CSHB 37(W&M): "An Act relating to deposits into the dividend fund; relating to income of and appropriations from the earnings reserve account; relating to the taxation of income of individuals, partners, shareholders in S corporations, trusts, and estates; relating to a payment against the individual income tax from the permanent fund dividend disbursement; repealing tax credits applied against the tax on individuals under the Alaska Net Income Tax Act; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 37(W&M) 01 "An Act relating to deposits into the dividend fund; relating to income of and 02 appropriations from the earnings reserve account; relating to the taxation of income of 03 individuals, partners, shareholders in S corporations, trusts, and estates; relating to a 04 payment against the individual income tax from the permanent fund dividend 05 disbursement; repealing tax credits applied against the tax on individuals under the 06 Alaska Net Income Tax Act; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 37.05.565(a) is amended to read: 09 (a) There is established in the general fund the Alaska capital income fund 10 consisting of money appropriated [DEPOSITED TO THE FUND UNDER 11 AS 37.13.145(d) AND OF APPROPRIATIONS] to the fund. The fund shall be 12 invested by the Department of Revenue to yield competitive market rates as provided 13 in AS 37.10.071. Income earned on money in the fund may be appropriated to the
01 fund. 02 * Sec. 2. AS 37.13.010(a) is amended to read: 03 (a) Under art. IX, sec. 15, of the state constitution, there is established as a 04 separate fund the Alaska permanent fund. The Alaska permanent fund consists of 05 (1) 25 percent of all mineral lease rentals, royalties, royalty sale 06 proceeds, bonuses, net profit shares under AS 38.05.180(f) and (g), and federal 07 mineral revenue sharing payments received by the state [FROM MINERAL LEASES 08 ISSUED ON OR BEFORE DECEMBER 1, 1979, AND 25 PERCENT OF ALL 09 BONUSES RECEIVED BY THE STATE FROM MINERAL LEASES ISSUED ON 10 OR BEFORE FEBRUARY 15, 1980; 11 (2) 50 PERCENT OF ALL MINERAL LEASE RENTALS, 12 ROYALTIES, ROYALTY SALE PROCEEDS, NET PROFIT SHARES UNDER 13 AS 38.05.180(f) AND (g), AND FEDERAL MINERAL REVENUE SHARING 14 PAYMENTS RECEIVED BY THE STATE FROM MINERAL LEASES ISSUED 15 AFTER DECEMBER 1, 1979, AND 50 PERCENT OF ALL BONUSES RECEIVED 16 BY THE STATE FROM MINERAL LEASES ISSUED AFTER FEBRUARY 15, 17 1980]; and 18 (2) [(3)] any other money appropriated to or otherwise allocated by 19 law or former law to the Alaska permanent fund. 20 * Sec. 3. AS 37.13.140(b) is amended to read: 21 (b) The corporation shall determine the amount available for appropriation 22 each year. The amount available for appropriation is 5.25 percent of the average 23 market value of the fund for the first five of the preceding six fiscal years, including 24 the fiscal year just ended, computed annually for each fiscal year in accordance with 25 generally accepted accounting principles. In this subsection, "average market value of 26 the fund" includes the balance of the earnings reserve account established under 27 AS 37.13.145. The amount available for appropriation may not exceed the 28 balance in the earnings reserve account described in AS 37.13.145 [, BUT DOES 29 NOT INCLUDE THAT PORTION OF THE PRINCIPAL ATTRIBUTED TO THE 30 SETTLEMENT OF STATE V. AMERADA HESS, ET AL., 1JU-77-847 CIV. 31 (SUPERIOR COURT, FIRST JUDICIAL DISTRICT)].
01 * Sec. 4. AS 37.13.140(b), as amended by sec. 2, ch. 16, SLA 2018, is amended to read: 02 (b) The corporation shall determine the amount available for appropriation 03 each year. The amount available for appropriation is five percent of the average 04 market value of the fund for the first five of the preceding six fiscal years, including 05 the fiscal year just ended, computed annually for each fiscal year in accordance with 06 generally accepted accounting principles. In this subsection, "average market value of 07 the fund" includes the balance of the earnings reserve account established under 08 AS 37.13.145. The amount available for appropriation may not exceed the 09 balance in the earnings reserve account described in AS 37.13.145 [, BUT DOES 10 NOT INCLUDE THAT PORTION OF THE PRINCIPAL ATTRIBUTED TO THE 11 SETTLEMENT OF STATE V. AMERADA HESS, ET AL., 1JU-77-847 CIV. 12 (SUPERIOR COURT, FIRST JUDICIAL DISTRICT)]. 13 * Sec. 5. AS 37.13.145(b) is amended to read: 14 (b) Each [AT THE END OF EACH] fiscal year, the legislature may make 15 the following appropriations [CORPORATION SHALL TRANSFER] from the 16 earnings reserve account: 17 (1) an amount equal to 10 percent of the amount available for 18 appropriation under AS 37.13.140(b) to the dividend fund established under 19 AS 43.23.045; 20 (2) an amount equal to 90 percent of the amount available for 21 appropriation under AS 37.13.140(b) to the general fund [, 50 PERCENT OF THE 22 INCOME AVAILABLE FOR DISTRIBUTION UNDER AS 37.13.140]. 23 * Sec. 6. AS 37.13.145(c) is amended to read: 24 (c) After the appropriations made [TRANSFER] under (b) [AND AN 25 APPROPRIATION UNDER (e)] of this section, the legislature may appropriate 26 [CORPORATION SHALL TRANSFER] from the earnings reserve account to the 27 principal of the fund an amount sufficient to offset the effect of inflation on the 28 principal of the fund during that fiscal year. [HOWEVER, NONE OF THE AMOUNT 29 TRANSFERRED SHALL BE APPLIED TO INCREASE THE VALUE OF THAT 30 PORTION OF THE PRINCIPAL ATTRIBUTED TO THE SETTLEMENT OF 31 STATE V. AMERADA HESS, ET AL., 1JU-77-847 CIV. (SUPERIOR COURT,
01 FIRST JUDICIAL DISTRICT) ON JULY 1, 2004.] The corporation shall calculate 02 the amount to appropriate [TRANSFER] to the principal under this subsection by 03 (1) computing the average of the monthly United States Consumer 04 Price Index for all urban consumers for each of the two previous calendar years; 05 (2) computing the percentage change between the first and second 06 calendar year average; and 07 (3) applying that rate to the value of the principal of the fund on the 08 last day of the fiscal year just ended [, INCLUDING THAT PORTION OF THE 09 PRINCIPAL ATTRIBUTED TO THE SETTLEMENT OF STATE V. AMERADA 10 HESS, ET AL., 1JU-77-847 CIV. (SUPERIOR COURT, FIRST JUDICIAL 11 DISTRICT)]. 12 * Sec. 7. AS 37.13.150 is amended to read: 13 Sec. 37.13.150. Corporation budget. The revenue generated by the fund's 14 investments must be identified as the source of the operating budget of the corporation 15 in the state's operating budget under AS 37.07 (Executive Budget Act). The 16 unexpended balance of the corporation's annual operating budget does not lapse at the 17 end of the fiscal year but shall be treated as [INCOME AND] part of the market value 18 of the fund under AS 37.13.140. 19 * Sec. 8. AS 37.13.300(c) is amended to read: 20 (c) Net income from the mental health trust fund may not be included in the 21 computation of [NET INCOME OR] market value available for [DISTRIBUTION 22 OR] appropriation under AS 37.13.140. 23 * Sec. 9. AS 43.05.045(a) is amended to read: 24 (a) Except as provided in AS 43.22.075(h), or unless [UNLESS] an 25 exemption is granted under (b) of this section, a taxpayer required to submit a return 26 or report for a tax levied under this title or for any other tax administered by the 27 department shall submit the return or report electronically in a format prescribed by 28 the department. Failure to comply with this section may result in a civil penalty under 29 AS 43.05.220(f). If a law under this title requires a report or return or a portion of a 30 report or return to be in writing, an electronically filed report or return satisfies this 31 section. A taxpayer shall submit attachments to a report or return required under this
