The Office of the State Assessor (OSA) advises and assists municipalities and constituents on assessment and taxation issues, which are codified and referenced in the Alaska Statutes. New legislation potentially affecting property taxation will be highlighted here, and comprehensive reference materials to all current and repealed legislation can be found by accessing the information basis of the Alaska State Legislature.
This optional exemption was adopted to authorize municipalities to exempt or partially exempt for up to 10 years property in a military facility zone that creates or supports industry, development, or educational or training opportunities. This legislation became effective October 5, 2014.
This optional exemption was adopted authorizing municipalities by ordinance to classify and exempt, or partially exempt, from taxation all or a portion of privately owned real property rented or leased for use as a charter school established under AS 14.03.250. This legislation was actually codified in error as AS 29.45.050(v), and is expected to be corrected via manifest error to AS 29.45.050(w). The relevant legislation became effective September 19, 2014, and can be located via the hyperlink above.
The statutory tax cap outlined in AS 29.45.080 and 29.45.090, also commonly known as the 225% tax cap formula, was modified by making the percentage applied to the tax base vary according to the total tax rate of a municipality. This tax cap percentage is a key component of the 30-mill tax limit on the operating budget. This change will allow municipalities the option of collecting more property tax revenues for their operating budgets as the total tax rate declines. This limitation applies to both AS 29.45.080 and the 29.45.090 tax limitation calculations, but does not apply to taxes levied or pledged to pay or secure the payment of the principal and interest on bonds. This legislation became effective July 1, 2014.
This newly enacted optional exemption allows a municipality, by ordinance approved by the voters, to extend the $150,000 mandatory exemption to widows or widowers of those deceased from a service-connected cause sustained while serving in the United States Armed Forces, or as a member of the National Guard. This legislation became effective January 1, 2013. Please note that although this exemption was added under AS 29.45.030(e), it is an optional exemption.
This legislation added optional exemption subsections AS 29.45.050(t) and AS 29.45.050(u) to partially or totally exempt farm structures from taxation. This legislation became effective September 26, 2013, and will expire on September 26, 2023.
Although this legislation is not directly related to property taxation, it does allow for the non-probate transfer of real property upon death and could potentially come into play in regard to the Senior Citizens'/Disabled Veterans' property tax exemption eligibility. Fundamental features of the Transfer on Death (TOD) deed are that it does not operate until the transferor's death, and it does not affect the interests or property rights of the transferor or any other owners. Therefore, the deed does not, among other things: affect the transferor's right to transfer or encumber the property inter vivos; sever a joint tenancy or a joint tenant's right of survivorship; trigger a due-on-sale clause in the transferor's mortgage; trigger the imposition of real estate transfer tax; or affect the transferor's homestead or real estate tax exemptions, if any. Once this type of deed is recorded it remains revocable, and the TOD deed requires no further documentation upon death of the transferor. This is problematic for assessment offices in that the only time the transferee(s) (heir(s)) would have to record a change of ownership would be to sell, or in some way encumber, the real property. This may create administrative issues for your jurisdictions; therefore, the OSA recommends you consult the background documentation related to this legislation, and consult your in-house counsel. You can find more information on this subject within the AAAO Members-Only section of the AAAO Website.