|
Alaska Legislature Passes Comprehensive Local Tax Exemption Legislation to Benefit Farmers and Homebuyers
Nikiski, AK – Prior to the recent conclusion of its session in May, the Alaska Legislature passed Senate Bill 179, sponsored by Senator Jesse Bjorkman, R-Nikiski. This legislation, a result of extensive discussions with realtors, farmers, and municipal representatives, prohibits local governments from adding transfer taxes to the sale of houses and other real property, improves the program that provides property tax breaks to farmers, allows municipalities to defer taxes on property used for economic development, and improves the required assessor qualifications and property tax appeals process.
As introduced, SB 179 prohibits municipalities and the state from imposing transfer taxes, fees, or other assessments on the sale, grant, assignment, or transfer of real property. By eliminating these additional costs, the bill seeks to make homeownership more affordable for all Alaskans, particularly benefiting young families, first-time homebuyers, and seniors on fixed incomes. Representative Julie Coulombe, R-Anchorage, introduced companion legislation, HB 134, in the House.
"This is a step forward in making homeownership more attainable for all Alaskans," said Senator Bjorkman. "By prohibiting transfer taxes and fees on real estate transactions, we are ensuring that families, especially young and first-time homebuyers, are not burdened with additional costs. This legislation will help maintain the equity in seniors' homes and make the dream of homeownership more realistic for everyone in our state."
Senate Bill 179 underwent significant amendments during the final days of the legislative session. Three provisions that had previously passed the Senate were added to the bill in the House, further enhancing its scope and impact.
Senate Bill 161, also sponsored by Senator Bjorkman, aims to bolster Alaska's food security by amending state laws to support local farmers. The policy expands the mandatory farmland property tax break to include farm-related structures and updates the qualification criteria to a $2,500 annual sales requirement, coupled with filing an IRS Schedule F. This amendment aligns with recommendations from the Alaska Food Strategy Task Force 2023 Report.
“Recognizing Alaska's heavy reliance on imported food, amending Alaska’s farm tax will make the local food system more resilient,” said Senator Bjorkman. “It also aims to lower entry barriers for new farmers, protect their privacy, and allow municipalities to extend property tax exemptions to non-food producing farms, promoting diverse agricultural opportunities.”
Senate Bill 242, sponsored by Senator Jesse Kiehl, D-Juneau, along with the House companion HB 347 by Representative Julie Coulombe, R-Anchorage, ensures a fair process in property tax assessments for Alaskans. It requires local governments to use a qualified assessor and published standards to figure out what property is worth. It improves the appeal process by forbidding the government from raising an assessment in the middle of an appeal, and requires a written explanation if the final decision deviates from a fee appraisal. The bill also changes the default for hearing appeals from elected assemblies to an appointed board of equalization.
"Alaskans deserve a fair shake when they disagree with city hall,” said Senator Kiehl. “When the rules are clear and transparent, the staff are qualified, and a taxpayer’s rights are protected, Alaskans can better trust that their taxes are fair."
Lastly, Senate Bill 179 includes a portion of Senate Bill 77, by Senator Forrest Dunbar, D-Anchorage. Senate Bill 77 allows municipalities to fully exempt property taxes for economic development purposes. Currently, municipalities may only exempt the portion of property taxes above the district’s required local contribution. It also removes this limit for economic development properties. This exemption will not impact local contribution to education funding to ensure school districts are held harmless.
This provision empowers municipalities to completely exempt property taxes for economic development, extending beyond the current limitation, which only permits exemptions above the district’s required local contribution,” said Senator Dunbar. “I am hopeful that this provision will help communities like Anchorage build more housing, as we know there is a housing supply crisis in the Municipality today.”
Senate Bill 179 now heads to the Governor for his signature.
###
| 
