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Tax cuts for planes, new tax on boats proposed

Posted: Thursday, November 08, 2001

Juneau Assembly members on Wednesday hammered out a proposal that would decrease aircraft property taxes and implement a new tax on commercial passenger boats.

Local air carriers objected to assessments at a Board of Equalization meeting in May, arguing that planes and helicopters are taxed at a higher rate than other business property because they are valuable and easy to find. Assembly members decreased assessed values on aircraft by 15 percent, and continued discussions this fall.

A proposal that emerged from Wednesday's Finance Committee meeting would reduce property taxes on aircraft by 60 percent, setting up a tax schedule that would vary by aircraft weight. For commercial passenger boats, the city would implement a tax that ranges from $120 for a 20- to 25-foot boat to $720 for vessels 100 feet or longer.

The city estimates the new tax would apply to 170 boats.

The new boat tax would apply to charter fishing boats, but not commercial fishing boats such as seiners and gillnetters. Assembly member Marc Wheeler suggested additional discussion with charter operators and boat owners about the proposal.

For air carriers, the issue is a legal question of equity, Wings of Alaska President Bob Jacobsen said. It isn't the position of air carriers to tax boats, he told Assembly members.

"The CBJ for some time has imposed a discriminatory property tax on air carriers as compared to other commercial and industrial property within the borough," he said in an interview. "We have simply asked for equity and compliance with federal law. It's always better to negotiate rather than litigate."

The proposals now go to the full Assembly for consideration, Finance Committee Chairman Jim Powell said.

The new boat tax should generate $60,000 a year, according to the city. The current revenue from aircraft is about $297,000. With the tax cut, revenue from aircraft would be $120,000, according to city Finance Director Craig Duncan.

An earlier estimate placed current tax revenue from aircraft at about $282,000, and the new number drew a heated response from Assembly member Dale Anderson, who directed his comments to Duncan.

"We need accurate information ahead of time," he said. "I'm getting sick and tired of inaccurate information."

At the end of the meeting, Anderson asked for an executive session to discuss personnel issues involving the city manager and finance director. Assembly members didn't act on his request.

In other action, Assembly members tabled proposals to decrease the sales tax exemption cap from $7,500 to $3,000 and to implement a local motor vehicle registration tax. A proposal to implement a 75-cent monthly surcharge on cell phones, to get revenue for 911 emergency services, was forwarded to the full Assembly.

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Joanna Markell can be reached at joannam@juneauempire.com.



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