The Kodiak Island Borough is currently in the middle of sending out notices to businesses for its Personal Property Tax, but this year it’s working to improve its system.
The Kodiak Island Borough Personal Property Tax has a misleading name. That’s what Bill Roberts, the borough’s assessor told the Kodiak Island Borough Assembly at a recent work session.
“Personal Property Tax is a misnomer these days. It used to be that we had personal property, you paid it on your four wheelers and skiffs and all that stuff. All of that over the years has gone away.”
Roberts explained the tax isn’t applied to individuals anymore. Instead, it just applies to businesses. The assessor’s office is working to make the process of collecting the tax fairer for the hundreds of businesses affected by it in the region
The Personal Property Tax isn’t applied to property like buildings or land. Instead, it is levied on things like computers, cars and other equipment used to run a company. Roberts says there are exceptions though, like a store’s inventory, fishing boats, and some commercial planes.
The borough also gives companies a tax exemption on the first $20,000 of property, which is to help the region’s smaller businesses. Roberts says it’s important for companies to be honest about their equipment because they self-report the Personal Property Tax.
“We don’t go out there and enter everybody’s business and write down everything and then go back and appraise it. It is ‘here’s your notice, here’s what you reported last year, cross off what’s missing, add new stuff.’ And as you can see there’s a lot of room for abuse on that.”
To make the tax more equitable for businesses, Roberts says he’s assigning four appraisers to work on the Personal Property Tax this year. In the past, only one appraiser had been assigned to the job. This increase of appraisers will help keep businesses to a similar standard.
The assessor’s office will also be cross-checking the value of items reported with a standardized price list of equipment. Instead of relying on a business owner’s word, appraisers will be able to easily find an item’s market value and ensure businesses are reporting all the equipment they’ve had in the past.
Roberts says this will be especially helpful with tracking the property of local vacation rentals
“Some of them have kayaks, some of them have freezers, all of them have furniture, which is part of the business.”
Roberts says the Personal Property Tax will end up earning the borough around $1.3 million, which is about a tenth of its tax revenue. The deadline for businesses to submit their list of equipment to the borough is January 15th, 2018.