Marijuana Sales Tax Bond - City of Anchorage, AK in Alaska

Brief Summary

Anchorage Treasury will not issue a marijuana retail sales tax registration until your financial guarantee has been reviewed and accepted. A surety bond is one of three ways to meet that guarantee, and it keeps your cash in the business instead of locked in an escrow account or tied up behind a bank letter of credit.

Every marijuana retailer registering for the Municipality of Anchorage retail sales tax under AMC Chapter 12.50 must post a financial guarantee under AMC 12.50.160. The amount is not fixed. Treasury sets it at its estimate of your average annual sales tax, based on your own sales, comparable retailers or industry averages, or $10,000, whichever is higher.

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How to Apply for a Marijuana Sales Tax Bond:

• Submit the Application for a Certificate of Registration, Retail Sales Tax on Marijuana and Marijuana Products, to the Anchorage Treasury Division.
• Wait for Treasury to notify you of the required guarantee amount, which will be at least $10,000.
• Apply for the bond in that exact amount using the business name and Alaska business license number shown on the application.
• Have the principal and surety sign the Municipality of Anchorage Tax Liability Bond form, with notarized signatures.
• Deliver the original bond to Treasury, which will not issue the registration until it has reviewed and accepted the guarantee.
• Allow at least five business days for processing after the application is complete.

Detailed Information About the Alaska Marijuana Sales Tax Bond:

The amount is set by Treasury, not by you

Most retailers expect a flat figure. Anchorage does not use one. Under AMC 12.50.160 the chief fiscal officer sets the guarantee at an estimate of the average annual sales tax collected by the retailer, a comparable retailer or industry averages, or $10,000, whichever is higher. So $10,000 is the floor. A busy store can be asked for more. Treasury reviews your application, tells you the required amount, and only then reviews the guarantee you provide. It can also require an increase later based on the sales reported on your returns or found in an audit.

What the bond guarantees

The bond is a Tax Liability Bond on the Municipality of Anchorage form, running to the Chief Fiscal Officer. It guarantees that the retailer will pay all taxes, penalties, interest and costs owed under AMC Chapter 12.50 during the effective period of the bond. The surety must be authorized to do business in Alaska. Liability continues until the surety terminates the bond, and the surety must give Treasury written notice at least 30 days before any expiration, nonrenewal, lapse or termination.

Other ways to meet the guarantee

AMC 12.50.160 allows only three methods: a surety bond, a cash deposit in escrow with the municipality or an Alaska financial institution, or an irrevocable letter of credit from a bank authorized to do business in Alaska. The guarantee can be posted in the retailer's name or personally by an owner, partner, member, officer, director or responsible party.

You can get out of it later

Once a retailer has filed returns and paid the tax in full and on time for 24 consecutive reporting periods, it may ask Treasury in writing to waive the guarantee requirement. Until then the guarantee stays in force for as long as the store is registered.

Eligibility and Requirements for a Alaska Marijuana Sales Tax Bond:

• Guarantee amount set by the chief fiscal officer, never less than $10,000.
• Obligee is the Chief Fiscal Officer of the Municipality of Anchorage.
• Surety authorized to do business in the State of Alaska.
• Bond written on the municipality's Tax Liability Bond form.
• Bond stays in force while the store is registered, unless a waiver is granted after 24 consecutive timely reporting periods.
• Registration expires September 30 each year and must be renewed.

Alaska Marijuana Sales Tax Bond FAQs:

Official and Additional Resources for the Alaska Marijuana Sales Tax Bond: