Business owners in Kenai will save up to $435 in taxes next year, thanks to a decision by the Kenai City Council in its meeting Dec. 20.
City administration proposed an exemption of the first $100,000 in value of personal property, not counting motor vehicles or watercraft. As city manager Terry Eubank explained, the exemption will really only apply to businesses, since Alaska state law already offers that exemption on personal property for individuals.
Eubank said the idea came from a local business owner, as Kenai looks for ways to improve the business climate in the city. With the city’s property tax rate of 4.35 mills, the tax exemption could save business owners up to $435. Looking at the previous year’s revenue, that could mean a $35,000 annual loss in taxes for the city. But Eubank says he doesn’t see it as a loss.
“I don’t look at it as necessarily a total revenue decrease. I think this is an investment by the city and the community in local businesses. It’s a continuation of the city’s initiative to attract more business and be business friendly," Eubank said.
The exemption mirrors existing policies in Soldotna and the Kenai Peninsula Borough. Kenai Vice Mayor Henry Knackstedt says he likes that Kenai will do the same.
“It’s not very common for a municipality to reduce taxes. We contemplate maybe raising them sometimes but (not) to reduce them. What this does is puts Kenai on a level playing field, like the city manager said, with the other municipalities, and I think that’s appropriate,” Knackstedt said.
The exemption goes into effect Jan. 19.
