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Senate Bills 92, 112, and 113: New Revenue Proposals
While there is no personal income tax in Alaska, there is a corporate income tax. Corporations that make over $25,000 in taxable income are subject to a tiered tax rate, with the maximum rate of 9.4% imposed on corporations making over $222,000. Alaska only imposes this tax, however, on C-corporations; not S-corporations, partnerships, or LLCs.
Senate Bill 92, by Senator Yundt, proposes extending Alaska's corporate income tax to a narrow set of S-corporations. Specifically, it would tax oil and gas companies that make over $5 million in taxable income. In its current form, the bill is expected to apply to just one company: Hilcorp. It is expected to generate as much as $175 million.
Senate Bill 112 would reduce the amount the State credits to oil companies on each barrel of oil from a maximum of $8 per barrel to $5 per barrel. That bill is projected to raise $400 million per year.
Senate Bill 113 would capture revenue from e-businesses, including Amazon, that operate in Alaska, but do not currently pay Alaska's corporate income tax. This measure is projected to raise $25 to $65 million per year.
School Funding Proposals
Governor Dunleavy has signaled that he will veto any significant school funding increase that does not include his policy priorities for homeschools and charter schools. Currently, members of the Senate and House are in negotiations with the Governor's office to try to come to an agreement on what a final education funding outcome might look like.
Meanwhile the House Majority's education bill, House Bill 69, proposes an increase in the Base-Student Allocation of $1,808 per student over three years, including a $1000 increase this year.
Senate Bill 46 would move away from the BSA and towards a more stable and transparent model of funding public education.
To read more about those bills, click here to see our recent newsletter on education funding.
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