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Farm Exemption Bill Clears Legislature

HB 40 reduces or eliminates taxes for qualifying food storage & processing facilities

Friday, April 12, 2013, Juneau, Alaska – The Alaska House of Representatives today concurred with Senate changes to House Bill 40 by Representative Shelley Hughes, R-Palmer. The bill creates opportunities for municipalities to reduce or eliminate taxes for qualifying food storage or processing structures, in turn facilitating the reduction of operational costs for farmers. It aims to encourage storage and production of food products without significantly diminishing taxes for local governments.

“HB 40 provides an opportunity to strengthen the agricultural sector of our economy while at the same time increasing access to locally grown food,” Hughes said. 

Hughes pre-filed the bill before the start of session to address problems that the Alaska farming community faces in bringing their products to market and the impact on the food available for families in Alaska.

“The goal of this bill is for farmers not to have to make the decision between storing produce and throwing it out because the taxes on storage facilities don’t make financial sense,” Hughes said. “More fresh, locally grown food on our shelves will benefit us all. If Alaskans can have greater access to tastier and healthier food, rather than week-old produce shipped up from the Lower 48, that is a very good thing.”

Those who qualify for a tax exemption under this bill would have to receive at least ten percent of their annual income from farming activities. In addition to food storage and processing buildings, dairy buildings and greenhouses could be exempt from taxation if they meet the requirements. A municipality may partially or fully exempt the property tax for a qualifying farm food storage or food processing structure or building. The bill does not mandate the tax exemption but would allow a municipality, by an ordinance approved by the voters, to consider the exemption.

An amendment in the Senate puts a sunset date on the program of ten years after the effective date.

HB 40 passed the Senate on a vote of 18-0 and passed the House Feb. 8. The bill will now be sent to the Governor for signature.

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