SSHB 48: "An Act bearing the short title of the 'New Business Development Act'; and reducing the corporate income tax by two-thirds for the first three years of profitability of a new corporation not owned by an existing corporation or a new corporation in a separate line of business owned by an existing corporation."
00 SPONSOR SUBSTITUTE FOR 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 for the first three years of profitability of a new 03 corporation not owned by an existing corporation or a new corporation in a separate 04 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 $25,000 zero
01 $25,000 but less than $49,000 2 percent of the taxable income over 02 $25,000 03 $49,000 but less than $74,000 $480 plus 3 percent of the taxable 04 income over $49,000 05 $74,000 but less than $99,000 $1,230 plus 4 percent of the taxable 06 income over $74,000 07 $99,000 but less than $124,000 $2,230 plus 5 percent of the taxable 08 income over $99,000 09 $124,000 but less than $148,000 $3,480 plus 6 percent of the taxable 10 income over $124,000 11 $148,000 but less than $173,000 $4,920 plus 7 percent of the taxable 12 income over $148,000 13 $173,000 but less than $198,000 $6,670 plus 8 percent of the taxable 14 income over $173,000 15 $198,000 but less than $222,000 $8,670 plus 9 percent of the taxable 16 income over $198,000 17 $222,000 or more $10,830 plus 9.4 percent of the taxable 18 income over $222,000. 19 * Sec. 3. AS 43.20.011 is amended by adding a new subsection to read: 20 (g) For the first three taxable years of profitability following incorporation, 21 even if the three years are not consecutive, the tax due under (e) of this section shall be 22 reduced by two-thirds. The tax reduction provided by this subsection does not apply to 23 the purchase of an existing corporation or to the expansion of an existing corporation. 24 The tax reduction provided by this subsection does not apply to a new corporation that 25 is owned 50 percent or more by a person or combination of persons that also own 50 26 percent or more of a corporation existing at the time of the incorporation of the new 27 corporation, unless the new corporation is in a separate line of business. The 28 commissioner of commerce, community, and economic development may adopt 29 regulations that identify the method and means for determining whether a corporation 30 is in a separate line of business. In this subsection, "separate line of business" means a 31 business that provides services or products that are materially different from the
01 services or products of the existing business; for purposes of a corporation engaged 02 primarily in resource extraction, exploration is not a separate line of business from 03 production.