01 title electronically. 02 * Sec. 10. AS 43 is amended by adding a new chapter to read: 03 Chapter 22. Income Tax. 04 Sec. 43.22.010. Income tax on individuals. (a) Each calendar year or fraction 05 of a calendar year, an income tax is imposed on the income of a 06 (1) resident individual, trust, or estate; 07 (2) nonresident individual, trust, or estate that is derived from or 08 connected with a source in the state. 09 (b) The tax under this section for an individual or individuals filing jointly is 10 2.5 percent of taxable income. 11 (c) Two resident individuals who file a joint federal income tax return may 12 determine the tax imposed by this chapter jointly under this section. 13 (d) Two individuals who file a joint federal income tax return both or one of 14 whom is not a resident may elect to determine the tax imposed by this chapter either 15 (1) individually; or 16 (2) jointly as if both individuals were residents; the income of the 17 individuals filing jointly under this paragraph is not subject to the calculation under 18 AS 43.22.015. 19 Sec. 43.22.015. Calculation of tax on a nonresident individual. (a) Except as 20 otherwise provided in (b) of this section, the tax on a nonresident individual is the 21 product of 22 (1) the tax determined under AS 43.22.010(b) on the nonresident 23 individual's taxable income computed as if the nonresident individual were a resident 24 individual but taking a deduction under AS 43.22.030(b)(2); and 25 (2) a fraction, the 26 (A) numerator of which is the nonresident individual's income 27 taxable under AS 43.22.045; and 28 (B) denominator of which is the nonresident individual's 29 taxable income computed as if the nonresident individual were a resident 30 individual. 31 (b) If a nonresident individual's taxable income computed under (a)(2)(B) of
01 this section is less than the nonresident individual's income taxable under (a)(2)(A) of 02 this section, the tax imposed by this chapter is on the nonresident individual's taxable 03 income as computed under AS 43.22.045. 04 Sec. 43.22.020. Tax on trusts and estates. (a) A tax is imposed for each 05 taxable year or portion of a taxable year on the taxable income of a resident or 06 nonresident trust or estate. The tax under this section for a trust or estate is 2.5 percent 07 of taxable income. 08 (b) In this section, the taxable income of a nonresident trust or estate is the 09 income of the trust or estate that is derived from or connected with a source in the 10 state. 11 (c) A trust is not subject to tax under this chapter if 12 (1) all of the trustees of the trust are nonresidents; 13 (2) the entire corpus of the trust, including real, tangible, and 14 intangible property, is located outside the state; and 15 (3) no income or gains of the trust are derived from or connected with 16 a source in the state. 17 (d) For purposes of (c)(1) of this section, a trustee that is a nonresident 18 banking corporation at the time the banking corporation becomes a trustee is a 19 nonresident trustee even if the banking corporation later becomes a resident trustee 20 because it is acquired by or becomes an office or branch of a resident trustee. 21 (e) A trust that is exempt from federal income tax because of its purpose or 22 activities is not subject to tax under this chapter. 23 (f) A special needs trust or other trust established to provide solely for the 24 housing, living expenses, or medical care of a disabled beneficiary is not subject to tax 25 under this chapter. In this subsection, 26 (1) "disabled beneficiary" means an individual who has 27 (A) a physical or mental impairment that substantially limits 28 one or more major life activities; or 29 (B) a condition that may require the use of a prosthesis, special 30 equipment for mobility, or a service animal; 31 (2) "special needs trust" has the meaning given in AS 13.36.215(b).
01 Sec. 43.22.025. Credit for income taxes imposed by other jurisdictions. (a) 02 A resident individual, trust, or estate or part-year resident individual, trust, or estate is 03 allowed a credit against the tax due under this chapter for an income tax that was 04 imposed on the resident or part-year resident for the taxable year by another state or 05 the political subdivision of another state on income derived from or connected with 06 that state or political subdivision. 07 (b) A credit allowed under (a) of this section 08 (1) for a resident individual, trust, or estate may not exceed the 09 individual's, trust's, or estate's tax due under this chapter before credits are applied, 10 multiplied by a fraction, the numerator of which is the portion of the individual's, 11 trust's, or estate's taxable income that is derived from or connected with a source in 12 another state or the political subdivision of another state and the denominator of which 13 is the resident individual's, trust's, or estate's taxable income; 14 (2) for a part-year resident individual, trust, or estate may not exceed 15 the individual's, trust's, or estate's tax due for the period of state residency before 16 credits are applied, multiplied by a fraction, the numerator of which is the individual's, 17 trust's, or estate's taxable income derived from or connected with a source in another 18 state or the political subdivision of another state during the period of state residency 19 and the denominator of which is the part-year resident individual's, trust's, or estate's 20 taxable income during the period of state residency; 21 (3) may not reduce the tax due under this chapter to less than the tax 22 that would have been due if the income derived from or connected with a source in 23 another state or the political subdivision of another state and subject to taxation by the 24 other state or political subdivision had been excluded from the resident or part-year 25 resident individual's, trust's, or estate's taxable income during the calculation of tax 26 under this chapter before the application of credits. 27 (c) If the tax administration of another state or a political subdivision of 28 another state determines that a taxpayer has overpaid tax, affecting the computation of 29 the credit allowed under this section for any taxable year, the taxpayer shall file an 30 amended return with the department not later than 90 days after the final determination 31 by the state or political subdivision that the tax was overpaid. The department may
01 assess a taxpayer additional tax, proportional to the amount overpaid in the other state 02 or political subdivision. 03 (d) A taxpayer is not allowed a credit under this section for taxes paid to 04 another jurisdiction if the taxpayer claims a credit against the income tax imposed by 05 the other jurisdiction for the tax payable under this chapter. 06 (e) Income tax imposed on a partner or the shareholder of an S corporation on 07 the income of the partnership or S corporation, including tax paid by the partnership or 08 S corporation to satisfy the tax liability of the partner or shareholder, may be included 09 in the calculation of a credit under this section. Tax imposed on the partnership or S 10 corporation that is the direct liability of the partnership or S corporation and not that of 11 the partner or shareholder may not be included in the calculation of a credit under this 12 section. 13 Sec. 43.22.030. Taxable income; general rule. (a) In this chapter, taxable 14 income is the taxpayer's federal adjusted gross income for the taxable year 15 (1) plus, if not already included in federal adjusted gross income, 16 (A) interest on obligations of another state, a political 17 subdivision of another state, the public instrumentality of another state, or the 18 local authority of another state; 19 (B) a loss on the sale or exchange of an obligation issued by or 20 on behalf of 21 (i) the state; 22 (ii) a municipality of the state; or 23 (iii) a public instrumentality, public authority, or public 24 corporation created under state law; 25 (C) a loss from the sale or exchange of shares in a unit 26 investment trust if the loss is attributable to an obligation issued by or on 27 behalf of 28 (i) the state; 29 (ii) a municipality of the state; or 30 (iii) a public instrumentality, public authority, or public 31 corporation created under state law;
