Alaska Senate acts to keep cities, boroughs from taxing property sales

The Alaska Senate has voted to prohibit cities and boroughs from taxing real estate transactions.

Senators voted 16-3 on Wednesday to approve Senate Bill 179, sending it to the House for further consideration.

None of Alaska’s local governments currently tax the sale of real property, such as a commercial building or a home, but bill sponsor Sen. Jesse Bjorkman, R-Nikiski, said that real estate agents are concerned by the prospect and asked for action.

“This bill was brought to me by realtors and other folks who are concerned about the rising price of homes,” he said.

Speaking to his fellow senators, Bjorkman suggested that if a local government were to impose a tax on real property, it could increase housing prices.

Sen. Jesse Kiehl, D-Juneau, said the bill represents an unusual step by the Legislature, which has traditionally declined to limit local governments’ power.

“I am not a fan of real estate transfer taxes,” he said, but added that the decision is one that should be made locally.

“That … is where those decisions ought to be made,” Kiehl said, joining Sens. Löki Tobin, D-Anchorage, and Donny Olson, D-Golovin, as the lone votes in opposition.

The Alaska Municipal League, which represents local governments across the state, raised multiple concerns with the bill.

Nils Andreassen, the league’s executive director, said by email that many of the group’s issues were addressed when the bill was rewritten.

He said the sales of individual homes are “considered casual and isolated,” which exempts them from local taxation.

“This bill is focused on those sales for when a commercial developer builds houses and sells them as part of their business,” he said.

“We remain concerned about the impact of this bill on the current revenue collection that local governments rely on, and any unintended consequences,” Andreassen said. “Ultimately, there are more effective ways to ensure housing affordability and accessibility.”

In other business Wednesday, the Senate:

• Voted 19-0 to enact a bidder preference when considering state contracts offered to businesses that employ a graduate of a Department of Defense program that prepares members of the military for civilian work. Senate Bill 154 goes to the House for consideration.

• Approved a resolution asking the state Department of Health to improve the way it deals with mental health and substance abuse disorders. Senate Concurrent Resolution 9 advanced on a 19-0 vote to the House.

Also Wednesday, the House:

• Designated May 2024 as Mental Health Awareness Month and May 5-11, 2024, as Tardive Dyskinesia Awareness Week. Tardive Dyskinesia is a disorder that involves involuntary repetitive movements, experienced by some people taking antipsychotic medications. House Concurrent Resolution 15 passed 38-1 and advances to the Senate.

Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.