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City of Ketchikan Taxes
By Douglas Thompson


September 28, 2012


Well the city taxes are coming due once more.  It is frustrating to give hard earned money to the city manager to waste.  It is more so when one such tax is illegal.  I refer to the city boat tax.  A tax that the borough has dropped for its residents even though their boats may be in city harbors.  Seems highly discriminatory although that is not why I refer to it as illegal.  The city wishes us as citizens to follow its enacted statutes but they in turn do not seem to feel obligated to follow the higher laws that govern them (state and federal). 

A source that was on the council when the boat tax was enacted told me that the city was told by the State that the only way that a legal boat tax could be written was to "either be by appraised value or by tonnage".  The city chose to use net tonnage.  The tax is $25 on vessels less than five net tons and $75 on those over.  This would appear fine until the willful ignoring of the law (Code of Federal Regulations) by them comes into play.  The borough tax department through incompetence or laziness has made out of thin air a rule that boats over 31 feet are automatically over five net tons and those less than 31 are under (stated to me in a letter from the "Finance Director"), this further undermines the ordinance as the State clearly stated that vessels could not be taxed by footage, and the tax department of the borough has no authority to change ordinance, statute or law.  This does not adhere to the legal definition of marine net tonnage as defined by the feds with force of law.  As required by CFRs a vessel must be measured by an authorized entity (the nearest is in Seattle to my knowledge) to determine its tonnage.  This is called admeasuring and is a complex formula with fuel tankage, crew spaces, engine spaces, etc. exempt.  Basically only revenue generating spaces count toward tonnage (It is much more complex than this but for our purpose [and to give the council a chance to comprehend] we will simplify).  Thus almost all pleasure craft do not qualify for net tonnage rating no matter their length.  Those commercial vessels that are undocumented would have to be individually measured to establish their net tonnage.  This would be at an approximate rate of $2000 per vessel plus travel expenses for the measuring agent.  Since any small movement of bulkheads, cutting of 'tonnage opening', or additional modification can drastically change that tonnage each vessel must be measured and no rating can be established for a 'class' of vessel (i.e. a 32' Bayliner).  The huge majority of pleasure craft would rate a '0' net tonnage class and are thereby exempt from city boat tax.

Since Net Tonnage (written in the city tax) is specified and since that term has a federal definition found in the CFRs basically as illustrated above the city tax does not comply with the federal law and in fact conflicts with it.  When such a conflict occurrs the lower body's ordinance is null and void.  The city was advised how not to write the ordinance but because they did not do their homework they have violated Federal law.  Needless to mention the Federal Law was in place long, long before the 'boat tax'. 

The simplest way to correct this situation is for the city to abolish this inept ordinance totally as the borough has already done.  Their only other choice is to rewrite the ordinance and pay for the admeasuring of every vessel to which the ordinance applies that does not already have an established net tonnage (this will cost them far more than the tax will generate). 

The question of repayment of back taxes collected under this illegal ordinance also arises.  The lesson being that due diligence should be done before passing any ordinance.  The other lesson is that the council no matter how imperious their ego and that of the manager still has to follow law.  If they would quit wasting tax money they wouldn't have to look for any and all means to raise taxes no matter how questionable.

In an aside; this admeasuring federal law is why the mega yachts cruising by are considered under 100 ton and therefore exempt from taking on a certified pilot when tranversing the inside passage of Alaska.  It is also how the old Island Trader advoided more expensive manning requirements and stayed under 100 ton, ditto the small "Explorer" cruise ships.  It is why a vessel many times larger than another may have a smaller tonnage rating. 


Douglas Thompson
Ketchikan, AK

Received September 28, 2012 - Published September 28, 2012



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