01 (D) interest or dividends on obligations or securities issued by 02 the United States, or an authority, commission, or instrumentality of the United 03 States, that the Internal Revenue Code exempts from federal income tax; 04 (E) income taxes under this chapter; 05 (F) a gain realized but not recognized under 26 U.S.C. 1031 06 (Internal Revenue Code); 07 (G) a deduction allowed in the determination of federal 08 adjusted gross income that is directly or indirectly related to income that is not 09 taxable under this chapter; and 10 (H) income of an incomplete gift nongrantor trust to which a 11 taxpayer transferred property, less deductions of the trust, if 12 (i) the income and deductions of the trust would be 13 taken into account in computing the taxpayer's federal taxable income 14 if the trust in its entirety was treated as a grantor trust under the Internal 15 Revenue Code; 16 (ii) the trust is a resident trust; 17 (iii) the trust does not qualify as a grantor trust under 26 18 U.S.C. 671 - 679 (Internal Revenue Code); and 19 (iv) the grantor's transfer of assets to the trust is treated 20 as an incomplete gift under 26 U.S.C. 2511 (Internal Revenue Code); 21 (2) minus, if included in federal adjusted gross income, 22 (A) interest income or a dividend from an obligation that is 23 exempt from taxation by a state under federal law; 24 (B) a refund or credit for the overpayment of an income tax; 25 (C) an ordinary and necessary expense, including an interest 26 expense, paid or incurred during the taxable year, that is directly or indirectly 27 related to income exempt under the Internal Revenue Code but taxable by the 28 state; 29 (D) a gain recognized under 26 U.S.C. 1031 (Internal Revenue 30 Code) that was included in federal adjusted gross income under (1) of this 31 subsection;
01 (E) income exempt under 4 U.S.C. 114; 02 (F) compensation prohibited from state taxation by 50 U.S.C. 03 3901 - 4043 (Servicemembers Civil Relief Act); 04 (G) a gain from the sale or exchange of an obligation issued by 05 or on behalf of 06 (i) the state; 07 (ii) a municipality of the state; or 08 (iii) a public instrumentality, public authority, or public 09 corporation created under state law; 10 (H) a permanent fund dividend received by the taxpayer or the 11 taxpayer's dependent under AS 43.23. 12 (b) In addition to the adjustments made to taxable income under (a) of this 13 section, a taxpayer may receive a standard deduction. The deduction under this 14 subsection for 15 (1) an individual resident taxpayer is $12,550; 16 (2) an individual resident who files federal income taxes as a head of 17 household is $18,800; 18 (3) two resident taxpayers filing jointly is $25,100; 19 (4) an individual nonresident is the product of $12,550 and a fraction, 20 the numerator of which is the nonresident individual's income taxable under 21 AS 43.22.045, computed without the deduction under this subsection, and the 22 denominator of which is the nonresident individual's taxable income computed as if 23 the nonresident individual were a resident individual and without the deduction under 24 this subsection; the deduction under this paragraph may not exceed $12,550 for each 25 exemption claimed; 26 (5) an individual nonresident who files federal income taxes as a head 27 of household is the product of $18,800 and a fraction, the numerator of which is the 28 nonresident individual's income taxable under AS 43.22.045, computed without the 29 deduction under this subsection, and the denominator of which is the nonresident 30 individual's taxable income computed as if the nonresident individual were a resident 31 individual and without the deduction under this subsection; the deduction under this
01 paragraph may not exceed $18,800 for each exemption claimed; 02 (6) two nonresident individuals filing jointly is the product of $25,100 03 and a fraction, the numerator of which is the nonresident individuals' income taxable 04 under AS 43.22.045, computed without the deduction under this subsection, and the 05 denominator of which is the nonresident individuals' taxable income computed as if 06 the nonresident individuals were resident individuals and without the deduction under 07 this subsection; the deduction under this paragraph may not exceed $25,100 for each 08 exemption claimed. 09 (c) The deduction under (b) of this section may not 10 (1) be claimed by a trust; 11 (2) reduce a taxpayer's tax liability under this chapter to below zero. 12 (d) When calculating taxable income, a taxpayer 13 (1) may not carry back a net operating loss under 26 U.S.C. 14 172(b)(1)(A)(i) (Internal Revenue Code); 15 (2) may carry over a net operating loss under 26 U.S.C. 16 172(b)(1)(A)(ii) (Internal Revenue Code), except that a loss may not be carried over 17 for more than five years; for a taxpayer subject to AS 43.19 (Multistate Tax Compact), 18 the amount of a net operating loss allowed to be carried over is limited to the amount 19 apportioned to the state in the taxable year in which the loss was generated under 20 AS 43.19 (Multistate Tax Compact); 21 (3) shall include the modifications required by AS 43.20.144(b)(2), 22 concerning intangible drilling and development costs, AS 43.20.144(b)(3), concerning 23 percentage depletion, and AS 43.20.144(b)(4), concerning depreciation. 24 Sec. 43.22.035. Taxable income from partnerships and S corporations. (a) 25 A partner or shareholder shall make an adjustment described in AS 43.22.030 to 26 income or a gain, loss, or deduction from a partnership or S corporation in proportion 27 to a partner's distributive share of a partnership or a shareholder's pro rata share of an 28 S corporation. If a partner's distributive share or a shareholder's pro rata share of an 29 adjustment is not required to be accounted for separately for federal income tax 30 purposes, the partner's or shareholder's share of the adjustment must be determined in 31 proportion to the partner's or shareholder's share of partnership or S corporation
01 income or losses for federal income tax purposes. 02 (b) In determining taxable income, a partner or shareholder shall treat income 03 or a gain, loss, or deduction from a partnership or S corporation as if it has the same 04 character as it does for federal income tax purposes. If income or a gain, loss, or 05 deduction from a partnership or S corporation is not accounted for separately for 06 federal income tax purposes, a partner or shareholder shall treat the income, gain, loss, 07 or deduction as if it were realized directly from the source from which it was realized 08 by the partnership or S corporation or incurred in the same manner it was incurred by 09 the partnership or S corporation. 10 (c) If the principal purpose of a special allocation of partnership income or a 11 gain, loss, or deduction is the evasion of tax under this chapter, the partner's 12 distributive share is determined as if the partnership agreement did not have the 13 special allocation. In this subsection, "special allocation" means an allocation of the 14 distributive share of partnership income or a gain, loss, or deduction made under the 15 partnership agreement to a partner in a proportion different than the partner's 16 partnership interest. 17 Sec. 43.22.040. Taxable income of an estate, trust, or beneficiary. (a) The 18 taxable income of an estate or trust is determined as if the estate or trust were an 19 individual and is subject to adjustments under AS 43.22.030 and reduction under 26 20 U.S.C. 661 (Internal Revenue Code). The department may establish in regulation the 21 method for determining the taxable income of an estate or trust, including the manner 22 in which the adjustments under AS 43.22.030 will be allocated between the estate's or 23 trust's taxable share and a beneficiary's distributive share. Unless otherwise provided 24 by the department in regulation, an allocation must be made in proportion to the 25 estate's or trust's taxable share or the beneficiary's distributive share of the trust or 26 estate for federal income tax purposes. 27 (b) If the principal purpose of a provision of an instrument directing the 28 distribution of income or a gain, loss, or deduction of an estate or trust is the evasion 29 of tax under this chapter, the taxable income of the estate, trust, or beneficiary will be 30 determined as if the instrument did not contain the provision. 31 Sec. 43.22.045. Nonresident individuals; income derived from or
