§ 3.20.140. Exemptions.

The following sales are exempt from the tax levied under this chapter only in accordance with the limitations provided for in this section:

A.

Casual and isolated sales, services or rentals by a seller who does not regularly engage in the business of selling such goods, services or rentals are only exempt if such sales, services or rentals do not occur for more than five days in a calendar year, and are not made through a dealer, broker, agent or consignee;

B.

Sales and rentals of goods and the sale or performance of services resulting from orders received from outside the city by mail, telephone or other public modes of communication, if delivery of the goods ordered or rented is made outside the city by mail or common carrier, or if the performance of the services ordered occurs outside the city. The portion of the services ordered from outside the city that are performed inside the city are not covered under this exemption and shall be fully taxable;

C.

The portion of the selling price of an all-terrain vehicle (ATV), snow machine, boat or boat motor, automobile, truck, sport utility vehicle (SUV) or motors for same in excess of one thousand dollars is exempt regardless of whether or not such items are purchased individually, or are invoiced or otherwise billed on the same billing document;

D.

Dues paid to clubs and other organizations solely for the privilege of membership;

E.

A sale of goods made to a person in a foreign country for shipment out of the United States except where the good or products sold are exported in bond for re-entry into the United States;

F.

A sale the city is prohibited from taxing under the Constitution and laws of the United States or the Constitution and laws of the State of Alaska is exempt. A sale made directly to the state, its political subdivisions or the U.S. government is exempt. A sale to a federal or state contractor, or a contractor of a political subdivision of the state, is not exempt even if the government pays directly for the purchase unless the contractor and government cannot be viewed as separate entities. A sale to an employee of the state, its political subdivisions or the federal government is only exempt 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, or warrant, or providing other verifiable documentation to the seller to allow the seller to readily determine that the sale is for government business;

G.

Freight and wharfage charges, whether arising out of foreign, interstate or intrastate commerce are exempt. Warehouse and storage services are not exempt. Transportation of goods, equipment, or other property from one point to another within the city limits by commercial movers is not exempt;

H.

The sale of insurance policies, guaranty bonds and fidelity bonds;

I.

The lending of money and interest charged for loans, and other services provided by banks, savings and loans institutions, credit unions and investments banks are exempt except this exemption shall not apply to the rental of a financial institution's own rental property, shall not apply to a financial institution's sale of repossessed personal property and shall not apply to safe deposit box rental fees;

J.

The sale of food and beverages to students and staff in primary or secondary schools or college cafeterias or lunchrooms that are operated by the school primarily for teachers and students are exempt as long as such sales are made during regular school hours and such sales are not sold for profit;

K.

The sale of goods to a wholesaler, retailer or other purchaser will only be exempt if such a purchaser resells the same goods, in the same or altered form, and the resold goods will not be exempt from the tax levied under this chapter. In order to obtain the exemption provided for in this subsection, the purchaser shall display or provide to the seller at the time of the sale a copy of the purchaser's current Kotzebue business license. The Kotzebue business license must be for the class of activities involving the resale of the type of goods for which the exemption is sought. If a purchaser buys goods for resale in accordance with this subsection and for personal or other use at the same time, only the goods that are sold for resale in accordance with this subsection shall be exempt. Supplies, services, tools, repair services, equipment or any other goods or services purchased to support a business but not for resale in accordance with this subsection are not exempt;

L.

The sale of goods to a purchaser that will be transferred to another person in a sale or performance of a service is exempt only if the purchaser displays or provides to the seller at the time of the sale a copy of the purchaser's current Kotzebue business license. The Kotzebue business license must be for the class of activities involving the resale of the type of goods for which the exemption is sought. If a purchaser buys goods for transfer in accordance with this subsection and for personal or other use at the same time, only the goods that are sold for transfer in accordance with this subsection shall be exempt. Labor, tools, supplies, equipment rentals or any other goods or services purchased to prepare goods for transfer or in support of business operations but not for transfer in accordance with this subsection are not exempt;

M.

Purchases made with food coupons, food stamps, or other type of certificate issued under 7 U.S.C. 2011—2025 (Food Stamp Act), and purchases made with food instruments, food vouchers, or other type of certificate issued under 42 U.S.C. 1786 (Special Supplemental Food Program for Women, Infants and Children).

N.

Ambulance, dental, hospital and medical services, including the sale of hearing aids, physical therapy services, prosthetic devices and medicinal preparations, when prescribed by a licensed health care provider. Ambulance, dental, hospital and medical services do not include services rendered by chiropodists, barbers, cosmeticians, masseurs or veterinarians;

O.

The payment of rent by an elder on a single dwelling occupied as the elder's primary residence and permanent place of abode;

P.

Payment for telephone, electric, water, sewer and garbage utility services by an elder on a single dwelling occupied as the elder's primary residence and permanent place of abode;

Q.

A sale of goods or services to any entity that, at the time of the sale, is legally constituted and legitimately acting in accordance with a duly-authorized federal tax exempt status pursuant to IRS Regulations, Section 501(c) and if the same goods or services are used exclusively in the fulfillment of activities within the federal tax exempt status;

R.

Subscriptions of newspapers and periodicals and retail sales of newspapers;

S.

Retail sales of real property;

T.

Funeral and burial services, including cemetery plots;

U.

Sales of building and construction supplies for incorporation into or improvement to real property under a construction contract with the United States, with the state or with any public corporation or political subdivision thereof, or for incorporation into a structure or improvement to real property, which is accepted for ownership by such governments;

V.

Contractor labor charges and contractor building materials purchased outside the city. However, all articles of tangible personal property, including building goods, materials, supplies, fixtures and prefabrication component materials used in any construction project and all equipment purchases, equipment rentals and equipment maintenance or repair services, which are purchased or performed in the city are taxable unless specifically exempted by this chapter;

W.

Sales of school admission tickets, goods, services and rentals for school entertainment, athletic activities and all other activities conducted by school sanctioned groups;

X.

Salaries and wages received by an employee;

Y.

Child day-care, pre-elementary school and babysitting services; and

Z.

Gross receipts derived from fees and charges for educational programs, courses, classes or activities provided by a nonprofit institution, approved by the Board of Education of the State of Alaska.

(Ord. 04-10 § 2 (part), 2004).