In a 5-4 vote Monday night, the Juneau Assembly denied a $1,200-a-year property tax exemption request from the Juneau Empire.
Morris Communications Corp., the Empire's parent company, applied for the exemption under an ordinance that allows businesses to take a property tax exemption on equipment used for manufacturing.
"I just don't think when the Assembly came up with the exemption, we meant for this," said Assembly member Marc Wheeler. "Maybe if they were making the paper."
The exemption for the Empire would have resulted in a tax break of about $1,200 per year for five years. The Empire pays about $80,000 in property taxes annually.
City officials said the ordinance was meant to stimulate small manufacturing operations in Juneau, and applied to businesses that manufacture products and ship them outside.
Another criterion is that local manufacturing reduces importation of an outside product. For example, the Assembly granted such an exemption to Alaska Brewing Co., which manufactures and exports beer.
The Empire exports about 7 percent of the daily newspapers it prints. In an e-mail message, Morris accounting representative Ann Mims wrote that the corporation applied for the exemption because manufacturing the newspaper in Juneau "reduces importation of goods from outside the CBJ as it is not necessary for the population of Juneau to seek an alternative newspaper manufactured Outside."
In a memo to City Manager Rod Swope, City Assessor Tom Pitts recommended against granting the exemption, saying that printing a newspaper does not meet the criterion for manufacturing, which requires that materials be transformed.
"With the Juneau Empire, it is difficult to say that they actually transform materials (paper and ink) into a new product having a distinct character," Pitts wrote.
Some Assembly members spoke in favor of granting the exemption, saying the ordinance was unclear.
"It's not much money, but it's the principle of the thing," said Assembly member Randy Wanamaker.
Wanamaker, Dale Anderson, Jeannie Johnson and Stan Ridgeway voted in favor of the exemption. Voting against were Wheeler, Ken Koelsch, Merrill Sanford, Jim Powell and Mayor Sally Smith.
Morris Communications President William Morris issued a statement saying the application was appropriate.
"The management does not apologize for applying for this tax incentive that promotes the manufacturing of products in the city of Juneau," he wrote.
Julia O'Malley can be reached at firstname.lastname@example.org.
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