01 connected with a source in the state. (a) The taxable income of a nonresident 02 individual is the nonresident individual's income derived from or connected with a 03 source in the state, as adjusted under AS 43.22.030. The taxable income of a 04 nonresident individual includes 05 (1) a partner's distributive share of income or a gain, loss, or deduction 06 of the partnership, as determined under AS 43.22.050; 07 (2) a shareholder's pro rata share of an S corporation's income or loss, 08 increased by the reductions for taxes described in 26 U.S.C. 1366(f)(2) and (3) 09 (Internal Revenue Code), as determined under AS 43.22.050; 10 (3) income or loss of a business conducted by a nonresident individual, 11 nonresident estate, or nonresident trust, other than income or loss from a partnership or 12 S corporation, as determined under AS 43.22.050; 13 (4) estate or trust income or a gain, loss, or deduction of the estate or 14 trust, as determined under AS 43.22.055; 15 (5) income or a gain, loss, or deduction from the sale or assignment of 16 a beneficial interest, or other disposition of an interest in tangible personal property in 17 the state, or rental income or loss from the use of tangible personal property in the 18 state; if the income, gain, loss, or deduction is from tangible personal property used or 19 employed both in and outside the state, the amount included in taxable income is 20 determined by multiplying the income, gain, loss, or deduction by a fraction, the 21 numerator of which is the number of days during which the property was used or 22 employed to earn, accrue, or incur the income, gain, loss, or deduction in the state and 23 the denominator of which is the total number of days during the taxable year that the 24 property was used or employed to earn, accrue, or incur the income, gain, loss, or 25 deduction; 26 (6) income or a gain, loss, or deduction from the sale, assignment, or 27 other disposition of an interest in real property in the state, or rental income or loss 28 from the use of real property in the state, including the percentage of ordinary and 29 capital gains received from a real estate investment trust, as defined in 26 U.S.C. 856 30 (Internal Revenue Code), that is attributable to rents from or sale or other disposition 31 of real property located in the state; in this paragraph, income or a gain, loss, or
01 deduction from the sale, assignment of a beneficial interest, or other disposition of real 02 property in the state includes income or a gain, loss, or deduction derived from the sale 03 or assignment of a beneficial interest in a partnership, S corporation, nonpublicly 04 traded C corporation with 100 or fewer shareholders, estate, or trust, if the entity owns 05 real property in the state that has a fair market value equal to or exceeding 50 percent 06 of all assets of the entity on the date of sale, assignment, or other disposition of the 07 taxpayer's interest in the entity; for purposes of this paragraph, 08 (A) only assets owned for at least two years before the date of 09 the sale, assignment, or other disposition of an interest in the entity shall be 10 used to determine the fair market value of all of the assets of the entity on the 11 date of sale, assignment, or other disposition; and 12 (B) the amount of income or a gain, loss, or deduction derived 13 from or connected with a source in the state from the sale, assignment, or other 14 disposition of an interest in an entity that is subject to the provisions of this 15 paragraph is the amount recognized for federal income tax purposes related to 16 the sale, assignment, or disposition, multiplied by a fraction, the numerator of 17 which is the fair market value of the real property located in the state on the 18 date of sale, assignment, or disposition and the denominator of which is the fair 19 market value of all of the assets of the entity on the date of the sale, 20 assignment, or disposition; 21 (7) compensation, salary, or wages for personal services rendered or 22 performed in the state that are derived from a business, trade, profession, occupation, 23 or employment carried on in the state; for purposes of this paragraph, personal 24 services 25 (A) except as otherwise provided in (B) of this paragraph, 26 include services performed 27 (i) in connection with presenting or receiving 28 employment-related training or education in the state; 29 (ii) in connection with a site inspection, review, 30 analysis, or management or any other supervision of a facility located 31 in the state;
01 (iii) in connection with research and development at a 02 facility located in the state or in connection with the installation of new 03 or upgraded equipment or systems at that facility; 04 (iv) as part of a project team working on the attraction 05 or implementation of new investment in a facility located or planned to 06 be located in the state; 07 (v) in connection with fishing, farming, or agriculture in 08 the state; or 09 (vi) for the federal government; 10 (B) do not include services that are casual, isolated, 11 inconsequential, or ancillary to out-of-state services; 12 (8) income derived from a business, trade, profession, occupation, or 13 employment carried on in the state, including income 14 (A) received under a covenant not to compete, a severance 15 agreement, a termination agreement, or unemployment compensation 16 insurance attributable to a business, trade, profession, occupation, or 17 employment previously carried on in the state, regardless of when received; 18 (B) derived from a business, trade, profession, occupation, or 19 employment carried on in the state by an individual who maintains or operates 20 an office, shop, store, warehouse, boat, plane, factory, agency, or other place 21 where the individual's affairs are systematically and regularly carried on, 22 regardless of other transactions carried on outside the state; this subparagraph 23 does not include income from an activity of an individual whose presence in 24 the state is casual, isolated, inconsequential, or ancillary to out-of-state 25 activities, except that, if a business, trade, profession, occupation, or 26 employment is carried on partly in and partly outside the state, other than for 27 the rendering of purely personal services by the individual, the taxable income 28 derived from or connected with a source in the state is determined under 29 AS 43.19 (Multistate Tax Compact) and AS 43.22.030; 30 (9) income from the management or investment function or activities 31 conducted in the state from intangible property;
01 (10) dividends, interest, payments received under an annuity, gains, or 02 other intangible income received from, or attributable to, intangible personal property, 03 including stock, bonds, notes, bank deposits, or annuities, if the intangible personal 04 property is employed in a business, trade, profession, occupation, or employment 05 carried on in the state; 06 (11) a gain derived from a statutory stock option, restricted stock, 07 nonstatutory stock option, or stock appreciation right by a nonresident individual who, 08 at the time the gain is received, performs services in the state for or is employed in the 09 state by the corporation granting the option, stock, or right, as determined in 10 regulations adopted by the department; 11 (12) income from nonqualified deferred compensation plans 12 attributable to services performed in the state, including compensation included in 13 federal gross income under 26 U.S.C. 457A (Internal Revenue Code); 14 (13) proceeds from a gambling activity conducted in the state or lottery 15 tickets purchased in the state, including payments received from a third party for the 16 transfer of the rights to future proceeds related to a gambling activity in the state or 17 lottery tickets purchased in the state; 18 (14) for an S corporation that terminates its taxable status in the state 19 during the tax year, income or a gain recognized on the receipt of payments from an 20 installment sale contract entered into at the time the S corporation was subject to tax in 21 the state, allocated in a manner consistent with the applicable methods and rules under 22 this chapter; 23 (15) royalties or other compensation received for the use of a patent, 24 copyright, secret process or formula, good will, mark, trade brand, franchise, or other 25 property having a taxable or business situs in the state; 26 (16) royalties or other compensation received for the use of a patent if 27 the patent is employed in production, fabrication, manufacturing, or other process in 28 the state; 29 (17) income or a gain from the disposition of an asset if the 30 acquisition, management, or disposition of the asset constitutes an integral part of the 31 nonresident individual's regular trade or business operation;
