Assembly tweaks business tax regs

PALMER — The Mat-Su Borough Assembly has made two changes to the way the borough relates to local businesses.

The assembly has exempted 48 businesses from the tax levied on business inventories and has directed staff to enhance what it does with business licenses.

Borough economic development director Don Dyer championed the inventory tax exemption as a tool to entice businesses to move their warehouses from Anchorage to the Mat-Su Valley.

Assemblyman Steve Colligan said the Valley could conceivably become the state’s “logistics hub,” and that by implementing the exemptions. He said the move makes the statement that the Valley would like logistics type of business to locate here.

The initial idea Dyer presented was to erase the inventory tax altogether, but the compromise that passed just bumped up the level at which a business is exempt. Previously, businesses with less than $250,000 in inventory didn’t pay the tax. The assembly raised that bar to $1 million.

Borough finance director Tammy Clayton said that under the $250,000-and-up tax, 68 businesses paid in. Raising that exemption would drop that number to 20.

Though he supports the change and, in fact, wants to find a way to get rid of the tax next year, Colligan also urged caution, saying that if the tax change doesn’t attract new businesses to pay more in property tax, essentially the move shifts the tax burden from businesses to homeowners.

“We have a specific mission to offset those taxes with taxable infrastructure development that we get from the private sector,” he said.

As for business licenses, Colligan said the borough collects fees for that kind of licensing, but doesn’t collect any kind of useful information. Business licenses can be a way to gather information crucial for borough economic development work and helpful for businesses seeking to network with one another.

“We’re going to pay for this data one way or the other,” he said.

Assemblyman Vern Halter said he’d like to see more consolidation. As a local business owner, he said he has two licenses from the borough, one from the state and also a kennel license.

Assemblyman Darcie Salmon argued for getting rid of the licensing requirement altogether.

“I have a state license, a borough license, a Houston license, a Wasilla license and a Palmer license, and I don’t get anything from any of those,” he said.

Eventually, the ordinance that would have repealed licensing altogether failed 5-2 with Salmon and Ron Arvin voting on the losing side.

Colligan directed staff to come up with a way to make the licensing process easier to accomplish and to adapt it to generate more useful information. Halter directed staff to bring back a proposal for unifying city and borough licensing and maybe even state licensing.

Contact reporter Andrew Wellner at andrew.wellner@frontiersman.com or 352-2270.