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- Alaska Statutes.
- Title 29. Municipal Government
- Chapter 45. Municipal Taxation
- Section 50. Optional Exemptions and Exclusions.
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Section 52. Tax Deferral for Primary Residences.
AS 29.45.050. Optional Exemptions and Exclusions.
- (a) A municipality may exclude or exempt or partially exempt residential property from taxation by ordinance ratified by
the voters at an election. An exclusion or exemption authorized by this subsection may be applied with respect to taxes
levied in a service area to fund the special services. An exclusion or exemption authorized by this subsection may not
exceed the assessed value of $20,000 for any one residence.
- (b) A municipality may by ordinance
- (1) classify and exempt from taxation
- (A) the property of an organization not organized for business or profit-making purposes and used exclusively for
community purposes if the income derived from rental of that property does not exceed the actual cost to the owner of
the use by the renter;
- (B) historic sites, buildings, and monuments;
- (C) land of a nonprofit organization used for agricultural purposes if rights to subdivide the land are conveyed to the
state and the conveyance includes a covenant restricting use of the land to agricultural purposes only; rights conveyed
to the state under this subparagraph may be conveyed by the state only in accordance with AS 38.05.069(c);
- (D) all or any portion of private ownership interests in property that, based upon a written agreement with the University
of Alaska, is used exclusively for student housing for the University of Alaska; property may be exempted from taxation
under this subparagraph for no longer than 30 years unless the exemption is specifically extended by ordinance adopted
within the six months before the expiration of that period;
- (2) classify as to type and exempt or partially exempt some or all types of personal property from ad valorem taxes.
- (c) The provisions of (a) of this section notwithstanding,
- (1) a borough may, by ordinance, adjust its property tax structure in whole or in part to the property tax structure of a
city in the borough, including but not limited to, excluding personal property from taxation, establishing exemptions,
and extending the redemption period;
- (2) a home rule or first class city has the same power to grant exemptions or exclude property from borough taxes that it
has as to city taxes if
- (A) the exemptions or exclusions have been adopted as to city taxes; and
- (B) the city appropriates to the borough sufficient money to equal revenues lost by the borough because of the exemptions
or exclusions, the amount to be determined annually by the assembly;
- (3) a city in a borough may, by ordinance, adjust its property tax structure in whole or in part to the property tax
structure of the borough, including but not limited to exempting or partially exempting property from taxation.
- (d) Exemptions or exclusions from property tax that have been granted by a home rule municipality in addition to
exemptions authorized or required by law, and that are in effect on September 10, 1972, and not later withdrawn, are
not affected by this chapter.
- (e) A municipality may by ordinance classify and exempt or partially exempt from taxation privately owned land, wet land
and water areas for which a scenic, conservation, or public recreation use easement is granted to a governmental body.
To be eligible for a tax exemption, or partial exemption, the easement must be in perpetuity. The easement is
automatically terminated before an eminent domain taking of fee simple title or less than fee simple title to the
property, so that the property owner is compensated at a rate that does not reflect the easement grant. The
municipality may provide by ordinance that, if the area subject to the easement is sold, leased, or otherwise disposed
of for uses incompatible with the easement or if the easement is conveyed to the owner of the property, the owner must
pay to the municipality all or a portion of the amount of the tax exempted, with interest.
- (f) A municipality may by ordinance exempt from taxation all or part of the increase in assessed value of improvements to
real property if an increase in assessed value is directly attributable to alteration of the natural features of the
land, or new maintenance, repair, or renovation of an existing structure, and if the alteration, maintenance, repair,
or renovation, when completed, enhances the exterior appearance or aesthetic quality of the land or structure. An
exemption may not be allowed under this subsection for the construction of an improvement to a structure if the
principal purpose of the improvement is to increase the amount of space for occupancy or nonresidential use in the
structure or for the alteration of land as a consequence of construction activity. An exemption provided in this
subsection may continue for up to four years from the date the improvement is completed, or from the date of approval
for the exemption by the local assessor, whichever is later.
- (g) A municipality may by ordinance exempt from taxation all or part of the increase in assessed value of improvements to
a single-family dwelling if the principal purpose of the improvement is to increase the amount of space for occupancy.
An exemption provided in this subsection may continue for up to two years from the date the improvement is completed,
or from the date of approval of an application for the exemption by the local assessor, whichever is later.
- (h) A municipality may by ordinance partially or wholly exempt land from a tax for fire protection service and fire
protection facilities and may levy the tax only on improvements, including personal property affixed to the
improvements.
- (i) A municipality may by ordinance approved by the voters exempt from taxation the assessed value that exceeds $150,000
of real property owned and occupied as a permanent place of abode by a resident who is
- (1) 65 years of age or older;
- (2) a disabled veteran, including a person who was disabled in the line of duty while serving in the Alaska Territorial
Guard; or
- (3) at least 60 years old and a widow or widower of a person who qualified for an exemption under (1) or (2) of this
subsection.
- (j) A municipality may by ordinance approved by the voters exempt real or personal property in a taxing unit used in
processing timber after it has been delivered to the processing site from up to 75 percent of the rate of taxes levied
on other property in that taxing unit. An ordinance adopted under this subsection may not provide for an exemption
that exceeds five years in duration. In this subsection "taxing unit" means a municipality and includes
- (1) a service area in a unified municipality or borough;
- (2) the entire area outside cities in a borough; and
- (3) a differential tax zone in a city.
- (k) A municipality may by ordinance approved by the voters exempt from taxation pollution control facilities that meet
requirements of the United States Environmental Protection Agency or the Department of Environmental Conservation. An
ordinance adopted under this subsection may not provide for an exemption that exceeds five years in duration.
