Anchorage Daily News

Editor's note: This story was originally published December 24, 1997

Wasilla residents no longer will have to pay taxes on their boats, snowmachines or planes. The City Council voted unanimously Friday to eliminate the town's personal property tax, as well as a business inventory and aircraft tax.

Mayor Sarah Palin said eliminating the taxes will encourage more businesses to move to the area and won't hurt the city financially. ''We're also not sticking it to the property owner anymore,'' she said.

Wasilla residents still will pay the city's 1.5-mill property tax and a 2-percent sales tax.

Palin said city officials had been discussing getting rid of the taxes since last March, when the Matanuska-Susitna Borough, where Wasilla is located, eliminated personal property taxes and retained only a business tax on inventory worth over $ 250,000.

Doing away with the taxes will cost the city about $ 93,000 a year in lost revenues, Palin said. But most of it will be made up by an increase in a vehicle tax the borough charges its residents.

The Mat-Su Borough Assembly voted last year to increase the tax from $ 66 to $ 75 for a new car and from $ 8 to $ 35 for vehicles more than 7 years old. The tax is expected to generate about $ 2.1 million for the borough, of which about $ 70,000 will go to Wasilla, according to finance director Erling Nelson.

The Kenai Borough also recently eliminated some of its personal property taxes and raised its vehicle tax from $ 66 to $ 70 a year for a new car.

The vehicle tax is collected by the state, but is passed on to the boroughs, minus a small state administrative fee.

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