Legislature(2011 - 2012)HOUSE FINANCE 519
03/13/2012 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB252 | |
| HB9 | |
| HB289 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 9 | TELECONFERENCED | |
| + | HB 289 | TELECONFERENCED | |
| += | HB 170 | TELECONFERENCED | |
| += | HB 252 | TELECONFERENCED | |
| += | HCR 24 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 252
"An Act exempting certain small businesses from the
corporate income tax; and providing for an effective
date."
8:34:51 AM
REPRESENTATIVE MIA COSTELLO, SPONSOR, introduced the
legislation.
Representative Gara expressed concern that small businesses
could retain the exemption after making large amounts of
money. He proposed that only the first $10 million remain
tax free on profits, and he queried the duration of the
tax-free status.
Representative Costello replied that the tax would be
applicable until a business reached $50 million in gross
aggregate assets.
Representative Gara wondered whether a tax break, but not a
full tax break should be offered as business became more
successful. He wondered about limiting the full tax break
to the first $10 million tax in profits.
JOSH WALTON, STAFF, REPRESENTATIVE MIA COSTELLO, responded
that the $50 million cap was written into the federal code.
He noted that other requirements were written into the code
as well, such as how the assets would be used in expansion
into other businesses or areas not included in the federal
definition. He stated that the change was not out of the
question; however, the legislation was intended to make
Alaska as competitive as possible for small businesses. He
thought that the idea could be revisited in the future once
the effect of the bill could be gauged.
Representative Wilson asked if the intention was to remain
consistent with the federal government.
Representative Costello responded in the affirmative.
8:39:22 AM
Representative Doogan pointed to page 2, line 10. He
requested an explanation for the words "authorized to do
business in the state." He wondered how the language was
distinct from "incorporated in the state."
Mr. Walton responded that there was not much of a
distinction. He elaborated that originally the term "Alaska
Corporation," had been defined explicitly because of the
requirement that the businesses be headquartered in the
state, but that The Department of Law had believed that
that would be a violation on inter-state commerce. The
Alaska Corporation was then defined as a corporation that
was authorized to do business within the state.
Representative Doogan surmised that the language indicated
Alaska Airlines or other companies that were not
headquartered here, but that did business in the state
Mr. Walton replied that that was generally correct. He
noted that Alaska Airlines was a transportation company and
would not qualify for the tax breaks discussed in the
legislation.
Representative Neuman referred to the sponsor statement. He
read that the types of businesses that would be affected
were highly mobile and had many options regarding where
they could locate their business. Such companies
consequently tended to locate elsewhere, even when founded
by Alaskan's. He asked if the bill contained sideboards
that stipulated that if the companies were going to receive
credits from the state that they must also be located in
the state.
8:42:16 AM
Mr. Walton explained that the bill provided an exemption
from state corporate income tax and only incurred corporate
income tax liabilities for the activities carried out in
the state. Out-of-state activities would be subject under
the laws of the respective states.
Representative Neuman understood that in order to receive
the credits the work had to be done in Alaska.
Mr. Walton responded in the affirmative.
Vice-chair Fairclough discussed the new fiscal note from
the Department of Revenue.
Co-Chair Stoltze solicited amendments.
Representative Doogan wondered whether fiscal note number 1
was still applicable.
Co-Chair Stoltze replied that fiscal note 1 had been
attached to a previous version of the bill.
Co-Chair Thomas MOVED to report CS HB 252(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 252(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a new indeterminate fiscal
note from the Department of Revenue.
8:45:26 AM
AT EASE
8:47:19 AM
RECONVENED