August 30, 2012 | Volume 42, No. 35

Borough responds to village tax-exempt claim

The Haines Borough is holding to its contention that the Chilkat Indian Village must pay property tax on the former Chilkat Cruises dock and beachfront property. The village owes the borough about $10,000, according to the municipality.

In a letter to the tribe dated Aug. 3, contract assessor Michael Renfro lays out several arguments for the borough’s position, including that the tribe’s acquisition of the property from village corporation Klukwan, Inc. in 2010 was “unauthorized.”

In the letter, Renfro alludes to a challenge to the acquisition by a corporation shareholder. “The borough therefore will provide an amended assessment notice to the prior record owner and to the entity that appears to have supplied the money for the purchase of the property,” Renfro wrote.

Regardless of the ownership question, however, neither borough code nor state law exempts property owned by a tribe from property tax, he wrote. “This particular property has historically been taxable real property even when owned by a Klukwan, Inc. subsidiary,” the letter says.

A U.S. Supreme Court ruling determined that to obtain an exemption from local or state property tax, a tribe must request property be placed in trust status, the letter said. “There is no evidence CIV took this step during the time it held title to the property.”

Renfro also cites a case in which the Alaska Supreme Court blocked the City of Nome from foreclosing on property owned by a tribe there, but said that case doesn’t apply because it did not decide if property was tax exempt.

The borough’s determination can be appealed to the borough Board of Equalization or to Alaska Superior Court.

The borough also said its decision in the matter was specific to this property.