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RE: Personal Property Tax?
by Dennis Finegan
Director of Assessment, Ketchikan Gateway Borough


November 19, 2004

Taxation goes back at least as far as Biblical times. In those days the king told the tax collector how much revenue he needed. Revenue collected beyond what was specified by the king was kept by the tax collector.

Times have changed. In Alaska, statutes outline the taxation process: assessment, levy, and collection. Borough code follows State of Alaska statutes. Alaska Statutes parallel those of many other states and provinces.

In Alaska, boats, planes, and vehicles, as well as personal property used with the intent of producing income, may be taxed. Unlike historic practices in some places, other personal property is exempted.

Addressing the question posed: yes, an attorney pays tax on law books. But there is no tax levied upon a professional's college education. A professor of economics might tell you that this function would be served via a Personal Income Tax.

The first step in the assessment process is to identify taxable property. Business-use personal property, locally called Business/Personal property, is identified by mailing declaration forms to entities noted in local publications such as newspapers and phone books, radio, business license directories, recorded documents, and by routine physical area reviews.

Business/Personal property is valued by the department with an allowance for depreciation. (ad valorem taxation: according to value) Each year elected officials determine the levy or millage rate to be applied to taxable property. Tax collection is the responsibility of the Finance Department.

When a vehicle is licensed, local property tax is part of the fee collected. Ketchikan Gateway Borough uses the state collection mechanism administered by the Motor Vehicles Division of the Department of Public Safety.

Taxation issues such as who should or shouldn't be taxed, and the fairness of a tax (as in regressive or progressive taxation), has been a topic of discussion for centuries. Local governing bodies have the responsibility for determining how tax dollars are spent. However, these bodies must make allocations with regard to many parameters and mandated state and federal requirements.

Historically, property tax is a local tax which relates to benefits pertinent to the property's location. As in many jurisdictions throughout the country, borough property tax dollars are allocated primarily to education. In addition, service areas may levy property taxes for fire and EMS protection and services such as roadway snow removal.

Back in 1080, William the Conqueror commissioned an extensive census to help him gather taxes from the subjects he conquered in the Norman Invasion of 1066. The resulting listing was called the Doomsday Book, " named because as God would not overlook you, neither would the tax collector." (confirmed per website of Shannon Duffy, Ph.D., Loyola University.)

Some nine hundred years later, in the 1990's, England was computerizing their listing of taxable property. Their goal date was the year 2000. The project became known as "Doomsday 2000."

And so continues the legacy of taxation. In its present form, borough property taxes, both real and personal, help fund local school and service area districts.

In summary, the questions and answers are as follows:

1) What right does the Borough/City have to tax tools?

A: Under state statutes, personal property is taxable. In Ketchikan, personal property used in business, such as tools, law books, desks, display cases etc. are taxable.

2) Why is there a tax on tools that were purchased only to last a few years?

A: The value of Business/Personal property is adjusted for depreciation.

3) How does the Borough know what I have?

A: You are required by law to file a return/declaration. The Borough may also perform its own review and file a return on your behalf should you fail to do so, or should your return be inaccurate.

4) Are attorney's taxed on their tools (law books)?

A: Yes

5) Do attorneys charge sales tax?

A: Yes

6) What about tour bus operators that do not have to pay tax on their busses?

A: They do pay tax. It is part of the registration fee.

Dennis Finegan
Director of Assessment, Ketchikan Gateway Borough
Ketchikan, AK - USA


Related Viewpoint:

Personal Property Tax? by Robert McRoberts - Ketchikan, AK - USA



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