"An Act relating to a mandatory property tax exemption for certain private property interests on military bases or installations; relating to an optional exclusion or exemption from municipal taxation for residential property; relating to an exemption from and deferral of municipal property taxes on certain types of deteriorated property; and providing for an effective date."

SB 136 amends current statues to allow for a residential property tax exemption of up to $20,000 on residential property, to give local governments flexibility in taxing decisions. It also clarifies that municipalities may apply the exemption to service areas.

The bill also extends the date for deteriorated properties to obtain exemptions by five years (from 2006 to 2010) and adds "demolition, removal" as an accepted activity on the property. Finally, the bill establishes a mandatory property tax exemption for certain private property interests on military bases.

Five municipalities offer this residential property tax exemption: Bristol Bay Borough; Kenai Peninsula Borough; Fairbanks North Star Borough; North Slope Borough; and the City of Valdez.

In 2002, the voters on the Kenai Peninsula rejected an initiative that would have restricted food items from sales taxes. Argument in opposition to the initiative was that the sales tax was a mechanism for obtaining fees from visitors. The logic of that was disputed when it was pointed out that residents pay the same tax.

Providing the local governments the ability to increase the property tax exemption up to $20,000 allows the local government flexibility so they could still collect sales taxes from visitors and then provide tax relief from residents.

Extending the deteriorated properties exemption date provides for completion of the process begun to renovate and improve the facilities, thereby adding to the local property tax roles.

# # #

68 Viewer(s)