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SB 50: "An Act imposing an annual educational facilities maintenance and construction tax on net earnings from self-employment and wages; relating to the administration and enforcement of the educational facilities maintenance and construction tax; and providing for an effective date."

00                             SENATE BILL NO. 50                                                                          
01 "An Act imposing an annual educational facilities maintenance and construction tax on                                   
02 net earnings from self-employment and wages; relating to the administration and                                         
03 enforcement of the educational facilities maintenance and construction tax; and                                         
04 providing for an effective date."                                                                                       
05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
06    * Section 1. AS 23.05.060 is amended to read:                                                                      
07        Sec. 23.05.060. Powers of the department. The department may                                                   
08                 (1)  enforce all state labor laws;                                                                      
09                 (2)  act as mediator and appoint deputy commissioners of conciliation                                   
10       in labor disputes whenever it considers the interest of industrial peace requires it;                             
11                 (3)  make investigations and collect and compile statistical information                                
12       concerning the conditions of labor generally and upon all matters relating to the                                 
13       enforcement of this chapter;                                                                                      
14                 (4)  institute court proceedings against an employer of labor without                                   
01       cost to the employee when it is satisfied that the employer has failed to pay an                                  
02       employee an amount due by contract;                                                                               
03                 (5)  issue cease and desist orders and other orders and regulations                                     
04       necessary for the enforcement of state labor laws;                                                                
05                 (6)  in accordance with AS 37.07 (the Executive Budget Act), receive                                    
06       and spend money derived from agreements with local governments, nongovernmental                                   
07       organizations, or other persons;                                                                              
08                 (7)  if requested under AS 43.45.021(e), collect or coordinate                                      
09       collection and reporting of the educational facilities maintenance and                                        
10       construction tax.                                                                                           
11    * Sec. 2. AS 43 is amended by adding a new chapter to read:                                                        
12        Chapter 45. Educational Facilities Maintenance and Construction Tax.                                           
13 Sec. 43.45.011. Tax imposed. (a) A tax of $30 is imposed on wages and on net                                          
14       earnings from self-employment of every                                                                            
15                 (1)  resident individual; and                                                                           
16 (2)  nonresident and part-year resident individual with income from a                                                   
17       source in the state.                                                                                              
18 (b)  For purposes of (a) of this section, the wages and the net earnings from                                           
19       self-employment of a                                                                                              
20 (1)  resident are the total annual wages and the net earnings from self-                                                
21       employment of the resident;                                                                                       
22 (2)  nonresident or part-year resident are the annual wages and the net                                                 
23 earnings from self-employment of the nonresident or part-year resident that are                                         
24       attributable to a source in the state.                                                                            
25 Sec. 43.45.021. Collection of tax by employer. (a) An employer shall deduct                                           
26 and withhold the tax due under AS 43.45.011 from an employee's wages subject to                                         
27 withholding under 26 U.S.C. 3401 - 3406 from the first regular payroll of the calendar                                  
28 year. If the employee's first payroll is insufficient to cover the tax due, the employer                                
29 shall continue to deduct and withhold from subsequent payrolls until the tax due under                                  
30 this chapter is fully withheld. The employer shall withhold any outstanding amount of                                   
31       tax due under AS 43.45.011 from the final regular payroll of the calendar year.                                   
01 (b)  An employer is liable for the tax required to be withheld from an employee                                         
02 unless the employer can demonstrate that the employer relied on proof provided by the                                   
03 employee that the total tax for the calendar year imposed under AS 43.45.011 had                                        
04 already been withheld under this section or paid under AS 43.45.031. A deduction of                                     
05 the tax may not be made from the wages of an individual who provides proof to the                                       
06 employer that the entire tax imposed under AS 43.45.011 on that individual for the                                      
07 calendar year has already been withheld or paid under AS 43.45.031. The department                                      
08 may impose a civil penalty on an employer in an amount up to five times the amount                                      
09 of tax due from employees but not remitted to the department. The penalty shall be                                      
10       imposed in the manner provided by AS 43.05.245.                                                                   
11 (c)  Tax withheld by an employer becomes due and shall be paid by an                                                    
12 employer to the department in accordance with regulations adopted by the department.                                    
13 (d)  An employer shall maintain a record of the amount deducted from the                                                
14 wages of each employee and shall furnish an annual statement of the deductions to                                       
15 each employee and to the department in accordance with regulations adopted by the                                       
16       department.                                                                                                       
17 (e)  The department shall, if it will result in cost savings for the state in the                                       
18 administration of the tax, for employers in the administration of the tax, or for both,                                 
19 coordinate collection and reporting of the tax imposed in this chapter with the                                         
20 collection and reporting of employment security contributions by the Department of                                      
21 Labor and Workforce Development, including requesting that the Department of                                            
22 Labor and Workforce Development collect the tax payments and remit them to the                                          
23       department.                                                                                                       
24            Sec. 43.45.031. Payment of tax by self-employed individual. A self-                                        
25 employed individual shall remit to the department the tax due under AS 43.45.011 in                                     
26       accordance with regulations adopted by the department.                                                            
27 Sec. 43.45.041. Refund of overpayments. (a) If an individual pays to the                                            
28 department, directly or through withholding by an employer, an amount exceeding the                                     
29 total tax imposed under this chapter during a calendar year and the individual applies                                  
30 for a refund in accordance with regulations adopted by the department, the department                                   
31       shall refund the overpayment to the individual.                                                                   
01            (b)  Interest on an overpayment may not be allowed under AS 43.05.280 if the                                 
02       department refunds the overpayment within 90 days after the date the individual                                   
03       correctly files the refund claim.                                                                                 
04            (c)  The department may adopt regulations to coordinate refunds of                                           
05       overpayments under this section with refunds of employment security contributions                                 
06       under AS 23.20.165.                                                                                               
07            (d)  An individual may apply for a refund under this section only during the                                 
08       calendar year immediately following the calendar year in which the excess was paid.                               
09            Sec. 43.45.051. Report of payments to self-employed individuals. A person                                  
10 required to report a payment to a self-employed individual to the federal government                                    
11 under 26 U.S.C. shall also report that payment to the department in accordance with                                     
12       regulations adopted by the department.                                                                            
13 Sec. 43.45.061. Disposition of tax proceeds. (a) The tax and penalties                                                
14 collected by the department under this chapter shall be deposited into the general fund                                 
15       and accounted for separately.                                                                                     
16 (b)  The legislature may appropriate the estimated amounts to be collected and                                          
17 separately accounted for under (a) of this section into the educational facilities                                      
18 maintenance and construction fund established under AS 37.05.560. Nothing in this                                       
19       section creates a dedicated fund.                                                                                 
20            Sec. 43.45.099. Definitions. In this chapter,                                                              
21                 (1)  "employee" has the meaning given in 26 U.S.C. 3401;                                                
22                 (2)  "employer" has the meaning given in 26 U.S.C. 3401;                                                
23 (3)  "net earnings from self-employment" has the meaning given in 26                                                    
24       U.S.C. 1402;                                                                                                      
25                 (4)  "wages" has the meaning given in 26 U.S.C. 3401.                                                   
26    * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to                          
27 read:                                                                                                                   
28 REGULATIONS. The Department of Revenue may adopt regulations to implement                                               
29 sec. 2 of this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act),                          
30 but not before the effective date of sec. 2 of this Act.                                                                
31    * Sec. 4. Section 3 of this Act takes effect immediately under AS 01.10.070(c).                                    
01    * Sec. 5. Except as provided in sec. 4 of this Act, this Act takes effect January 1, 2020.