01 (18) income from the transmission, broadcast, distribution, or 02 dissemination of a service directly or indirectly attributable to the performance in the 03 state of an athlete, entertainer, singer, musician, dancer, comedian, magician, 04 performing artist, actor, actress, or similar person, including syndication fees. 05 (b) A deduction included in taxable income that results from a capital loss, 06 passive activity loss, or net operating loss must be based solely on income or a gain, 07 loss, or deduction derived from or connected with a source in the state. A nonresident 08 individual shall treat a deduction under this subsection in the same manner as the 09 corresponding federal deduction, unless the department requires otherwise in 10 regulation. 11 Sec. 43.22.050. Business conducted by a nonresident individual, trust, or 12 estate; income derived from or connected with a source in the state. (a) The 13 department shall adopt regulations governing the amount of income or the amount of a 14 gain, loss, or deduction from a business conducted by a nonresident individual, trust, 15 or estate that is derived from or connected with a source in the state for purposes of 16 determining taxable income. Regulations adopted under this subsection must be 17 consistent with AS 43.19 (Multistate Tax Compact) and AS 43.22.045 and include 18 adjustments under AS 43.22.030. 19 (b) The department shall adopt regulations governing the amount of income or 20 the amount of a gain, loss, or deduction that is derived from or connected with a 21 source in the state and is included in a nonresident 22 (1) partner's distributive share for purposes of taxation under this 23 chapter; 24 (2) shareholder's pro-rata share of an S corporation for purposes of 25 taxation under this chapter. 26 (c) The department may by regulation require a taxpayer to allocate rather 27 than apportion income or a gain, loss, or deduction under this section. 28 Sec. 43.22.055. Nonresident trust, estate, or beneficiary; income derived 29 from or connected with a source in the state. (a) The department shall adopt 30 regulations governing whether income or a gain, loss, or deduction of a nonresident 31 estate or nonresident trust is included in taxable income derived from or connected
01 with a source in the state. Regulations adopted under this subsection must be 02 consistent with the remainder of this section and AS 43.22.045. 03 (b) A nonresident beneficiary shall include in taxable income derived from or 04 connected with a source in the state a distribution from an estate or trust as if the 05 nonresident beneficiary earned or incurred the income or a gain, loss, or deduction 06 attributable to the distribution directly from the source. For purposes of this 07 subsection, the department may establish one or more methods for a nonresident 08 beneficiary to determine whether income or a gain, loss, or deduction is attributable to 09 a distribution. The department shall consistently apply a method from year to year and 10 apply the same method to other nonresident beneficiaries of the same trust or estate. 11 Nothing in this subsection requires the department to give effect to a provision of an 12 instrument creating an estate or trust if the department reasonably believes that the 13 principal purpose of the provision is to evade the tax imposed under this chapter. 14 Sec. 43.22.060. Part-year resident individual, trust, or estate; residency 15 income; income derived from or connected with a source in the state. (a) Except as 16 otherwise provided in this section, the taxable income of a part-year resident 17 individual, trust, or estate is the sum of 18 (1) the taxable income of the part-year resident individual, trust, or 19 estate during the period of residency; and 20 (2) the taxable income derived from or connected with a source in the 21 state for the period of nonresidency of the individual, trust, or estate. 22 (b) The department shall adopt regulations to determine the taxable income of 23 a part-year resident taxpayer who is granted a statutory stock option, restricted stock, 24 nonstatutory stock option, or a stock appreciation right and who, during the grant 25 period, performs services in the state for, or is employed in the state by, the 26 corporation granting the option, stock, or right. 27 Sec. 43.22.065. Personal service corporations and S corporations formed 28 or used to evade income tax. (a) The department may allocate all income, 29 deductions, credits, exclusions, and other allowances between a personal service 30 corporation or S corporation and its employee-owners if the 31 (1) personal service corporation or S corporation performs
01 substantially all of its services for or on behalf of another corporation, partnership, or 02 other entity and the effect is the evasion of income tax; and 03 (2) allocation is necessary to reflect the source and amount of the 04 income, regardless of whether the corporation is otherwise taxable. 05 (b) For purposes of this section, evasion of income tax occurs when a personal 06 service corporation or S corporation is used to 07 (1) reduce the taxable income of a resident or the taxable income of a 08 nonresident derived from or connected with a source in the state; or 09 (2) secure the benefit of an expense, deduction, credit, exclusion, or 10 other allowance for any employee-owner that would not otherwise apply under this 11 chapter. 12 (c) The constructive ownership of stock rules under 26 U.S.C. 318 (Internal 13 Revenue Code) apply to this section, except that "5 percent" shall be substituted for 14 "50 percent" in 26 U.S.C. 318(a)(2)(C) (Internal Revenue Code). 15 (d) In this section, all persons specified in 26 U.S.C. 267(b) (Internal Revenue 16 Code) shall be treated as one entity. 17 (e) In this section, 18 (1) "employee-owner" means any employee who owns, on any day 19 during the taxable year, more than 10 percent of the outstanding stock of a personal 20 service corporation or S corporation; 21 (2) "personal service corporation" means a corporation whose principal 22 activity is the performance of personal services that are substantially performed by the 23 employee-owners of the corporation. 24 Sec. 43.22.070. Determination of taxable year and method of accounting. 25 (a) For purposes of the tax imposed under this chapter, a taxpayer's 26 (1) taxable year is the same as the taxpayer's taxable year for federal 27 income tax purposes; and 28 (2) method of accounting is the same as the taxpayer's method of 29 accounting for federal income tax purposes. 30 (b) The department shall adopt regulations to determine the taxable income of 31 a taxpayer whose method of accounting changes during a taxable year or between
