Legislature(2005 - 2006)
2005-03-29 House JournalFull Journal pdf
2005-03-29 House Journal Page 0761 HB 235 HOUSE BILL NO. 235 by the House Rules Committee by request of the Governor, entitled: "An Act excepting from the Alaska Net Income Tax Act the federal deduction regarding income attributable to certain domestic production activities; and providing for an effective date." was read the first time and referred to the House Special Committee on Ways & Means and the Finance Committee. The following fiscal note(s) apply: 1. Indeterminate, Dept. of Revenue 2005-03-29 House Journal Page 0762 The Governor's transmittal letter dated March 22, 2005, follows: "Dear Speaker Harris: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill excepting from the Alaska Net Income Tax Act the federal deduction regarding income attributable to certain domestic production activities. Last year Congress passed legislation (American Jobs Creation Act of 2004) that created a new federal tax deduction for corporations regarding income attributable to certain domestic production activities. Alaska tax law automatically adopts such federal tax deductions unless the Legislature explicitly excepts to them (AS 43.20.021(a)). Because of Alaska's unique reliance on natural resource development, this particular deduction will have major impacts on the state's revenue flow. The Department of Revenue estimates that this federal tax deduction could cut $100 million from state corporate income tax revenue over the next decade. With the passage of this legislation, Alaska's corporate income tax structure will stay the same as it is under the current regime. This will provide continued stability and tax certainty to corporations operating in the State of Alaska. Several other states also have introduced legislation to "de-couple" their tax code from this new federal provision, including Montana, New Jersey, Maryland, North Dakota and West Virginia. Massachusetts has enacted such legislation. I urge your prompt and favorable action on this measure. Sincerely yours, /s/ Frank H. Murkowski Governor"