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Overcharged on sales tax? City says take it up with retailer

A receipt from a Nome business shows a 7% tax rate being applied to purchases on May 4.
A receipt from a Nome business shows a 7% tax rate being applied to purchases on May 4. Photo courtesy Cussy Kauer 

According to the City of Nome, a handful of retailers have been collecting too much in sales tax, and the issue was brought to the attention of the city council at its most recent meeting.

The over-taxation is coming from both brick-and-mortar businesses in Nome and online retailers, like Amazon. 

For the months of May through August, the city had previously set a seasonal sales tax rate of 7%, which is above the regular 5% amount. In the fall of 2022, voters repealed the seasonal rate

During the Monday, May 8 meeting of the Nome Common Council, Paul Kosto, the executive director of the Nome Chamber of Commerce spoke about the matter. 

Kosto said the 2% difference can add up when it comes to everyday or big-ticket purchases. 

“I’ve had a number of people call me and reach out to me showing receipts and a number of times the tax differences quite a bit it can be $10, $20, $30 to $100 in difference in the tax depending on what you’re buying,” Kosto said.

Kosto says he has spoken with Nome City Manager Glenn Steckman to help solve the problem. 

“I want to get on the record that this is still an ongoing issue and communication is obviously the failure point in this process,” Kosto said. “I’m just hoping that the city can as soon as possible rectify that.”

Because the tax has already been collected, Steckman says affected customers will have to reach out directly to the retailer for a refund. That includes Amazon

“If the retailer charged [a resident] more than 5% they should directly contact that retailer and ask for their the refund,” Steckman said.

Steckman added that all retailers in the city, as well as online retailers, were notified of the repeal of the 2% seasonal add-on.

KNOM sent a public records request to the city seeking information on which businesses have charged the seasonal sales tax rate of 7%. The city wrote via email, “The City of Nome does not maintain such a list.”

Of three large retailers in Nome contacted by KNOM, no comment was received by the deadline for this story.

Image at top: A receipt from a Nome business shows a 7% tax rate being applied to purchases on May 4, 2023. Photo courtesy Cussy Kauer.

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