01 taxable years. 02 Sec. 43.22.075. Returns and payment of taxes. (a) A taxpayer shall file with 03 the department a return setting out 04 (1) the amount of tax due under this chapter; and 05 (2) other information necessary to carry out this chapter, as required by 06 the department in regulation. 07 (b) A person required to file a return under this chapter shall file the return on 08 a form or in a format prescribed by the department. The return is due to the department 09 at the same time and in the same manner, including extensions, as the taxpayer's 10 federal income tax return to the United States Internal Revenue Service. A return filed 11 under this chapter must be made under oath and on penalty of perjury. 12 (c) The total amount of tax imposed by this chapter is due and payable to the 13 department at the same time and in the same manner as the federal individual income 14 tax payable to the United States Internal Revenue Service. 15 (d) A taxpayer, upon request by the department, shall furnish to the 16 department a true and correct copy of a return that the taxpayer has filed with the 17 United States Internal Revenue Service. 18 (e) A taxpayer shall notify the department in writing of an alteration in, or 19 modification of, the taxpayer's federal income tax return and of a recomputation of tax 20 or determination of deficiency, whether with or without assessment. A full statement 21 of the facts must accompany the notice. A taxpayer shall file the notice not later than 22 60 days after the final determination of the alteration, modification, recomputation, or 23 deficiency and shall pay any additional tax due under this chapter at that time. In this 24 subsection, "final determination" means the time that an amended federal return is 25 filed, a notice of deficiency or an assessment is mailed to the taxpayer by the Internal 26 Revenue Service, and the taxpayer has exhausted rights of appeal under federal law. 27 (f) The department may credit or refund overpayments of taxes, taxes 28 erroneously or illegally assessed or collected, penalties collected without authority, 29 and taxes that are found unjustly assessed or excessive in amount, or otherwise 30 wrongfully collected. The department shall, in regulation, set limitations, specify the 31 manner in which claims for credits or refunds are made, and give notice of allowance
01 or disallowance. When a refund is allowed to a taxpayer, the refund may be paid out 02 of the general fund on a warrant issued under a voucher approved by the department. 03 (g) A partnership, S corporation, estate, or trust shall provide to its partners, 04 beneficiaries, or shareholders, and to the department, all information necessary for its 05 partners, beneficiaries, and shareholders to comply with this chapter. 06 (h) An individual is not required to file a return under this section 07 electronically, but a person employed to prepare and file an income tax return for an 08 individual shall file the return for that individual electronically. 09 (i) The department shall adopt regulations that set out requirements for a 10 spouse, upon request, to be partially or fully relieved from joint and several liability 11 resulting from the joint filing of a tax return. 12 Sec. 43.22.080. Tax withholding on wages of individuals. (a) Every 13 employer making payment of wages or salaries 14 (1) shall deduct and withhold an amount of tax computed in a manner 15 to approximate the amount of tax due on those wages and salaries under this chapter 16 for that taxable year; 17 (2) shall remit the tax withheld to the department accompanied by a 18 return on a form prescribed by the department at the times required by the department 19 by regulation; 20 (3) is liable for the payment of the tax required to be deducted and 21 withheld under this section but is not liable to any individual for the amount of the 22 payment; and 23 (4) shall furnish to an employee on or before January 31 of the 24 succeeding year, or within 30 days after a request by the employee after an employee's 25 or individual's termination if the 30-day period ends before January 31, a written 26 statement on a form prescribed by the department showing 27 (A) the name and taxpayer identification number of the 28 employer; 29 (B) the name and social security number of the employee; 30 (C) the total amount of wages and salary for the taxable year; 31 and
01 (D) the total amount deducted and withheld as tax under this 02 chapter for the taxable year. 03 (b) The department shall publish the rate of withholding required by this 04 section. 05 Sec. 43.22.085. Withholding on nonresident partners; composite returns. 06 (a) Unless otherwise provided by this section, a partnership that is required to file an 07 annual information return under subchapter K of the Internal Revenue Code (26 08 U.S.C. 701 - 761) shall file a partnership return as prescribed by the department and 09 shall report any income, gains, losses, or deductions that are derived from or 10 connected with a source in the state, as determined under this chapter. 11 (b) A partnership that is required to file a return under (a) of this section shall 12 withhold income tax from a nonresident partner's distributive share of the partnership's 13 income or a gain, loss, or deduction derived from or connected with a source in the 14 state at the highest marginal income tax rate applicable to individuals for the taxable 15 year. 16 (c) Withholding under this section is not required by a partnership that 17 (1) is a publicly traded partnership, as defined in 26 U.S.C. 7704(b) 18 (Internal Revenue Code); and 19 (2) files with the department an annual information return reporting the 20 name, address, taxpayer identification number, and other information requested by the 21 department concerning each unitholder whose distributive share of partnership 22 income, regardless of source, is more than $1,000. 23 (d) The department shall adopt regulations that allow a partnership subject to 24 withholding under this section to file a composite return. 25 Sec. 43.22.090. Permanent fund tax payment. The department shall adopt 26 regulations establishing procedures for an individual eligible for a dividend under 27 AS 43.23.005 to direct the department to hold all or a part of the amount of the 28 dividend to pay the tax due under this chapter. The amount held under this section 29 may not exceed the dividend amount after contributions, garnishments, levies, fees, 30 attachments, assignments, or other reductions or donations allowed under AS 43.23. 31 The department shall apply the amount held under this section to tax owed in the
01 taxable year in which the taxpayer applies for the dividend. The department shall 02 refund the amount of the dividend not applied against taxes under this section to the 03 individual who appears on the application for the dividend. 04 Sec. 43.22.095. Administration. (a) The department shall adopt necessary 05 regulations and forms to implement and interpret this chapter, including regulations 06 and forms for the electronic filing and payment of tax due under this chapter. Federal 07 regulations issued under the Internal Revenue Code shall be considered persuasive 08 authority in interpreting any provision of the Internal Revenue Code on which the tax 09 imposed by this chapter relies, whether or not a federal regulation has been 10 specifically incorporated into a department regulation, unless the federal regulation 11 (1) conflicts with a provision of this chapter; 12 (2) conflicts with a regulation adopted by the department; or 13 (3) is inconsistent with the purposes of this chapter. 14 (b) A transaction or payment between related persons must have economic 15 substance, must serve a bona fide business purpose, and must not have occurred for 16 the primary purpose of lowering the tax due under this chapter. The department, after 17 review or audit of a taxpayer's return, may determine whether there is sufficient 18 documentation or whether a transaction or payment meets the requirements of this 19 subsection. If the department determines that the documentation, transaction, or 20 payment fails to meet the requirements of this subsection, the department may adjust 21 the amount of a payment or transaction, disregard the payment or transaction, or make 22 another adjustment necessary for determining the tax under this chapter. If a payment 23 in an amount greater than $500,000 is made or required to be made from one person to 24 a related person, the related persons shall submit documentation substantiating that the 25 amount of the payment is consistent with 26 U.S.C. 482 (Internal Revenue Code). 26 Payments subject to this subsection include payments for interest, royalties, 27 management fees, services, inventory, tangible personal property, intangible property, 28 and real property. 29 (c) A tax deficiency assessed by the department under this section is assumed 30 to be correct. A taxpayer has the burden of proving that the tax deficiency is 31 erroneous.
