Assembly to reconsider property tax relief for businesses affected by pandemic closures
ANCHORAGE, Alaska (KTUU) - An ordinance that would offer property tax relief to businesses shut down by state or local COVID-19 mandates is set to be reconsidered by the Anchorage Assembly after it narrowly failed at an earlier meeting.
The ordinance, AO 2020-117, would offer an 8%-16% discount, with a maximum of $5,000 on personal property taxes for those businesses based on how long they were shut down. Personal property for businesses refers to inventory or equipment, which businesses weren’t able to move or use during Anchorage’s “hunker down” phase in the spring.
“It just seemed unfair to me that we would require our businesses to pay an inventory tax on an inventory that they were never allowed to actually move or sell,” said Assembly Member Crystal Kennedy, one of the ordinance’s sponsors.
The ordinance failed in a 5-5 vote at the assembly’s Nov. 4 meeting, with an 11th vote unavailable while Austin Quinn-Davidson serves as acting mayor. But one of the “no” votes, Assembly Member Meg Zaletel, moved to reconsider shortly after.
“I slept on it, and I thought, ‘you know, this is actually a really great idea, I get the intent, we just need to tweak it some more, and spend some more time with it,’” she said.
She added that her initial opposition to the ordinance, which other members echoed, were concerns over leaving a hole in the Municipality’s revenues. The other major concern was raised by the Treasury Department, that the original process for applying would leave the city guessing at how much it would actually get from the taxes.
“We could kind of guess, but we’re not certain on how much it could be in the original iteration,” Zaletel said. “And so the idea is to find a way to either make that more predictable or to find a funding source.”
A new version of the ordinance, sponsored by Kennedy and Zaletel seeks to do just that. It simplifies the process for applying the discount and lays out a process for filling the revenue gaps.
“It tees it up ready to go if we find more federal relief coming due to COVID-19, or if there are state funds available,” Zaletel said.
The new process also changes it from a separate application that needs to be confirmed by the treasury department to a self-verified form. The ordinance clarifies that submitting a false form will be treated as a submittal of a false tax return.
While it’s a departure from the original version, which would have reduced the size of the tax cap, Kennedy said she’s hopeful it will pass this time around.
“I think it’s important for the assembly, especially to realize that our businesses are still hurting, and a lot of them have not yet gotten the relief that we thought they should have,” she said. “And this would just be one more way to try to get some of that relief to those businesses.”
Copyright 2020 KTUU. All rights reserved.