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HB0350b -1- CSHB 350(L&C)
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CS FOR HOUSE BILL NO. 350(L&C)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - SECOND SESSION
BY THE HOUSE LABOR AND COMMERCE COMMITTEE
Offered: 4/30/26
Referred: Finance
Sponsor(s): REPRESENTATIVES FIELDS, Hall
A BILL
FOR AN ACT ENTITLED
"An Act establishing an income tax on certain entities in the state; and providing for an 1
effective date." 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
* Section 1. AS 43.20 is amended by adding a new section to read: 4
Sec. 43.20.019. Tax on income attributable to a qualified entity. (a) If a 5
qualified entity has taxable income over $25,000,000 in a tax year, the qualified entity 6
shall pay a tax of 9.4 percent on the taxable income over $25,000,000. 7
(b) For purposes of calculating taxable income under this section, 8
(1) taxable income of a qualified entity is determined under 9
AS 43.20.144 as if the qualified entity were taxable as a C corporation, as defined by 10
26 U.S.C. 1361(a)(2) (Internal Revenue Code), as that section read on January 1, 11
2026; 12
(2) notwithstanding AS 43.20.021 and AS 43.20.036, the taxpayer may 13
not apply as a credit or deduction against tax liability a credit or deduction allowed as 14
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CSHB 350(L&C) -2- HB0350b
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to federal taxes under 26 U.S.C. (Internal Revenue Code), except that the taxpayer 1
may take a credit or deduction allowed for a C corporation under (1) of this 2
subsection. 3
(c) The tax under this section does not apply to a corporation subject to tax 4
under AS 43.20.011 or to an entity that is part of a unitary business with a corporation 5
subject to tax under AS 43.20.011. 6
(d) For the purpose of determining the tax due under this section, the 7
department shall 8
(1) aggregate the taxable income of two or more entities if the 9
department determines that, without the provisions of this section, the taxable income 10
would reasonably be expected to be attributed to a single entity; and 11
(2) except as provided in (c) of this section, include in the calculation 12
of taxable income of the qualified entity income that is attributable to an entity that is 13
part of a unitary business with the qualified entity paying tax under this section. 14
(e) In this section, "qualified entity" means a 15
(1) sole proprietorship; 16
(2) partnership; 17
(3) limited liability company; or 18
(4) entity that has elected to file federal returns under 26 U.S.C. 1361 - 19
1379 (Internal Revenue Code). 20
* Sec. 2. AS 43.20.030(a) is amended to read: 21
(a) If a taxpayer [CORPORATION], or a partnership that has a taxpayer 22
[CORPORATION] as a partner, is required to make a return under the provisions of 23
the Internal Revenue Code, the taxpayer [IT] shall file with the department, within 30 24
days after the federal return is required to be filed, a return setting out 25
(1) the amount of tax due under this chapter, less credits claimed 26
against the tax; and 27
(2) other information for the purpose of carrying out the provisions of 28
this chapter that the department requires. 29
* Sec. 3. AS 43.20.031(i) is amended to read: 30
(i) A taxpayer that [CORPORATION WHICH] is a member of a group of 31
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HB0350b -3- CSHB 350(L&C)
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unitary corporations or entities that [WHICH] collectively has income from business 1
activity taxable both inside and outside the state, or income from other sources both 2
inside and outside the state, shall determine its income from sources in this state by 3
use of the combined method of accounting. 4
* Sec. 4. AS 43.20.031 is amended by adding a new subsection to read: 5
(j) For purposes of calculating income under this chapter, a taxpayer may 6
deduct from income a payment to the shareholder, owner, member, or partner of a 7
qualified entity, as that term is defined in AS 43.20.019(e), if 8
(1) the shareholder, owner, member, or partner is a taxpayer under this 9
chapter; 10
(2) the payment does not include a transfer of property; and 11
(3) the payment is included in the shareholder's, owner's, member's, or 12
partner's income for the purposes of this chapter. 13
* Sec. 5. AS 43.05.085; AS 43.20.012(b), and 43.20.013 are repealed. 14
* Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 15
read: 16
APPLICABILITY. This Act applies to a qualified entity with taxable income over 17
$25,000,000 for a tax year beginning on or after January 1, 2027. In this section, "qualified 18
entity" has the meaning given in AS 43.20.019(e). 19
* Sec. 7. This Act takes effect immediately under AS 01.10.070(c). 20