Chapter 3.40
PERSONAL PROPERTY TAX

Sections:

3.40.010    Property subject to taxation.

3.40.020    Exemptions.

3.40.030    Assessment return.

3.40.040    Tax situs of personal property.

3.40.050    Liability for and collection of.

3.40.060    Penalties and interest.

3.40.070    Classification of boats and vessels.

3.40.080    Classification of aircraft.

*    For statutory provisions granting the power to assess and collect taxes, see AS 29.35.170; for provisions governing municipal assessment and taxation generally, see AS 29.45.

    Prior legislation: Code 1974 §§ 3.24.060, 3.24.070, 3.24.080 and 3.24.090 and Ords. 83-53-O, 84-25-O, 96-21 and 2007-16.

3.40.010 Property subject to taxation.

Except as otherwise provided in this chapter, a personal property which has a tax situs within the borough is subject to taxation. Business personal property is taxable to the extent that a taxpayer’s total assessed value for all business personal property within the borough of Kodiak exceeds $20,000. Business personal property includes all personal property including, but not limited to, furniture, furnishings, fixtures, machinery, and equipment used by a business or in a business capacity. [Ord. FY2011-07 §2, 2010].

3.40.020 Exemptions.

A. Individual personal property utilized solely and exclusively for personal, nonbusiness, noncommercial, nonagricultural and nonincome producing uses or purposes is exempt from taxation under this chapter. This includes aircraft, boats and vessels used for nonbusiness, nonagricultural, noncommercial and nonincome producing purposes.

B. The first $20,000 of assessed valuation of business personal property owned by each taxpayer shall be exempt from borough property taxation. For a taxpayer with more than one business personal property tax account, the $20,000 exemption shall be distributed pro rata among all of the taxpayer accounts, based on the proportion of the assessed value in each account to the total assessed value of that taxpayer’s business personal property.

C. Pursuant to AS 29.45.050(b)(2), the inventories of businesses possessing a valid business license from the state of Alaska are exempt from the tax imposed by this chapter. As used herein, “inventories” means personal property in the hands of a retail or wholesale merchant held for sale or personal property held in the form of raw materials or component parts for the manufacture or production of goods.

D. Pursuant to AS 29.45.050(b)(2), fishing gear (i.e., nets, seines, crab pots, long lines, trawls) and any or all associated paraphernalia utilized for commercial fishing is exempt from property tax. [Amended during 7/11 supplement; Ord. FY2011-07 §2, 2010].

3.40.030 Assessment return.

Every person with ownership in business personal property shall submit to the borough assessor a personal property return of any property owned by him, or in which he has an interest, and of the property held or controlled by him in a representative capacity, in the manner prescribed, which return shall be based on property values existing as of the first day of January of the year for which the return is made. The person making the return in every case shall state an address to which all notices required to be given to him under this section may be mailed or delivered. The return shall show the nature; quantity; description; amount; value; purchase price, new or used; depreciable basis; and current condition of all personal property, the place where the property is situated, and said return shall be in such form and include such additional information as the assembly may prescribe, and shall be signed and verified under oath by the person liable, or his or its authorized agent or representative. Said return shall be filed on or before the fifteenth day of January of each tax year. The borough assessor may, by notice in writing to any person by whom a return has been made, require from him a further return containing additional details and more explicit particulars and, upon receipt of the notice, that person shall comply fully with its requirements within 30 days.

In the event of any person failing, refusing, or neglecting to make or file said personal property return of property owned by him, as required herein, the assessor shall make an assessment which shall be as fair and equitable as he is able to make from the best information in his possession concerning said property. [Ord. FY2011-07 §2, 2010; Ord. FY2011-05 §2, 2010; Ord. 92-25 §2, 1992; prior code Ch. 3 subch. 2 §1. Formerly §3.40.010. Code 1974 §3.24.010].

3.40.040 Tax situs of personal property.

A. Tax Situs. All personal property which has a tax situs within the borough on January 1st of the tax year is subject to taxation. “Tax situs” means the principal place where an item of personal property is located, having due regard to the residence and domicile of its owner, the place where it is registered or licensed, whether it is taxed by other municipalities, and any other factors which may indicate the principal location of the property.

B. Tax Situs, Conclusive Presumptions.

1. Tax situs shall be conclusively presumed to be within the borough when the property, although not within the borough on January 1st of the assessment year, either:

a. Has been or is usually, normally, or regularly kept or used within the borough;

b. Has been or is kept or used within the borough for any 90 days or more in the 12 months preceding the January 1st assessment; or

c. Has been or is kept or used within the borough for any length of time preceding January 1st of the assessment year if such presence or use is intended to be permanent; “permanent” in this subsection means for a period of 90 days or more.

2. Tax situs shall also be presumed conclusively to be within the borough where the ownership, maintenance, or use of such property requires a license or permit, and a license or permit has been issued by the state of Alaska or the borough or any other political subdivision within the borough, and:

a. The property is so licensed or permit so issued and either the actual residence address or the mailing address of the licensee or permittee, or of the permissive user thereunder, is within the borough; or

b. The property is so licensed or the permit so issued and the domicile of the licensee or permittee, or the permissive user thereunder, is in the borough; this subsection is to apply expressly to, but is not limited to, situations wherein the subject property is in the custody of persons in educational institutions outside of the borough; or

c. The property is so licensed or the permit is issued and the property is permanently outside the borough when such licensing frees the owner, user or custodian of liability for similar taxes in any other country, state, or political subdivision thereof. [Ord. FY2011-07 §2, 2010; Ord. 85-12-O §1, 1985. Formerly §3.40.015. Code 1974 §3.24.015].

