TITLE 9. TAXATION
AND REVENUE SHARING
Part I. Taxation
Chapter 1. Provisions of General Applicability
Section 9.101. Rules of application.
(1) If an object is subject to more than one tax, only the
higher tax applies.
(2) An accessory or part for a motor vehicle, boat, or
equipment or appliance is subject to the same tax as the object for which it is
an accessory or part.
(3) The tax rates provided in Section 9.202
(1),(4),(8),(11),and (13) apply to a sale, even if the container sold has a
smaller volume or fewer cigarettes than stated for the tax rate in question.
Chapter 2. Sales Tax
Section 9.201. Imposition. Except for goods made or produced in the State a sales tax
attaches to goods upon their first sale in the State. The seller pays the tax
on all goods in a shipment no later than 120 days after arrival in the
State. The State has the power to hold
the release of future shipments if the seller is not current on taxes due under
the Code and applicable Regulations.
Amended by State Law 7-94.
Section 9.202. Rates. The sales tax is on a percentage of the sales price or per unit
as indicated below:
(1) beer:
(a) 25 cents per glass container of 12 fluid ounces
(b) 15 cents per all other container(s) of 12 ounces
(c) plus 2 cents per additional 2 fluid ounces
(2) boat...................................................................... 3 percent
(3) cigar...................................................................... 5 cents
(4) cigarette:
(a) 15 cents per pack of 20 cigarettes
(b) plus 2 1/2 cents per additional 5 cigarettes
(5) equipment or appliance........................................... . 5 percent
(6) food....................................................................... 1 percent
(7) jewelry .................................................................. 20 percent
(8) liquor:
(a) 1 dollar per 26 fluid ounces
(b) plus 5 cents per additional fluid ounce
(9) motor vehicle 5 percent
(10) outboard motor .................................................... 3 percent
(11) soda
(a) 2 cents per container of 12 fluid ounces
(b) plus 1 cent per additional ounce
(12) tobacco product ................................................... 10
cents per ounce
(13) wine
(a) 50 cents per 26 fluid ounces
(b) plus 4 cents per additional fluid ounce
(14) goods not stated elsewhere in this section ............. 2 percent.
Background
Amended by State Law 6-66.
Chapter 3. Transaction Tax
Section 9.301. Transaction tax. A transaction tax
of five percent of the value of the transaction price received attaches to the
following transactions:
(1) lease of office or dwelling place;
(2) lodging;
(3) meal;
(4) motor vehicle rental; and
(5) video tape or film rental.
The consumer who purchases, leases or rents the goods or
property, pays this tax at the time of the transaction.
Amended by State Law 7-56.
Chapter 4. Procedure and Regulation
Section 9.401. Inspection. Goods arriving in the State are subject to Government
inspection. Regulation provides for determination of value at inspection.
Section 9.402. Documentation. Upon arrival of its vessel in the State a carrier or its
agent submits to the Director a copy of a manifest, bill of lading or waybill
for all goods on the vessel intended for off-loading in the State. The
consignee of the goods shall be responsible for providing the Director with a
copy of invoice. Regulation provides
for other particulars of documentation.
Background
Amended by State Law 4-3.
Section 9.403. Regulations. In addition to other regulations required by this title the
Director of the Department of Administration and Finance establishes
regulations for the payment and collection of taxes imposed by this title,
including the definition of terms consistent with this title. Regulation may provide for:
(1) payment of sales
tax no later than 120 days after the release of goods to a consignee;
(2) a presumption in
favor of intended sale by certain categories of persons;
(3) requiring each
seller of goods in the State to maintain a record of each sale he makes and to
provide those records to the State;
(4) determination of
sales value; and
(6) other matters
necessary for an effective and fair tax collection.
Background
Amended by State Law 7-1 and
State Law 7-94.
Chapter 5. Municipal Government Tax Power
Section 9.501. Commercial license. In addition to a tax or license fee it may lawfully impose,
a municipal government may impose an annual license fee not exceeding $100 for
a commercial activity conducted in the municipality. The Government retains the
paramount power to examine, restrict, close, penalize, or otherwise regulate,
the conducting of a commercial operation, for the public welfare.
Section 9.502. Limitation.
(1) A municipal government may not tax or license:
(a) the ownership or use of a motor vehicle, or use of a
public road;
(b) the sale, possession or consumption of alcoholic drink.
(2) A municipal government may not impose a tax on a sale or
a transaction taxed pursuant to chapter 2 or 3, or goods made or produced in
the State.
Part II. Revenue Sharing
Chapter 11. Rules of Application
Section 9.1101. Meaning of "State taxes". For purposes of computing a municipal revenue share
"State taxes" means taxes collected by the Government pursuant to
Part I of this title.
Background
Amended by State Law 4-88.
Part III Fees and Charges
Chapter 21. Airport Utilization Fee.
Section 9.2101. Definitions. In this Chapter:
(1) "Passenger" is any person departing from
Kosrae International Airport by commercial aircraft except the following:
(a) Transit passengers who arrive and depart from the Kosrae
International Airport within a twenty-four hour period on the same flight and
aircraft;
(b) Airline employees necessary for aircraft flight
operations;
(c) Persons departing for medical emergencies, including the
patient and necessary attendants, as certified by the Director of Health
Services, his designee, or other licensed medical practitioner;
(d) Children under the age of two while travelling with an
adult;
(e) United States Armed Forces personnel travelling as an
activity of the United States Armed Forces;
(f) Persons on charitable or disaster relief missions
officially sanctioned by the Governor, his designee, or the Speaker of the
Legislature or his designee.
(2) "Director" is the Director of the Department
of Administration and Finance or his designee.
Background
Added by State Law 4-88. Amended by State Law 7-1.
Section 9.2102. Airport Utilization Fee. Each passenger departing from the Kosrae International
Airport to any destination outside Kosrae State pays an Airport Utilization Fee
of $10.00. The fee is paid by or on behalf of each passenger and is collected
by the Director upon the passenger's departure from the State at the Kosrae
International Airport Terminal. A passenger does not have the right to depart
from Kosrae International Airport until the Airport Utilization Fee is received
by the Director. The Director may provide by regulation, procedures for the
efficient collection and handling of Airport Utilization Fee moneys, including
the imposition of fines not to exceed $50.00 for the failure or refusal of any
passenger to pay the Airport Utilization Fee.
Background
Added by State Law 4-88 and
amended by State Laws 5-59 and 6-146.
Chapter 22. Recycling Deposits
Section 9.2201. Beverage Container Recycling Deposit. A refundable recycling fee of five cents per container is
imposed on all aluminum beverage containers arriving in the State.
Background
Added by State Law 5-15.
Section 9.2202. Collection of Recycling Deposit. The recycling deposit imposed by Section 9.2201 of this
chapter is not a tax but is collected pursuant to procedures and regulations
established under Chapter 4 of this title.
Background
Added by State Law 5-15 and
amended by State Law 6-20.
Section 9.2203. Recycling Agent. The State contracts with the Kosrae
Community Action Program as the State recycling agent. The recycling agent
establishes a redemption site and refunds monies collected pursuant to this
chapter at the rate of five cents for each returned empty aluminum beverage
container upon which the deposit was collected.
Background
Added by State
Law 5-15.