Alaska couple looks to change damaged property tax law

FAIRBANKS, Alaska (AP) – An Alaska couple is looking to change a law that requires people to pay taxes on damaged property.

Ron and Jane Hunt lost a house in a fire Jan. 8. Ron Hunt says he went to the Fairbanks North Star Borough to report the fire.

“I was expecting to get a property tax adjustment,” he said.

Ron Hunt learned he would be required to pay his full tax bill $6,977.92 on the North Pole property, even though the house, a rental, and an attached shop were reduced to rubble. The Hunts live next door to the rental property but continued to use the shop.

“I was stunned,” Hunt said. “The building wasn’t there. We were taxed on something that didn’t exist anymore. ... Everybody needs to know how unfair it is.”

Ron Hunt urged the Borough Assembly to change the law. But he said the measure that passed Sept. 28 doesn’t offer meaningful assistance.

Alaska law allows municipalities to offer disaster tax relief, but the borough had no mechanism to offer the tax relief until recently after Assemblymen Lance Roberts and Guy Sattley proposed it, the Fairbanks Daily News-Miner reported .

“I had no idea until a constituent wrote us,” Roberts said as he explained his disaster tax relief proposal at an assembly committee meeting in September. “I immediately jumped on this. Government should always have some flexibility and be merciful to its citizens, especially those in extremely bad circumstances.”

Roberts and Sattley proposed a simple fix, they said. After a disaster, such as a fire, the borough reassesses the property and “we kick back the taxes,” Roberts said.

The measure adopted by the assembly was a substitute by Borough Mayor Karl Kassel, who said he was concerned about the borough being hit by a massive disaster and going bankrupt providing property owners with tax relief.

His proposal, which eventually was adopted, added requirements including that the disaster tax relief would apply only to uninsured property and that it would exclude major disasters declared by the president, the governor or the borough mayor.

The tax relief, which would be prorated from the date of the disaster, is capped at $10,000 and the loss to the taxpayer must exceed $30,000.

When the measure went before the assembly for approval, Roberts amended it so that commercial and rental properties could qualify. But an amendment to allow relief for insured properties failed.

Under the new law, Ron Hunt would not qualify for tax relief for his destroyed rental property and shop. Hunt said the fire was caused by a woodstove mishap.

He said the tools in his shop were not insured a mistake on his part and that the check from the insurance company for the house and shop didn’t completely cover his loss.

Hunt said he plans to wait a year until he rebuilds to avoid a year of property taxes as a way to compensate himself for paying taxes on the property that burned.

 

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