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Northern Adjusters, Inc. v. Department of Revenue
Citations: 627 P.2d 205; 1981 Alas. LEXIS 472Docket: No. 5128
Court: Alaska Supreme Court; May 1, 1981; Alaska; State Supreme Court
Northern Adjusters, Inc., an independent insurance adjuster for approximately 200 companies, appealed a superior court order affirming a ruling by the Alaska Department of Revenue that it was liable for a gross receipt tax under the Alaska Business License Act. Prior to January 1, 1979, businesses in Alaska were required to pay a $25 license fee plus a variable percentage of gross receipts. Although AS 43.70.110(1) excludes "insurance businesses" from this tax, the Department of Revenue interpreted this exclusion to not include adjusters, leading to a tax liability of $2,238 for 1976 that Northern Adjusters paid under protest, seeking a refund for prior payments. The court upheld the Department's interpretation, noting the exclusion aimed to prevent double taxation of insurance businesses, which are already subject to a premiums tax. Adjusters do not fall under the definition of "insurers" and thus are not exempt. Northern Adjusters cited Title 21, which regulates the insurance industry and includes adjusters in its definition of insurance businesses. However, the court clarified that definitions in Title 21 do not apply to AS 43.70.110(1) due to their differing purposes—Title 21 focuses on consumer protection while AS 43.70 serves as a revenue measure. Northern Adjusters also claimed a violation of equal protection guarantees regarding the Department's treatment of agents and brokers. The court did not address this argument as it was inadequately raised in the lower court. The superior court's decision was affirmed, and it is noted that the gross receipts tax provisions were repealed effective January 1, 1979, although the $25 license fee remains in effect.