- (l) A municipality may by ordinance exempt from taxation an interest, other than record ownership, in real property of an
individual residing in the property if the property has been developed, improved, or acquired with federal funds for
low-income housing and is owned or managed as low-income housing by the Alaska Housing Finance Corporation under AS 18.55.100
- 18.55.960 or by a regional housing authority formed
under AS 18.55.996
. However, the corporation may make payments to the municipality or political subdivision for improvements, services,
and facilities furnished by it for the benefit of a housing project, and this subsection does not prohibit a
municipality from receiving those payments or any payments in lieu of taxes authorized under federal law.
- (m) A municipality may by ordinance partially or totally exempt all or some types of economic development property from
taxation for up to five years. The municipality may provide for renewal of the exemption under conditions established
in the ordinance. However, under a renewal, a municipality that is a school district may only exempt all or a portion
of the amount of taxes that exceeds the amount levied on other property for the school district. A municipality may by
ordinance permit deferral of payment of taxes on all or some types of economic development property for up to five
years. The municipality may provide for renewal of the deferral under conditions established in the ordinance. A
municipality may adopt an ordinance under this subsection only if, before it is adopted, copies of the proposed
ordinance made available at a public hearing on it contain written notice that the ordinance, if adopted, may be
repealed by the voters through referendum. An ordinance adopted under this subsection must include specific eligibility
requirements and require a written application for each exemption or deferral. In this subsection "economic development
property" means real or personal property, including developed property conveyed under 43 U.S.C. 1601 et seq. (Alaska
Native Claims Settlement Act), that
- (1) has not previously been taxed as real or personal property by the municipality;
- (2) is used in a trade or business in a way that
- (A) creates employment in the municipality;
- (B) generates sales outside of the municipality of goods or services produced in the municipality; or
- (C) materially reduces the importation of goods or services from outside the municipality; and
- (3) has not been used in the same trade or business in another municipality for at least six months before the application
for deferral or exemption is filed; this paragraph does not apply if the property was used in the same trade or
business in an area that has been annexed to the municipality within six months before the application for deferral or
exemption is filed; this paragraph does not apply to inventories.
- (n) A municipality may by ordinance classify as to type inventories intended for export outside the state and partially or
totally exempt all or some types of those inventories from taxation. The ordinance may provide for different levels of
exemption for different classifications of inventories. An ordinance adopted under this subsection must include
specific eligibility requirements and require a written application, which shall be a public document, for each
exemption.
- (o) A municipality may by ordinance partially or totally exempt all or some types of deteriorated property from
taxation for up to 10 years beginning on or any time after the day substantial rehabilitation, renovation, demolition, removal, or
replacement of any structure on the property begins. A municipality may by ordinance permit deferral of payment of taxes on all or some
types of deteriorated property for up to five years beginning on or any time after the day substantial rehabilitation, renovation,
demolition, removal, or replacement of any structure on the property begins. However, if the entire ownership of property for which a
deferral has been granted is transferred, all tax payments deferred under this subsection are immediately due, and the deferral ends.
Otherwise, deferred tax payments become due as specified by the municipality at the time the deferral is granted. The amount deferred
each year is a lien on that property for that year. Only one exemption and only one deferral may be granted to the same property under
this subsection, and, if an exemption and a deferral are granted to the same property, both may not be in effect on the same portion of
the property during the same time. An ordinance adopted under this subsection must include specific eligibility requirements and require
a written application for each exemption or deferral. An application for a deferral must specify when payment of taxes for each year of
deferral will become due, together with an explanation of the reasons for each proposed date for consideration by the municipality. In
this subsection, "deteriorated property" means real property that is commercial property not used for residential purposes or that is
multi-unit residential property with at least eight residential units, and that meets one of the following requirements:
- (1) within the last five years, has been the subject of an order by a government agency requiring environmental
remediation of the property or requiring the property to be vacated, condemned, or demolished by reason of
noncompliance with laws, ordinances, or regulations;
- (2) has a structure on it not less than 15 years of age that has undergone substantial rehabilitation, renovation,
demolition, removal, or replacement, subject to any conditions prescribed in the ordinance; or
- (3) is located in a deteriorating or deteriorated area with boundaries that have been determined by the municipality.
- (p) A municipality may by ordinance partially or totally exempt from taxation a private leasehold, contract, or other
interest held by or through an applicant or proposed applicant in any property, assets, project, or development project
owned by the Alaska Industrial Development and Export Authority under AS 44.88. Nothing in this subsection prohibits a municipality from
entering into an agreement and receiving payments in lieu of taxes authorized under AS 44.88.140
(b).
- (q) A municipality may by ordinance partially or totally exempt from taxation land from which timber is harvested that is
infested by insects or at risk of being infested by insects due to an infestation in the area in which the land is
located. A municipality may provide that an exemption for land under this subsection applies only to increases in
assessed value that result from the timber harvest. A municipality may by ordinance partially or totally exempt from
taxation improvements to real property, including personal property affixed to the improvements, if the improvements
are
- (1) located on land from which timber is harvested that is infested by insects or at risk of being infested by insects due
to an infestation in the area in which the land is located; and
- (2) used for or necessary to the harvest of the timber that is infested by insects or in danger of insect infestation.
- (r) A municipality may by ordinance exempt from taxation an amount not to exceed $10,000 of the assessed value of real
property owned and occupied as a permanent place of abode by a resident who provides in the municipality volunteer (1)
fire fighting services and is certified as a fire fighter by the Department of Public Safety, or (2) emergency medical
services and is certified under AS 18.08.082
. If two or more individuals are eligible for an exemption for the same property, not more than two exemptions may be
granted.
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