Legislature(2005 - 2006)CAPITOL 124

05/03/2005 08:00 AM COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 293 BOROUGH SALES TAX EXEMPTIONS TELECONFERENCED
Moved Out of Committee
+= SB 142 REGIONAL SCHOOL BD LAND OWNERSHIP TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HB 293-BOROUGH SALES TAX EXEMPTIONS                                                                                           
                                                                                                                                
8:14:00 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON announced  that the final order  of business would                                                               
be HOUSE  BILL NO. 293, "An  Act relating to a  borough sales tax                                                               
exemption for a source that is taxed by a city in that borough."                                                                
                                                                                                                                
8:14:26 AM                                                                                                                    
                                                                                                                                
KACI  SCHROEDER,  Staff  to  Representative  Bill  Thomas,  House                                                               
Community and  Regional Affairs Standing Committee,  Alaska State                                                               
Legislature, explained  that HB 293 clears  up ambiguous language                                                               
in  current  statute.    This legislation  makes  it  clear  that                                                               
boroughs  have the  power to  wholly or  partially exempt  cities                                                               
within their boundaries.   For example, if the  City of Fairbanks                                                               
has an  8 percent lodging  tax and the  borough also levies  an 8                                                               
percent  lodging tax,  the borough  has the  power to  exempt the                                                               
City  of Fairbanks  in  order  to avoid  any  stacking of  taxes.                                                               
Therefore,  the playing  field is  leveled and  businesses aren't                                                               
hurt  by differing  tax rates  between a  city within  a borough.                                                               
Ms. Schroeder  directed attention to  a chart [entitled,  "SB 161                                                               
Impact"], which illustrates the  problem associated with stacking                                                               
taxes.                                                                                                                          
                                                                                                                                
8:16:16 AM                                                                                                                    
                                                                                                                                
RENE  BROKER,  Attorney at  Law,  Fairbanks  North Star  Borough,                                                               
related  her understanding  that  in addition  to Fairbanks  both                                                               
Ketchikan  and   Kodiak  boroughs  are  already   utilizing  this                                                               
exemption.    Ms. Broker  said  that  [the Fairbanks  North  Star                                                               
Borough]  supports this  legislation  because  it clarifies  that                                                               
[the borough] is  allowed to do this.  This  legislation makes it                                                               
clear that  state law doesn't  force boroughs to stack  taxes and                                                               
double  the  tax  burdens  in  the  cities  within  the  borough.                                                               
Furthermore,  the  legislation  clarifies  that  the  legislature                                                               
didn't intend  to prevent  boroughs from  working with  cities to                                                               
equally  levy  taxes  throughout  the borough.    Moreover,  this                                                               
allows boroughs  that choose to  do so to cooperatively  meet the                                                               
public policy  goals of avoiding  double taxation  and preventing                                                               
duplication of taxing jurisdictions within the borough.                                                                         
                                                                                                                                
8:17:40 AM                                                                                                                    
                                                                                                                                
CO-CHAIR OLSON, upon  determining no one else  wished to testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
8:17:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  moved to  report HB  293 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  There being no objection, it was so ordered.                                                                            

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