CSHB 236(FIN): "An Act imposing a limited tax on wages and on net earnings from self-employment; relating to the administration and enforcement of that tax; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 236(FIN) 01 "An Act imposing a limited tax on wages and on net earnings from self-employment; 02 relating to the administration and enforcement of that tax; and providing for an 03 effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 SHORT TITLE. This Act may be known as the Alaska Education Tax Act. 08 * Sec. 2. AS 43.10.042(a) is amended to read: 09 (a) A lien imposed under AS 43.10.010 - 43.10.060 is not valid as against a 10 mortgagee or other lien holder, pledgee, purchaser, or judgment creditor until notice of 11 it is recorded in the records of the recording district where the property subject to the 12 lien is situated. However, regardless of the date the liens are recorded, a lien arising 13 out of a tax due under AS 43.45, AS 43.56, and AS 43.75 [AS 43.56 AND 43.75], 14 including the penalties and interest on the tax, is a lien prior, paramount, and superior
01 to all other liens, mortgages, hypothecations, conveyances, and assignments, upon all 02 the real and personal property of the person liable for the tax, and upon all the real and 03 personal property used with the permission of the owner to carry on the business that 04 is subject to the tax. 05 * Sec. 3. AS 43 is amended by adding a new chapter to read: 06 Chapter 45. Education Tax. 07 Sec. 43.45.011. Tax imposed. (a) There is imposed a tax, not to exceed a 08 combined total of $100 a calendar year, on wages and net earnings from self- 09 employment in excess of $600. 10 (b) The rate of the tax is 10 percent. 11 (c) The tax imposed under this section does not apply to wages and net 12 earnings exempt from the tax under federal law. 13 Sec. 43.45.021. Collection of tax by employer. (a) An employer shall 14 deduct and withhold 10 percent of an employee's wages subject to withholding under 15 26 U.S.C. 3401 - 3406 on the first regular payroll of the calendar year and from 16 subsequent payrolls until the tax due under this chapter is fully withheld. 17 (b) An employer is liable for the tax required to be withheld from an employee 18 unless the employer can demonstrate that the employer relied on proof provided by the 19 employee that the total tax for the calendar year imposed under AS 43.45.011 had 20 already been withheld under this section or paid under AS 43.45.031. A deduction of 21 the tax may not be made from the wages of an individual who provides proof to the 22 employer that the entire tax imposed under AS 43.45.011 on that individual for the 23 calendar year has already been withheld or paid under AS 43.45.031. 24 (c) Tax withheld by an employer becomes due and shall be paid by an 25 employer to the department in accordance with regulations adopted by the department. 26 (d) An employer shall maintain a record of the amount deducted from the 27 wages of each employee and shall furnish an annual statement of the deductions to 28 each employee and to the department in accordance with regulations adopted by the 29 department. 30 (e) The Department of Revenue may, if it will result in cost savings for the 31 state in the administration of the tax, for employers in the administration of the tax, or
01 for both, to the extent practicable, coordinate collection and reporting of the tax 02 imposed in this chapter with the collection and reporting of employment security 03 contributions by the Department of Labor and Workforce Development, including 04 permitting the Department of Labor and Workforce Development to collect the tax 05 payments and remit them to the Department of Revenue. 06 (f) The department may by regulation provide for an incentive to an employer 07 or a self-employed individual for electronically filing returns and making payments or 08 for other use of technology or filing methodologies to improve the efficiency of tax 09 administration. Regulations adopted under this subsection must 10 (1) establish the duration, level, nature, and value of the incentive; the 11 value of an incentive established under this subsection may not exceed $300 for each 12 return, application, filing, or payment; and 13 (2) require that the incentive be available only if the return, 14 application, filing, or payment is filed timely with the department under this chapter. 15 Sec. 43.45.026. Employer security. (a) If the department determines that an 16 employer has been delinquent in remitting the tax imposed under AS 43.45.011 in 17 accordance with regulations adopted by the department, the department may require 18 the employer to deposit and keep on deposit with the department a sum equal to the 19 tax required to be withheld by the employer during the 12 months immediately 20 preceding the determination of delinquency under this subsection by the department. 