out as regularly engaged in the business of selling such products. [Ord. 22-23 § 2, 2022; Ord. 21-14 § 2, 2021; Ord. 20-06 § 2, 2020; Ord. 18-14 § 2; Ord. 18-02 § 2; Ord. 17-39 § 2.]