The Republican candidate for a South Anchorage Senate seat says she played no part in the recent $1.5 million back tax settlement paid to the state by a leasing company headed by her husband.
But Natasha von Imhof, who won the Aug. 16 Republican primary for the district represented by retiring Sen. Lesil McGuire, has business connections to her husband's company, Delta Leasing.
Von Imhof's financial disclosure says she made at least $10,000 last year from a real estate company, Morningside LLC, that rents space to Delta Leasing.
Delta Leasing's president is Rudi von Imhof. The company, which is majority owned by Old Harbor Native Corp., agreed to settle its back tax bill last month by paying $1.5 million to the state. Neither the state nor the company would say how much in back taxes the company was assessed before the settlement.
Delta Leasing signed the settlement Aug. 17, a day after voters chose Natasha von Imhof in a three-way Republican primary in Senate District L. Old Harbor Native Corp. CEO Carl Marrs said the timing of the settlement had nothing to do with the election but was recommended for tax purposes.
The state tax case stemmed from a disagreement between Delta Leasing and the state over whether Alaska's vehicle rental tax applied to the company's business — rentals of trucks and other industrial equipment. Its clients include oil and gas, minin, and construction companies.
Rudi von Imhof testified before state lawmakers in 2014, asking them to change the law to exempt Delta Leasing and similar companies from the rental tax.
Natasha von Imhof said that if she was elected, she wouldn't attempt to strike the tax measure from state law, as her husband had sought.
"I have no intention of addressing that issue," Natasha von Imhof said. "If there's a conflict of interest in any nature, I will recuse myself."
She said she has had "zero conversations" with her husband about Delta Leasing and she was "not involved with the company in any way, shape or form."
Rudi von Imhof said in an email that his company "worked in good faith with the state for nearly three years to reach a resolution to this matter."
But he declined to answer specific questions about the settlement, referring instead to a brief statement released by the state Department of Law when the agreement was announced.
The tax dispute dates back to the Legislature's 2003 passage of the vehicle rental tax. Lawmakers geared the 10 percent tax toward tourists, limiting its application to rental contracts that were less than three months long and directing its proceeds toward tourism development and marketing.
But the state maintains the tax also applies to businesses like Delta Leasing that rent equipment like big pickup trucks, though not for renting heavy equipment like loaders and graders.
Delta Leasing has argued the tax shouldn't apply to Alaska companies renting industrial vehicles to commercial customers. And in a 2013 letter to the state, made public as part of Delta Leasing's push the following year to get the Legislature to change the law, Rudi von Imhof said the company would be on the hook itself for the tax if it was imposed.
"We have clearly communicated the willingness of Delta Leasing to pay any taxes that might actually be owed, even though we never collected those taxes from any of our customers," he wrote.
Other correspondence submitted to lawmakers showed Delta Leasing in 2013 paid the state under protest for about three years of taxes covering a period between 2010 and mid-2013.
Rudi von Imhof, in his 2013 letter, said state revenue officials raided the company in late 2013, seizing about 70 boxes of business records and computers from its Anchorage and Prudhoe Bay offices.
At the time, the company contended it wasn't subject to the tax for several reasons. Among them was that the tax applies only to vehicles driven on a highway or other "public right-of-way," and Delta Leasing said its North Slope customers use their vehicles on private roads inside security checkpoints.
The company also cited a tax exemption for trucks that weigh more than 8,500 pounds and are used for transporting "personal property," which Delta Leasing says includes equipment moved by its rentals.
And von Imhof, in his 2013 letter, said the state revenue department hadn't alerted industrial rental companies like Delta Leasing to their potential new obligations after the tax was passed like it had done for conventional rental car companies.
Delta Leasing, which hired a lobbyist, former House Speaker John Harris, for $3,000 a month in 2014, was one of several companies that made a failed push that year for a change to the vehicle rental tax law. The revised law would have reduced the weight for exempt trucks to 6,500 pounds from 8,500 pounds, and added a new exemption for those that moved commercial goods.
The original version of the legislation, sponsored by Fairbanks Republican Sen. Click Bishop, would also have made the exemptions retroactive to 2004, the year the tax went into effect. And instead of having to pay taxes, the companies would have gotten as much as $8 million in refunds from the state.
The legislation would have reduced state income by as much as $800,000 annually, according to projections by the revenue department.
A scaled-back version of the legislation passed the Senate, but never received a vote in the House.
State officials, citing the confidentiality of tax cases, wouldn't comment on the specifics of Delta Leasing's settlement, including how much it believed the company actually owed before signing the agreement. But they did respond to some of the company's arguments, which have also been made by similar companies.
The revenue department maintains the "personal property" exemption cited by Delta Leasing was originally aimed at "U-Haul-type" vehicles, not commercial pickup rentals, said Brandon Spanos, deputy tax director.
And state lawyers have advised the revenue department that Slope roads still qualify as state-maintained — and any rental vehicles used on those roads presumably must drive on the public Dalton Highway to get there, Spanos said.
But both those positions, he added, haven't been tested in court, which can be a contributing factor in the state's decision to settle a case for less money than it believed it was owed.
"The state and Delta Leasing both recognize that application of the rental vehicle tax raises legal issues that have not been addressed by the courts and both want to resolve the matter," the state law department said in its statement announcing last month's settlement.
Asked about complaints that the revenue department didn't properly notify companies like Delta Leasing at the inception of the tax in 2004, Spanos responded that the state tax division tried to alert affected businesses.
But, he added: "It's not the division's responsibility to determine if you owe tax. It's your own."
Other questions about Delta Leasing's settlement were raised by one of Natasha von Imhof's defeated primary opponents, Jeff Landfield, who said the timing of the state's announcement allowed von Imhof to escape criticism before the election.
Ken Alper, the state's tax director, said the initial settlement was signed by two top state officials in July; Delta Leasing, he added, didn't sign it until Aug. 17, the day after the primary election.
Rudi von Imhof referred questions about the settlement's timing to Marrs of Old Harbor Native Corp., Delta Leasing's majority owner.
Marrs, in a phone interview, said it was "purely up to us, as a board, to decide the timing of any of this."
The settlement decision was made by Delta Leasing's management committee, Marrs said, based on how Old Harbor wanted to structure its payments for tax purposes.
He said there was "nothing in particular" that determined the decision to sign the settlement the day after the election.
"It had nothing to do with Natasha or Rudi," Marrs said. "It's purely coincidental."