01 (d) The department shall adjust the amount of the exemption under 02 AS 43.22.030(b) annually for inflation. Adjustments must be consistent with inflation 03 adjustments made by the Internal Revenue Service to the federal individual income tax 04 standard deduction. The department shall round amounts under this subsection to the 05 nearest $100 and publish the adjusted amounts. 06 (e) The tax collected by the department under this chapter shall be deposited 07 into the general fund and accounted for separately. 08 Sec. 43.22.100. References to Internal Revenue Code. (a) Sections 26 U.S.C. 09 6654, 6662, 6664, 6694, 6695, 6700 - 6702, 6707, 6713, 7201, 7202, 7206, 7207, 10 7216, 7407, and 7408 (Internal Revenue Code), as those sections read on January 1, 11 2020, are incorporated by reference as a part of this chapter and, if conflicting, 12 supersede provisions in AS 43.05 and AS 43.10. 13 (b) When provisions of the Internal Revenue Code incorporated by reference 14 under (a) of this section refer to rules and regulations adopted by the United States 15 Commissioner of Internal Revenue, they are regarded as regulations adopted by the 16 department under this chapter, unless the department adopts specific regulations in 17 their place. 18 Sec. 43.22.105. Information released to a banking institution. 19 Notwithstanding AS 43.05.230, information on an individual income tax return may 20 be released to a banking institution to verify the direct deposit of an income tax refund 21 or correct an error in that deposit. 22 Sec. 43.22.150. Definitions. In this chapter, 23 (1) "domicile" means an individual's true, fixed, principal, and 24 permanent home, to which the individual intends to return even if currently living 25 elsewhere; if an individual has two or more homes, "domicile" means the home that 26 the individual regards and uses as the individual's more permanent home; once 27 established, a domicile remains the individual's domicile until the individual 28 demonstrates a real change of intent and moves to a new domicile; indications of 29 domicile include the 30 (A) location of the place of employment of the individual; 31 (B) location of real property owned by the individual;
01 (C) registration and physical location of motor vehicles, planes, 02 boats, and snow machines owned by the individual; 03 (D) location of a bank account or active checking account of 04 the individual; 05 (E) address where the individual receives mail; 06 (F) location of a school where the individual or a member of 07 the individual's immediate family 08 (i) attends; or 09 (ii) receives resident tuition; 10 (G) location of an organization of which the individual is a 11 member; 12 (H) location of a parent, child, grandchild, or great-grandchild; 13 (I) location of dental and medical personnel that provide 14 services to the individual on a regular or consistent basis; 15 (J) filing of a prior year tax return by the individual as a 16 resident or nonresident; 17 (K) location where an individual is registered to vote; 18 (L) location where an individual holds a resident fishing, 19 hunting, or trapping license; 20 (2) "federal adjusted gross income" has the meaning given to "adjusted 21 gross income" in 26 U.S.C. 62; 22 (3) "fiduciary" means a guardian, trustee, executor, administrator, 23 receiver, or conservator or a person, whether individual or corporate, acting in a 24 similar position of special confidence toward another; 25 (4) "head of household" means a single taxpayer, or married taxpayer 26 where both spouses file separate returns, with a qualified dependent living in the same 27 home for more than half the taxable year; 28 (5) "Internal Revenue Code" means the Internal Revenue Code (26 29 U.S.C. 1 et seq.), as amended; 30 (6) "irrevocable trust" means a trust or portion of a trust that is not 31 subject to a power to revest title in a person whose property constitutes the trust or a
01 portion of the trust; 02 (7) "nonresident estate" means an estate other than a resident estate or 03 part-year resident estate; 04 (8) "nonresident individual" means an individual who is not a resident 05 of the state for any portion of the taxable year; 06 (9) "nonresident trust" means a trust other than a resident trust or part- 07 year resident trust; 08 (10) "partner" means a partner as defined in 26 U.S.C. 7701(a) 09 (Internal Revenue Code) and includes a member of a limited liability company or 10 similar entity that is treated as a partnership for federal income tax purposes; 11 (11) "partnership" means an entity as defined in 26 U.S.C. 7701(a) 12 (Internal Revenue Code) and includes a limited liability company and a similar entity 13 treated as a partnership for federal income tax purposes; 14 (12) "part-year resident estate" means an estate that is a resident of the 15 state for a portion of but not the entire taxable year; 16 (13) "part-year resident individual" means an individual who is a 17 resident of the state for a portion of but not the entire taxable year; 18 (14) "part-year resident trust" means a trust that is a resident of the 19 state for a portion of but not the entire taxable year; 20 (15) "related person" means a person that satisfies the definition of 21 "related persons" in 26 U.S.C. 144 or 147 or a person in a relationship as described in 22 26 U.S.C. 267(b) (Internal Revenue Code); 23 (16) "resident estate" means the estate of a 24 (A) decedent who at the time of death was a resident of the 25 state, regardless of the residence of the fiduciary or beneficiary, if the 26 disposition or administration of the estate is subject to state law; or 27 (B) person who, at the time of commencement of a bankruptcy 28 proceeding under Title 11 of the United States Code, was a resident of the 29 state; 30 (17) "resident individual" means an individual who 31 (A) receives a permanent fund dividend under AS 43.23.005;
01 (B) receives a tax benefit available only to an individual 02 domiciled in the state; or 03 (C) is domiciled in the state for the entire taxable year unless 04 the individual maintains a permanent place of abode outside the state and 05 spends, in the aggregate, not more than 30 days during the taxable year in the 06 state; 07 (18) "resident trust" means a trust or a portion of a trust consisting of 08 property 09 (A) transferred by will of a decedent who at the time of death 10 was a resident of the state if the disposition or administration of the property is 11 subject to state law; or 12 (B) of a person who was a resident at the time the property was 13 transferred to the trust if, at the time of the transfer, the trust was 14 (i) an irrevocable trust; 15 (ii) a revocable trust and the trust has not become 16 irrevocable; or 17 (iii) a revocable trust and the trust later became 18 irrevocable at a time the person transferring property to the trust was a 19 resident; 20 (19) "revocable trust" means a trust or portion of a trust that is subject 21 to a power, exercisable immediately or at a future time, to revest title in a person 22 whose property constitutes the trust or portion of the trust; 23 (20) "S corporation" means a corporation that has elected to file a 24 federal income tax return under 26 U.S.C. 1361 - 1379 (Internal Revenue Code); 25 (21) "taxable income" means income taxable under this chapter; 26 (22) "taxable year" means the calendar year or a fiscal year ending 27 during the calendar year; 28 (23) "taxpayer" means a person subject to a tax imposed by this 29 chapter. 30 * Sec. 11. AS 43.23.025(a) is amended to read: 31 (a) By October 1 of each year, the commissioner shall determine the value of
