The Kenai City Council with meet on Wednesday to discuss an ordinance that could help take a big load off of business owners.
The ordinance (3382-2023 ), would amend Kenai Municipal Code to provide taxation of real and personal property. It would provide an exemption on the first $100,000 of assessed valuation.
This does not include motor vehicles and watercraft owned by taxpayers, and it does also not include making housekeeping changes.
According to City Manager Terry Eubank, the ordinance means that it would provide an exception for the first $100,000 of personal property within the city of Kenai to taxpayers. This would be intended to help business owners in Kenai. Personal property would be considered things such as the furniture inside of a house, computers, and display cases for businesses.
Eubank says that this ordinance is very unique, because it’s being co-sponsored by the entire council.
“It’s got really broad support at the council level, and I think it’s just a continuation of a lot of things to City’s doing to support our local businesses,” said Eubank.
Currently, the only personal property taxes is paid by businesses. This is due to the fact that they are not exempt under the Alaska statute.
“So what this $100,000 does, or this 100,000 owner exemption for personal property is going to provide, is an exemption for businesses. Since individuals everything is already exempt, it’s going to provide an exemption for businesses. Can’t really call it a business personal property exemption, but that’s really the only thing that’s going to be affected by this,” said Eubank. (1:07)
This tax exemption will reduce the tax revenue. According to Eubank, the current curve mill rate 4.35 mills. One mill is $100 per $100,000 of assessed value. So the 4.35 mills combines with the 100,000 on this tax exemption, it would allow businesses to save up to $435.
“This is going to exempt just over just over $8 million worth of of taxable value right now. So the total cost of this or total reduction of revenue to the city is about 35, a little less than $35,000,” said Eubank.
While the city may see a reduction in tax revenue, the council believes it is important to invest in the businesses of the community. The hope is that in time, more business will be able to locate to the Kenai Peninsula.
This ordinance will be discussed at Wednesday’s Kenai City Council meeting, and Eubank welcomes anyone to come and voice their thoughts on the matter.