Juneau lawyers step up enforcement of sales‑tax delinquencies; criminal filings used to compel payment

The Assembly Finance Committee received an update July 9 on the city’s efforts to collect unpaid sales taxes, with the city reporting expanded use of civil and criminal tools to bring delinquent businesses back into compliance.

Attorney Wright, representing the city’s legal team, said the city has focused recent efforts on faster outreach, payment plans and, for repeat noncompliance, criminal prosecution. “We are utilizing the criminal prosecution option for, again, repeat offenders, people who are failing to engage with the sales tax office, people who, you know, are not showing up to court,” Wright said. She added that criminal prosecutions are intended to get a taxpayer’s attention and bring them into compliance rather than to secure convictions: “On these cases, we are seeing people paying attention, showing up to court, getting back in compliance, and then most times, we have then dismissed the criminal charges against them.”

Director Flick, who presented packet materials and answered committee questions, described the operational changes that accompanied the legal focus: earlier detection of failures to remit, faster outreach and more routine use of payment plans when businesses engage. Flick said the city will pursue court action against repeat offenders and those who fail to respond to outreach, and that civil remedies such as liens and garnishments are available. “These cases allow us to garnish wages. They allow us to put liens on people's property. They allow us to garnish their PFD,” Wright said.

Flick and Wright provided several quantitative and procedural clarifications. Wright said the city has filed criminal complaints against roughly “four or five” businesses in recent months, and reported that the city had about 500 accounts classified as non‑filers at the end of the reporting period; staff said they investigate non‑filers individually and administratively close accounts only after due diligence. Flick described the estimation process for assessing liabilities when businesses do not voluntarily provide sales data: the city uses prior filing patterns, industry comparisons and other records to estimate sales and provide the business an opportunity to contest or supply its own records.

Committee members asked about how delinquent accounts affect budget forecasting. Flick said large judgments may be collected incrementally and therefore typically will not immediately “move the needle” in the city’s adopted budget, though successful enforcement has produced material recoveries and improved compliance. The memo provided to the committee is produced quarterly and will be regularly included as an informational item in future AFC packets.

The committee took no formal action on the update; staff described the presentation as informational only and said they will continue quarterly reporting.