01 each permanent fund dividend for that year by 02 (1) determining the total amount available for dividend payments, 03 which equals 04 (A) the amount of income of the Alaska permanent fund 05 appropriated [TRANSFERRED] to the dividend fund [UNDER 06 AS 37.13.145(b)] during the current year; 07 (B) plus the unexpended and unobligated balances of prior 08 fiscal year appropriations that lapse into the dividend fund under 09 AS 43.23.045(d); 10 (C) less the amount necessary to pay prior year dividends from 11 the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and 12 43.23.055(3) and (7); 13 (D) less the amount necessary to pay dividends from the 14 dividend fund due to eligible applicants who, as determined by the department, 15 filed for a previous year's dividend by the filing deadline but who were not 16 included in a previous year's dividend computation; 17 (E) less appropriations from the dividend fund during the 18 current year, including amounts to pay costs of administering the dividend 19 program and the hold harmless provisions of AS 43.23.240; 20 (2) determining the number of individuals eligible to receive a 21 dividend payment for the current year and the number of estates and successors 22 eligible to receive a dividend payment for the current year under AS 43.23.005(h); and 23 (3) dividing the amount determined under (1) of this subsection by the 24 amount determined under (2) of this subsection. 25 * Sec. 12. AS 43.23.028(a) is amended to read: 26 (a) By October 1 of each year, the commissioner shall give public notice of 27 the value of each permanent fund dividend for that year and notice of the information 28 required to be disclosed under (3) of this subsection. In addition, the stub attached to 29 each individual dividend disbursement advice must 30 (1) disclose the amount of each dividend attributable to legislative 31 appropriations [INCOME EARNED BY THE PERMANENT FUND FROM
01 DEPOSITS TO THAT FUND REQUIRED UNDER ART. IX, SEC. 15, 02 CONSTITUTION OF THE STATE OF ALASKA]; 03 (2) [DISCLOSE THE AMOUNT OF EACH DIVIDEND 04 ATTRIBUTABLE TO INCOME EARNED BY THE PERMANENT FUND FROM 05 APPROPRIATIONS TO THAT FUND AND FROM AMOUNTS ADDED TO 06 THAT FUND TO OFFSET THE EFFECTS OF INFLATION; 07 (3)] disclose the amount by which each dividend has been reduced due 08 to each appropriation from the dividend fund, including amounts to pay the costs of 09 administering the dividend program and the hold harmless provisions of 10 AS 43.23.240; 11 (3) [(4)] include a statement that an individual is not eligible for a 12 dividend when 13 (A) during the qualifying year, the individual was convicted of 14 a felony; 15 (B) during all or part of the qualifying year, the individual was 16 incarcerated as a result of the conviction of a 17 (i) felony; or 18 (ii) misdemeanor if the individual has been convicted of 19 a prior felony or two or more prior misdemeanors; 20 (4) [(5)] include a statement that the legislative purpose for making 21 individuals listed under (3) [(4)] of this subsection ineligible is to 22 (A) provide funds for services for and payments to crime 23 victims and operating costs of the Violent Crimes Compensation Board; 24 (B) provide funds to pay restitution owed to crime victims; 25 (C) provide funds for grants to nonprofit organizations for 26 services for crime victims and for mental health services and substance abuse 27 treatment for offenders; 28 (D) provide funds for the office of victims' rights; 29 (E) provide funds to the Council on Domestic Violence and 30 Sexual Assault for grants for the operation of domestic violence and sexual 31 assault programs; and
01 (F) obtain reimbursement for some of the costs imposed on the 02 Department of Corrections related to incarceration or probation of those 03 individuals; 04 (5) [(6)] disclose the total amount that would have been paid during the 05 previous fiscal year to individuals who were ineligible to receive dividends under 06 AS 43.23.005(d) if they had been eligible; 07 (6) [(7)] disclose the total amount transferred or appropriated for the 08 current fiscal year under AS 43.23.048 for each of the accounts, funds, and agencies 09 listed in AS 43.23.048. 10 * Sec. 13. AS 43.23.045 is amended by adding a new subsection to read: 11 (f) Each fiscal year, the legislature may appropriate to the dividend fund an 12 amount equal to 30 percent of all mineral lease rentals, royalties, royalty sale 13 proceeds, bonuses, net profit shares under AS 38.05.180(f) and (g), and federal 14 mineral revenue sharing payments received by the state during that fiscal year. 15 * Sec. 14. AS 43.23 is amended by adding a new section to read: 16 Sec. 43.23.092. Permanent fund dividend individual income tax payment. 17 In accordance with AS 43.22.090, the department shall prepare the Alaska permanent 18 fund dividend application to allow an applicant to direct the department to hold all or 19 part of the amount of the individual's permanent fund dividend for application against 20 the individual income tax imposed under AS 43.22. 21 * Sec. 15. AS 37.13.140(a), 37.13.145(d), 37.13.145(e), and 37.13.145(f) are repealed 22 July 1, 2021. 23 * Sec. 16. AS 43.05.085; AS 43.20.012(b), and 43.20.013 are repealed January 1, 2022. 24 * Sec. 17. Section 28, ch. 134, SLA 1992, is repealed. 25 * Sec. 18. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 APPLICABILITY. AS 43.22, added by sec. 10 of this Act, applies to income received 28 on or after the effective date of sec. 10 of this Act. 29 * Sec. 19. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 TRANSITION: REGULATIONS. The Department of Revenue may adopt regulations
01 necessary to implement this Act. The regulations take effect under AS 44.62 (Administrative 02 Procedure Act), but not before the effective date of the law implemented by the regulation. 03 * Sec. 20. Section 18 of this Act takes effect immediately under AS 01.10.070(c). 04 * Sec. 21. Section 4 of this Act takes effect on the effective date of sec. 2, ch. 16, SLA 05 2018. 06 * Sec. 22. Sections 1 - 8, 11 - 13, 15, and 17 of this Act take effect July 1, 2021. 07 * Sec. 23. Except as provided in secs. 20 - 22 of this Act, this Act takes effect January 1, 08 2022.