Alaska Remote Sellers Sales Tax Commission

Fourth Quarter Update and Overview March 8, 2021 Jurisdictions to Date Adak North Pole Bethel Palmer Cordova Petersburg Borough Craig Saxman Dillingham Saint Paul Gustavus Seldovia Haines Borough Seward # jurisdictions - % taxing population Homer Sitka Houston Soldotna Juneau Tenakee Springs Kenai Thorne Bay Kenai Peninsula Borough Togiak Ketchikan City Toksook Bay Ketchikan Gateway Borough Unalaska Kodiak Wasilla Mountain Village Wrangell Nome Yakutat Jurisdictions ✓ 108 taxing communities in Alaska 32% of Alaska’s population ✓34 communities across Alaska have adopted the Uniform Code 84% of taxing population ✓ 7 other communities have joined the Commission and are working towards adopting the Uniform Code 3% of taxing population ✓ 14 communities ARSSTC is targeting as candidates interested in joining in 2021 3% of taxing population ✓53 communities ARSSTC will conduct additional outreach for joining in 2021 10% of taxing population Sellers

Total Sellers Registered in 2020: 751 Seller Registrations • December: 85 120 110 • November: 54 100 • October: 75 90 80 • September: 62 70 • August: 69 60 July: 86 50 • 40 • June: 71 30 May: 65 20 • 10

April: 56 0

February

March

April

May

June

July

August

September

October November • December • March: 114 • February: 14 January 2021: 94 (not included in 2020 total) Top Sellers for 2020 Q4

1. Amazon.com Services LLC (MPF)11. Kohl’s Inc. 2. Microsoft Corporation 12. Michelin North America Inc 3. Cascade Columbia Distribution 13. Zulilly, LLC 4. Target Corporation 14. Nike Retail Services, Inc. 5. Nordstrom, Inc. 15. QVC Inc. 6. Recreational Equipment Inc. 16. Zappos.com, LLC 7. BestBuy.com LLC 17. ContextLogic Inc. 8. L.L.Bean Inc. 18. Poshmark, Inc. 9. Shutterfly, LLC 19. Vitacost.com, Inc. 10. Backcountry.com, LLC 20. VF Outdoors, LLC Top Sellers for December 2020

1. Amazon.com Services LLC (MPF)11. VF Outdoors, LLC 2. Microsoft Corporation 12. Kohl’s Inc. 3. Target Corporation 13. Nike Retail Services, Inc. 4. Michelin North America Inc 14. Backcountry.com, LLC 5. Cascade Columbia Distribution 15. QVC Inc. 6. Recreational Equipment Inc. 16. Thermal Supply, Inc. 7. Nordstrom, Inc. 17. Zulilly, LLC 8. BestBuy.com LLC 18. PPG Industries, Inc. 9. Shutterfly, LLC 19. Lbrands Direct Fulfillment, LLC 10. L.L.Bean Inc. 20. Zappos.com, LLC Top Sellers for all 2020

1. Amazon.com Services LLC (MPF)11. ContextLogic Inc. 2. Microsoft Corporation 12. Zappos.com, LLC 3. Nordstrom, Inc. 13. Zulilly, LLC 4. Target Corporation 14. Kohl’s Inc. 5. BestBuy.com LLC 15. QVC Inc. 6. Cascade Columbia Distribution 16. DoTerra International, LLC 7. Recreational Equipment Inc. 17. Shutterfly, LLC 8. Poshmark, Inc. 18. Backcountry.com, LLC 9. L.L.Bean Inc. 19. Plexus Worldwide, LLC 10. Henry Schein Inc. 20. Thermal Supply, Inc. Tax Revenue 2020 Q4 2020 Q4 Sales Tax (filing month) $1,000,000.00

Tax Revenue $900,000.00

• October 2020: $769,705.55 $800,000.00 • November 2020: $874,031.19 $700,000.00 $600,000.00 • December 2020: $983,182.37 $500,000.00

