The Nome Common Council mulls to nix the current exemption on personal property tax for the aviation industry.

Council discusses lifting exemption of planes from personal property tax

Looking at a $2 million deficit in the 2025 budget, the Nome Common Council last Monday continued to debate whether to remove a personal property tax exemption on commercial aircraft.

According to a memo prepared by Bryant Hammond, City of Nome special projects manager, an estimated $811,843 could flow in Nome’s coffers if commercial airplanes are taxed at a mill rate of 11.5. Hammond’s memo also emphasizes that the numbers are estimates, based on publicly available information “which may or may not be current or accurate.”
The formula, simplified, would take the market value of an aircraft and the time the plane spends on the ground in Nome to calculate the tax.

Given that airline carriers told the council in previous work sessions on the topic that they could remove their fleet from the current homeport in Nome, the memo proposes a tiered approach, giving tax breaks ranging from 20 to 50 percent depending on the taxable value of the planes. “By instituting a graduated exemption the incentive to move aircraft between hubs outside of normal operations is reduced,” the memo states.

Council member Scot Henderson said he had expected an draft ordinance before the Council last Monday. However, City Manager Glenn Steckman explained that a draft was drawn up but didn’t make it into the council packet.

Henderson, growing impatient with the lack of enthusiasm for removal of personal property taxation of airplanes by his fellow council members, repeatedly said it’s not fair to pass the burden to property owners as the city tries to balance the budget without trying to find other solutions. Councilmember Mark Johnson expressed unease about the memo. “We don’t know exactly what we’re looking at,” he said, adding that the numbers are assumptions and may not be accurate. “We don’t know how to implement it. It’s a waste of staff time that should’ve been spent analyzing the budget,” he said. Henderson challenged him saying that Johnson is not looking at other options but having no problem just raising the mill rate. Johnson shot back, “you did too,” alluding to Henderson’s affirmative vote to pass the budget, which included the mill rate. However, the mill rate was set in resolution in the May 28 council meeting, which Henderson did not attend.

Mayor John Handeland stepped in and asked the other present council members Cameron Piscoya and Adam Martinson on the phone what they want to see.

Piscoya said he wasn’t sure one way or the other. “I’d like to see what the ordinance would look like,” he said.  
Council members Sigvanna Tapqaq and Maggie Miller were absent.

Staff was asked to come up with an ordinance that removed the exemption with a 50 percent exemption to the entire tax liability.
In other business, the council voted in second reading on an ordinance that would mandate that dogs coming into Nome must have a rabies vaccination in addition to the parvo vaccination. The council also voted on approving the contract between the City and the Nome Chamber of Commerce to operate the Nome Visitor Center.

NOTE: This article reflects a clarification that Councilmember Henderson was absent from the council meeting on May 28, in which the council approved a resolution that set the mill rate to 11.5.

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Nome, Alaska 99762

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