In the wake of an accused crime by several business owners, the city is changing how it will enforce cigarette taxes to make sure it gets every single dollar owed.
Mayor Dan Sullivan proposed changing the city's cigarette tax excise code after eight local business owners were indicted on federal charges after an investigation revealed the stores were allegedly selling untaxed cigarettes.
In Anchorage, cigarettes are supposed to have a federal, state and city tax included.
According to the indictment, the owners of the smoke shops allegedly claimed the cigarettes were going to be sold in the Kenai Peninsula Borough, but ended up sold in Anchorage at full price. The owners pocketed $1.3 million of city taxes over a 21-month time span.
The new version of the cigarette excise code will include more documentation of cigarette sales and the taxes due to the municipality. The revised code also proposes another employee be hired to regulate the tax with businesses around the city.
City leaders say the changes will prevent loopholes moving forward. This year, the tax is expected to bring in $22 million of revenue and even more next year.
"We are opting for a paper trail that is able to be audited to make sure that taxes have been paid," said Michael Mullane, who is the principal administrative officer for the city's treasury division.
The Assembly will take on the issue on Tuesday evening’s meeting (Nov. 19).