3.40.050 Liability for and collection of.

A. The owner of personal property assessed is personally liable for the amount of taxes assessed against the property. The tax, together with penalty and interest, may be collected in a personal action brought in the name of the borough.

B. If the tax on personal property is not paid when due, the borough may, in addition to other remedies available, enforce the tax lien by distraint and sale of the property after first making demand of the person assessed for the amount of the tax, penalty, and interest. The demand shall be in writing addressed to the person whose name appears on the last assessment roll as the owner of the property, describing the personal property assessed and the amount of the tax, penalty, and interest and demanding that the total be paid within 10 days after service of the demand personally or by registered mail.

C. If the tax has not been paid after the expiration of 10 days from service of demand, the clerk may issue a warrant directing a peace officer to seize the personal property for which the tax was levied and to sell it at public auction after at least 15 days’ notice of the sale by posting and publication. If the proceeds from the property sold are not sufficient to satisfy the tax, penalty, interest and costs of sale, the warrant may authorize the seizure of other personal property sufficient to satisfy the tax, penalty, interest, and costs of sale. [Ord. FY2011-07 §2, 2010; Ord. 74-12-O §1, 1974; prior code Ch. 3 subch. 2 §2. Formerly §3.40.020. Code 1974 §3.24.020].

3.40.060 Penalties and interest.

A person who fails, refuses, or neglects to file a personal property return in accordance with KIBC 3.40.010 and 3.40.020 shall, in addition to other penalties provided by law, be liable for a penalty of 20 percent of the tax assessed, in accordance with AS 29.45.250. Said person shall pay interest at the rate of 12 percent per year, exclusive of penalty, from the due date until paid in full. This section shall apply to all persons having personal property within the borough, irrespective of residence. However, when such penalty and interest amount to $1.00 or less, there shall be assessed a minimum penalty of $1.00. A person who files a completed return after the filing deadline, but before the mailing of the assessment notices shall, in addition to other penalties provided by law, be liable for a penalty of five percent of the tax assessed against said personal property for that tax year. [Ord. FY2011-07 §2, 2010; Ord. 93-36 §4, 1993; Ord. 92-25 §2, 1992; Ord. 74-8-O §3, 1974; Ord. 69-4-O §1, 1969; Ord. 67-11-O §1, 1967; prior code Ch. 3 subch. 2 §3. Formerly §3.40.030. Code 1974 §3.24.030].

3.40.070 Classification of boats and vessels.

Pursuant to AS 29.45.050(b)(2), boats and vessels are classified for purposes of taxation as a special category and shall be taxed at the rate determined annually by the assembly during the budget adoption process for boats with an overall length longer than 20 feet, measured bow to stern, rather than on an ad valorem basis. [Ord. FY2011-07 §2, 2010; Ord. FY2006-10 §2, 2006; Ord. 85-3-O, 1985; Ord. 81-50-O §1, 1981. Formerly §3.40.050. Code 1974 §3.24.050].

3.40.080 Classification of aircraft.

A. Pursuant to AS 29.45.050(b)(2), for purposes of taxation, commercial aircraft that have been issued an N number by the Federal Aviation Administration (“FAA”) by January 1st of the tax year and are less than 12,500 pounds takeoff weight shall be totally exempted from ad valorem taxes and shall be taxed at the rate determined annually by the assembly during the budget adoption process.

B. The owner of record of an aircraft that has been dismantled, destroyed or crashed and the FAA N number has been retained by the aircraft’s owner of record may submit to the assessor proof of condition that would allow for taxation of that aircraft, if approved by the assessor, at a rate determined by the assembly during the budget adoption process. Aircraft for which such registration or licensing has lapsed or that has not passed the annual inspection required by the FAA shall not qualify on this basis alone for ad valorem taxation unless it has been dismantled, destroyed or crashed.

C. Commercial aircraft with a gross takeoff weight of more than 12,500 pounds shall be taxed on an ad valorem basis and in accordance with the Kodiak Island Borough landing schedule formula. The KIB landing schedule formula provides for the prorated calculation of scheduled aircraft by dividing the total hours in a year into the total time aircraft operated by a scheduled carrier are in the Kodiak Island Borough, and multiplying the result by the assessed value of each aircraft.

D. Definitions. For purposes of this section:

“Aircraft” means any engine powered contrivance invented, used, or designed to navigate, or fly in, the air and that is capable of being manned and is required by the FAA to be registered and certified in order to be manned.

“Commercial aircraft” means any aircraft transporting passengers and/or cargo or is employed for fish spotting, agricultural, aquacultural or other purposes for some payment, or other consideration, including money or services rendered.

“Crashed” means aircraft for which only parts remain that, due to their condition, can no longer be assembled to create any contrivable aircraft. This shall be evidenced by an FAA accident report and/or copy of an insurance claim that determines the aircraft to be a total loss.

“Destroyed” means aircraft that have been damaged by age, weather, neglect and/or external influences outside the owner’s control, and only unusable parts remain that, due to their condition, can no longer be assembled to create any contrivable aircraft. This shall be evidenced by photographs and a physical inspection by the borough assessing staff appraiser if deemed necessary by the borough assessor.

“Dismantled” means aircraft that have been voluntarily disassembled and only parts remain that can no longer be assembled to create any contrivable aircraft. Evidence such as photographs and a physical inspection by the borough assessing staff appraiser shall be provided or allowed if deemed necessary by the borough assessor.

E. An aircraft owner may appeal the determination of the borough assessor under subsections B and C of this section using the same procedures for appeal of real and personal property assessments as set out in KIBC 3.35.040(C)(3) and 3.35.050(C). [Ord. FY2011-07 §2, 2010].