$400,000.00

$300,000.00

$200,000.00

$100,000.00

$-

October

November December Tax Revenue 2020 2020 Sales Tax (filing month) and Sellers Registered $1,200,000.00 800 Tax Revenue by filing month 700 • February 2020: $221.03 $1,000,000.00 • March 2020: $29,190.21 600 $800,000.00 • April 2020: 217,049.21 500 May 2020: $353,114.95 • $600,000.00 400 • June 2020: $548,205.97 300 • July 2020: $572,368.03 $400,000.00 • August 2020: $632,325.55 200 September 2020: $662,707.28 $200,000.00 • 100 • October 2020: $769,705.55 $- 0 • November 2020: $874,031.19 • December 2020: $983,182.37

Submitted Funds Total Sellers Exempted vs Taxable Sales Q4 2020

Exempted versus Taxable Sales (filing month)

$60,000,000.00

$50,000,000.00

$40,000,000.00 37%

$30,000,000.00 63% $20,000,000.00

$10,000,000.00

Exempted Sales Net Taxable Sales $- October November December Net Taxable Sales Exempted Sales Exempted and Net Remote Sales 2020

Exempted versus Taxable Sales (filing month)

$60,000,000.00

$50,000,000.00

$40,000,000.00 34%

$30,000,000.00 66% $20,000,000.00

$10,000,000.00

$- February March April May June July August September October November December Exempted Sales Net Taxable Sales Net Taxable Sales Exempted Sales 2020Q4 Exemption Breakdown

17% Government Other 1% Purchase Threshold Resale Construction/ Contractor 14% Non-Profit 51% Senior Citizen Tax Free day Tax in Gross Outside Jurisdiction 17% Long Term Rental Non-Prepared Food 2020 Sales Exemption Breakdown

6% Government 22% Other 1% Purchase Threshold Resale Construction/ Contractor Non-Profit 11% Senior Citizen Tax Free day 49% Tax in Gross Outside Jurisdiction 11% Long Term Rental Non-Prepared Food 2020Q1 Sales Exemption Breakdown 2020Q2 Sales Exemption Breakdown Government Government 11% Other Other 1% Purchase Threshold Purchase Threshold Resale 1% 8% Resale Construction/ Contractor 41% Construction/ Contractor Non-Profit 50% Non-Profit Senior Citizen Senior Citizen Tax Free day Tax Free day Tax in Gross Tax in Gross 79% Outside Jurisdiction Outside Jurisdiction 6% Long Term Rental 3% Long Term Rental Non-Prepared Food Non-Prepared Food 2020Q3 Sales Exemption Breakdown 2020Q4 Sales Exemption Breakdown

Government Government Other 17% Other 28% Purchase Threshold Purchase Threshold 1% Resale 1% Resale Construction/ Contractor Construction/ Contractor Non-Profit 14% Non-Profit 51% Senior Citizen Senior Citizen 57% 8% Tax Free day Tax Free day Tax in Gross Tax in Gross 6% Outside Jurisdiction 17% Outside Jurisdiction Long Term Rental Long Term Rental Non-Prepared Food Non-Prepared Food Program Successes

• Updates to the Uniform Code • Reached $1 million revenues collected in a month (December filings – collected in January) • Resale certificates for remote sellers • Partnering with Avalara & Vertex Program Challenges

• Sellers calculating sales tax based on ZIP code • Compliance from Alaskan remote sellers located in jurisdictions without a sales tax • Continued outreach to prospective sellers • Escalated action against sellers that continue to ignore registration requirements Program Goals for 2021

• Continued growth in registrations from Alaska-based businesses • Continued growth in member jurisdictions • Amended return module implementation for sellers • Establish audit & compliance program • Big name seller compliance • Increase national awareness • Join & participate in national industry groups • Outreach with 3rd party tax-preparers and software providers • Liquor taxes from online sellers in several jurisdictions FY21 Projections

• Anticipate total revenues for FY21 to reach $9 million • Holiday spending combined with influx of registered businesses led to significant increases in November & December • Expect baseline monthly revenues for the next several months to fall in the $700k - $800k range • Continued modest single digit % growth expected as new members and new sellers are added Questions?

• Clinton Singletary, AMSTP Program Director 907-790-5307 [email protected] • Kara Johnson, AMSTP Program Administrator 907-790-5303 [email protected]