00                             HOUSE BILL NO. 48                                                                          
01 "An Act bearing the short title of the 'New Business Development Act'; and reducing the                                 
02 corporate income tax by two-thirds in the three years immediately after the                                             
03 incorporation of a new corporation not owned by an existing corporation or a new                                        
04 corporation in a separate line of business owned by an existing corporation."                                           
05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
06    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
07 to read:                                                                                                                
08       SHORT TITLE. This Act may be known as the New Business Development Act.                                           
09    * Sec. 2. AS 43.20.011(e) is amended to read:                                                                      
10            (e)  There is imposed for each taxable year upon the entire taxable income of                                
11       every corporation derived from sources within the state a tax. Except as provided in                          
12       (g) of this section, the tax is computed as follows:                                                          
13       If the taxable income is:       Then the tax is:                                                                  
14       Less than $10,000               1 percent of the taxable income                                                   

01       $10,000 but less than $20,000   $100 plus 2 percent of the taxable                                                
02                                          income over  $10,000                                                           
03       $20,000 but less than $30,000   $300 plus 3 percent of the taxable                                                
04                                          income over $20,000                                                            
05       $30,000 but less than $40,000   $600 plus 4 percent of the taxable                                                
06                                          income over $30,000                                                            
07       $40,000 but less than $50,000   $1,000 plus 5 percent of the taxable                                              
08                                          income over $40,000                                                            
09       $50,000 but less than $60,000   $1,500 plus 6 percent of the taxable                                              
10                                          income over $50,000                                                            
11       $60,000 but less than $70,000   $2,100 plus 7 percent of the taxable                                              
12                                          income over $60,000                                                            
13       $70,000 but less than $80,000   $2,800 plus 8 percent of the taxable                                              
14                                          income over $70,000                                                            
15       $80,000 but less than $90,000   $3,600 plus 9 percent of the taxable                                              
16                                          income over $80,000                                                            
17       $90,000 or more                 $4,500 plus 9.4 percent of the taxable                                            
18                                          income over $90,000.                                                           
19    * Sec. 3. AS 43.20.011 is amended by adding a new subsection to read:                                              
20            (g)  For the three taxable years immediately following incorporation, the tax                                
21       due under (e) of this section shall be reduced by two-thirds. The tax reduction                                   
22       provided by this subsection does not apply to the purchase of an existing corporation                             
23       or to the expansion of an existing corporation. The tax reduction provided by this                                
24       subsection does not apply to a new corporation that is owned 50 percent or more by a                              
25       person or combination of persons that also own 50 percent or more of a corporation                                
26       existing at the time of the incorporation of the new corporation, unless the new                                  
27       corporation is in a separate line of business. The commissioner of commerce,                                      
28       community, and economic development may adopt regulations that identify the                                       
29       method and means for determining whether a corporation is in a separate line of                                   
30       business. In this subsection, "separate line of business" means a business that provides                          
31       services or products that are materially different from the services or products of the                           

01       existing business; for purposes of a corporation engaged primarily in resource                                    
02       extraction, exploration is not a separate line of business from production.