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CS FOR SENATE BILL NO. 92(FIN)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - FIRST SESSION
BY THE SENATE FINANCE COMMITTEE
Offered: 5/9/25
Referred: Rules
Sponsor(s): SENATE RESOURCES COMMITTEE
A BILL
FOR AN ACT ENTITLED
"An Act establishing an income tax on certain entities producin g or transporting oil or 1
gas in the state; and providing for an 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 attri butable to a qualified entit y. (a) If a 5
qualified entity has taxable income over $5,000,000 in a tax ye ar, the qualified entity 6
shall pay a tax of 9.4 percent on the taxable income over $5,000,000. 7
(b) For purposes of calculating taxable income under this section, 8
(1) taxable income of a qualif ied entity is determined under 9
AS 43.20.144 as if the qualified entity were taxable as a C cor poration, as defined by 10
26 U.S.C. 1361(a)(2) (Internal Re venue Code), as that section r ead on January 1, 11
2025; 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 cred it or deduction allowed as 14
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to federal taxes under 26 U.S.C. (Internal Revenue Code), excep t that the taxpayer 1
may take a credit or deduction allowed for a C corporation unde r (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 bu siness with a corporation 5
subject to tax under AS 43.20.011. 6
(d) For the purpose of determining the tax due under this sect ion, the 7
department shall 8
(1) aggregate the taxable income of two or more entities if th e 9
department determines that, wit hout the provisions of this sect ion, 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 attrib utable 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, 15
(1) "qualified entity" means a 16
(A) sole proprietorship; 17
(B) partnership; 18
(C) limited liability company; or 19
(D) entity that has elected to file federal returns under 26 20
U.S.C. 1361 - 1379 (Internal Revenue Code); 21
(2) "taxable income" means income from the production of oil o r gas 22
from a lease or property in the state or from the transportatio n of oil or gas by pipeline 23
in the state. 24
* Sec. 2. AS 43.20.030(a) is amended to read: 25
(a) If a taxpayer [CORPORATION], or a partnership that has a taxpayer 26
[CORPORATION] as a partner, is required to make a return under the provisions of 27
the Internal Revenue Code, the taxpayer [IT] shall file with the department, within 30 28
days after the federal return is required to be filed, a return setting out 29
(1) the amount of tax due under this chapter, less credits cla imed 30
against the tax; and 31
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(2) other information for the purpose of carrying out the prov isions of 1
this chapter that the department requires. 2
* Sec. 3. AS 43.20.031(i) is amended to read: 3
(i) A taxpayer that [CORPORATION WHICH] is a member of a group of 4
unitary corporations or entities that [WHICH] collectively has income from business 5
activity taxable both inside and outside the state, or income f rom other sources both 6
inside and outside the state, sh all determine its income from s ources in this state by 7
use of the combined method of accounting. 8
* Sec. 4. AS 43.20.031 is amended by adding a new subsection to read: 9
(j) For purposes of calculating income under this chapter, a t axpayer may 10
deduct from income a payment to the shareholder, owner, member, or partner of a 11
qualified entity, as that term is defined in AS 43.20.019(e), if 12
(1) the shareholder, owner, member, or partner is a taxpayer u nder this 13
chapter; 14
(2) the payment does not include a transfer of property; and 15
(3) the payment is included in the shareholder's, owner's, mem ber's, or 16
partner's income for the purposes of this chapter. 17
* Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 18
read: 19
APPLICABILITY. This Act applies to a qualified entity with taxa ble income over 20
$5,000,000 for a tax year beginning on or after January 1, 2025 . In this section, "qualified 21
entity" and "taxable income" have the meanings given in AS 43.20.019(e). 22
* Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 23
read: 24
TRANSITION: PAYMENT OF TAX. A person subject to tax before the effective 25
date of this Act under AS 43.20.019, added by sec. 1 of this Ac t, shall pay the balance of the 26
tax due for a tax year ending before January 1, 2026, by Januar y 1, 2026. Until January 1, 27
2026, the Department of Revenue sha ll waive interest that would otherwise accrue under 28
AS 43.05.225 and civil and criminal p enalties accruing under AS 43.05.220, 43.05.245, and 29
43.05.290 that are a result of the retroactivity of this Act. 30
* Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 31
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read: 1
RETROACTIVITY OF REGULATIONS. Notwithstanding a contrary provis ion of 2
AS 44.62.240, if the Department of Re venue expressly designates in the regulation that the 3
regulation applies retroactively to a specific date, a regulati on adopted by the department to 4
implement, interpret, make specific, or otherwise carry out thi s Act applies retroactively to 5
that date. 6
* Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 7
read: 8
RETROACTIVITY. This Act is retroactive to January 1, 2025. 9
* Sec. 9. This Act takes effect immediately under AS 01.10.070(c). 10