Council could change tax on planes

Posted: Wednesday, January 11, 2006

The Soldotna City Council is slated to consider changing the way the city taxes aircraft.

Ordinance 2006-01, set for first reading this evening, would adopt a flat tax schedule for aircraft rather than taxing the personal property based on its actual value.

“Someone pointed out to us that if he bought the bigger plane he was looking at and put it (in Soldotna), he would be paying an additional $16,000 in property tax,” said City Manager Tom Boedeker on Monday, about the reason for the change.

Boedeker said the Kenai Peninsula Borough and the city of Kenai tax aircraft based on flat tax schedules, and this change would put Soldotna in line with other local governments.

“If the person wanted to get the bigger plane and build a hangar here, our tax would be a disincentive,” Boedeker said.

“If the borough does a flat tax, why not us, too?”

In terms of revenue to the city, the new tax method would not make much difference to city coffers.

Currently the first $100,000 of personal property other than motor vehicles and watercraft is exempt from personal property tax. The new law would exempt the first $100,000 other than motor vehicles, watercraft and aircraft.

Fixed wing aircraft weighing less than 2,000 pounds would be taxed at $25 per year. Tax on aircraft from 2,000 to 4,000 pounds would be $50; 4,000 to 6,000 would be $150; 6,000 to 12,500 would be $300; and all aircraft heavier than 12,500 pounds would be $500.

A fee schedule also is included for rotorcraft, or helicopters.

Most people who own aircraft assessed at less than $100,000 would begin paying either $25 or $50 per year, rather than being tax exempt.

In a memo being sent to city council members, Boedeker said, “The flat tax ... is identical in terms to the borough flat tax on aircraft ordinance except it is set at half the rate the borough currently imposes.”

When asked if the proposal is an attempt to draw aircraft away from the Kenai airport, Boedeker said, “No, they’re a commercial airport, and we’re just general aviation.”

At approximately 5,000 feet in length, Soldotna’s runway can accommodate some jet aircraft and some turboprops, according to Boedeker, aircraft that would be in the higher tax bracket.

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