City and Borough of Juneau
Finance Committee Meeting
November 1, 2004 at 5 p.m., Chambers
Call to Order
Approval of Minutes - July 28, 2004
Business Personal Property Tax Exemption the First $100,000 of Assessed Value
Business Personal Property (BPP) tax is a tax that is annually assessed on every business for property they own as part of operating their business. This includes things such as furniture, photocopy machines, trucks, heavy equipment, computers, cash registers, display cases, etc. Each year every business (whether they are exempt or not) is required to fill out a form that verifies their current inventory of equipment and lists any new equipment and its value that may have been purchased that year.
There are currently 2,862 businesses registered in Juneau . Of that total, 325 businesses reported that they have no equipment of any value to report. An additional 842 businesses reported they have less than $2,000 of assessed value in their equipment and therefore pay no tax since we currently exempt the first $2,000 in assessed value for all businesses. The current exemption does exempt over $4 million in property value, which equates to a reduction of approximately $49,000 in taxes to CBJ.
The Chamber is proposing that the BPP tax exemption be increased from $2,000 to $100,000 of assessed value. This would exempt a total of 2,506 businesses and result in a loss of $500,000 in tax revenue to CBJ.
At the recent Assembly retreat we discussed the Assembly's desire to 'take action regarding the BPP Tax Committee Report' with a target date of the 2nd quarter of 2005. I recommend that we hold to that schedule for action for the following reasons:
The Assembly has committed to review our tax policies, including all of the current exemptions. It makes sense that this exemption be considered at the same time and in the same context with all of the others and not as a separate decision;
By the second quarter of 2005, we will know where we stand in terms of the budget. If the Assembly does approve this exemption, or some variation of it, it will likely require either a reduction in CBJ services or the need to define some other offsetting revenue source. In either case, I believe it is important that the Assembly know what services will be impacted or revenue source is being considered before taking action on the exemption.
Included in your packet are:
Information prepared by the Juneau Chamber of Commerce for a meeting held on September 28, 2004 with Rod Swope and Craig Duncan.
A memo from Craig Duncan to Rod Swope regarding the proposed exemption.