21 If the employer was not required to withhold tax during the full 12 months 22 immediately preceding the determination of delinquency, the department may require 23 a deposit equal to the employer's estimated liability for a 12-month period based on 24 the actual liability for the period during which the employer was required to withhold 25 tax. 26 (b) The department may accept a bond or other security equal in value to the 27 deposit required under (a) of this section in lieu of the deposit required under (a) of 28 this section. 29 (c) The provision of a deposit, bond, or other security under this section does 30 not relieve the employer from any other obligation under this title. 31 (d) The department may apply all or part of the deposit, bond, or other security
01 to payment of the tax imposed under AS 43.45.011, and to any interest and penalties 02 imposed under AS 43.45.021. 03 (e) The deposit, bond, or other security provided under this section is exempt 04 from process, attachment, garnishment, or execution unless otherwise provided by 05 law. 06 (f) The department shall return the deposit, bond, or other security to the 07 employer if the employer is timely in filing and remitting the tax under AS 43.45.021 08 for a period of 24 consecutive months. 09 (g) If an employer ceases to be subject to AS 43.45.021, the department shall, 10 after 12 months have elapsed and all liabilities of the employer to the department 11 under this chapter have been satisfied, refund to the employer any remaining deposit, 12 and cancel any bond or other security accepted by the department under this section. 13 Sec. 43.45.031. Payment of tax by self-employed individual. A self- 14 employed individual shall remit to the department 10 percent of the individual's net 15 earnings from self-employment in accordance with regulations adopted by the 16 department until the entire tax has been paid. 17 Sec. 43.45.041. Refund of overpayments. (a) If an individual pays to the 18 department, directly or through withholding, an amount exceeding the total tax 19 imposed under this chapter during a calendar year and the individual applies for a 20 refund in accordance with regulations adopted by the department, the department shall 21 refund the overpayment to the individual. 22 (b) Interest on an overpayment may not be allowed under AS 43.05.280 if the 23 department refunds the overpayment within 90 days after the date the individual 24 correctly files the refund claim. 25 (c) The Department of Revenue may adopt regulations to coordinate refunds 26 of overpayments under this section with refunds of employment security contributions 27 under AS 23.20.165. 28 (d) An individual may apply for a refund under this section only during the 29 calendar year immediately following the calendar year in which the excess was paid. 30 Sec. 43.45.051. Report of payments to self-employed individuals. A person 31 required to report a payment to a self-employed individual to the federal government
01 under 26 U.S.C. shall also report that payment to the department in accordance with 02 regulations adopted by the department. 03 Sec. 43.45.061. Disposition of tax proceeds. (a) The tax collected by the 04 department under AS 43.45.021 shall be deposited into the general fund and accounted 05 for separately. 06 (b) The legislature may appropriate the estimated amounts to be collected and 07 separately accounted for under (a) of this section for education. 08 (c) The deposit required and appropriation authorized by this section are not 09 intended to create a dedication in violation of art. IX, sec. 7, Constitution of the State 10 of Alaska. 11 Sec. 43.45.099. Definitions. In this chapter, 12 (1) "employee" has the meaning given in 26 U.S.C. 3401; 13 (2) "employer" has the meaning given in 26 U.S.C. 3401; 14 (3) "net earnings from self-employment" has the meaning given in 26 15 U.S.C. 1402; 16 (4) "wages" has the meaning given in 26 U.S.C. 3401. 17 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 REGULATIONS. Notwithstanding sec. 6 of this Act, the Department of Revenue 20 may proceed to adopt regulations to implement sec. 3 of this Act. The regulations take effect 21 under AS 44.62 (Administrative Procedure Act), but not before the effective date of sec. 3 of 22 this Act. 23 * Sec. 5. Section 4 of this Act takes effect immediately under AS 01.10.070(c). 24 * Sec. 6. Except as provided in sec. 5 of this Act, this Act takes effect January 1, 2005.