Legislature(2017 - 2018)
2017-10-23 House Journal
Full Journal pdf2017-10-23 House Journal Page 1801 HB 4001 HOUSE BILL NO. 4001 by the House Rules Committee by request of the Governor, entitled: 2017-10-23 House Journal Page 1802 "An Act imposing a tax on wages and net earnings from self- employment; relating to the administration and enforcement of the wages and net earnings from self-employment tax; and providing for an effective date." was read the first time and referred to the Finance Committee. The following fiscal note(s) apply: 1. Fiscal, Dept. of Revenue The Governor's transmittal letter dated September 22 follows: "Dear Speaker Edgmon: Under the authority of art. III, sec. 18, Constitution of the State of Alaska, I am transmitting a bill relating to taxation of wages and earnings in the state. The billwould impose a tax on wages and net self-employment income earned in Alaska by resident and nonresident individuals. The tax rate would be 1.5 percent annually, and would be capped at the greater of $2,200 (adjusted for inflation) or two times the amount of the permanent fund dividend distributed in the previous calendar year. The tax would take effect in calendar year 2019 and is expected to raise $300-325 million by FY2020. Under this bill, employers would be required to pay to the Department of Revenue withholdings that approximate the amount of the tax. Through regulation, the withholding would stop when the statutory cap is reached. This protects individuals working multiple jobs and insulates vulnerable populations, such as single parents, by limiting each Alaskan's tax burden, and keeps us the lowest-taxed state in the nation. This tax is a simple and efficient measure to address our state's budget shortfall. Over the past six years, state budgets have been reduced by 44 percent, but state revenues have fallen faster. To cover the gap, key state savings accounts have been drawn down by $14 billion, and are expected to be depleted by the end of FY 2019. It is vital that these 2017-10-23 House Journal Page 1803 savings accounts not go any lower and in accordance with the constitution must be replenished over time. New revenues are needed to support critical public services such as education, public safety, and reliable transportation. We need a fiscal plan that includes prudent operating and capital budgets, the judicious use of investment earnings, and revenues necessary to balance the budget. This tax will get us closer to balancing the state's budget and enable Alaska's economy to grow. Sincerely, /s/ Bill Walker Governor"