Mat-Su Ballot Ties Home Tax Break to New 1% Sales Tax

Mat-Su voters will decide Nov. 3 whether to give homeowners a property tax break paid for with the borough's first areawide sales tax. They can't take one without the other.

Proposition C, sponsored by Assembly Member Stephanie Nowers, would exempt the first $75,000 of assessed value on owner-occupied homes and add a 1 percent sales tax everywhere in the Matanuska-Susitna Borough, including inside Wasilla, Palmer and Houston. Both halves ride on a single yes-or-no question.

Assembly Member Maxwell Sumner has argued that an exemption on its own "just transfers the tax burden from property owners ... to other property owners," shifting it onto rentals and commercial buildings.

For a $400,000 home, the borough estimates the exemption would cut property taxes by about $750 a year. Owners must have lived in the home at least 185 days the year before and can't be registered to vote anywhere else. The break can't be stacked with senior, disabled or farm exemptions. Renters would pay the sales tax and get no exemption.

The tax would apply only to the first $1,000 of a purchase, capping it at $10, though a hotel stay counts each night separately. Out-of-borough sellers doing enough business in the valley would collect it too. "In plain terms, this means that internet sales are taxed," says the memo filed with the ordinance.

The borough estimates the tax would raise about $21 million a year, while the exemption would cost $12 million to $15 million in property tax revenue. Shoppers would start paying in April 2027, and lower property tax bills would follow in August.

The assembly shelved the measure in June, then revived it and sent it to the ballot in July. In August, Sumner, Michael Bowles and Bill Gamble voted to rescind it, and the motion failed 3-4. Sumner and Gamble are both on the Nov. 3 ballot.

Voters will also see a 5 percent tax on alcohol sales. Registration closes Oct. 4, early voting starts Oct. 19 and absentee ballot applications must reach the borough clerk by Oct. 27.