At the May 20 Regular Assembly Meeting, the Anchorage Assembly approved (11-1) AO 2025-56(S) to increase the exemption for municipal business personal property taxes from $20,000 to $100,000.
The Municipality’s business personal property tax is a levy on the value of a business’ supplies, equipment, and furnishings, as well as their inventory. The $20,000 exemption was set in 2005.
“The fact is that many of Anchorage’s small businesses are struggling,” said Assembly Member Daniel Volland, who sponsored the initial proposal with Former Vice Chair Meg Zaletel. “A recent survey by the Alaska Small Business Development Center revealed a significant drop in small business confidence due to political and economic uncertainties, with the number of businesses expecting a declining financial situation increasing from 25% to 63%. In today’s climate, governments should be increasingly critical of the burdens we put on small businesses.”
While the original ordinance was sponsored by Former Vice Chair Zaletel and Assembly Member Volland, Assembly Members Yarrow Silvers, and Keith McCormick joined Member Volland as co-sponsors of the substitute (S) version.
Assembly Member Silvers said during the debate, “This ordinance fully exempts more than one thousand small businesses from paying inventory taxes, saving them up to $1,300 to reinvest in growing their business. Our message is this: Anchorage is open for business.”
Assembly Member McCormick added, “I find the business personal property tax incredibly antiquated. . . and cumbersome to enforce. By exempting small businesses, municipal staff have more bandwidth to focus tax compliance efforts with larger businesses, an opportunity to increase government efficiency.”
Without corresponding reductions to the municipal budget, the exemption increase shifts tax liability to other taxpayers. With no other changes to the municipal budget, information from the Municipal Assessor’s Office shows an estimated increase of $6 in property taxes per $100,000 in assessed value. The sponsors also hope that an increase in small business activity could broaden the tax base and reduce the estimated increase for residential and commercial property tax payers in future years.
As approved, AO 2025-56(S) takes effect January 1, 2026.
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Daniel Volland, Assembly Member
District 1, North Anchorage
daniel.volland@anchorageak.gov
Yarrow Silvers, Assembly Member
District 5, East Anchorage
yarrow.silvers@anchorageak.gov
Ketih McCormick, Assembly Member
District 6, South Anchorage, Girdwood, Turnagain Arm
keith.mccormick@anchorageak.gov