00 SENATE BILL NO. 3002 01 "An Act establishing an income tax on certain entities in the state; relating to the motor 02 fuel tax; relating to nontransferable tax credits against the oil and gas production tax; 03 and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05  * Section 1. AS 43.20 is amended by adding a new section to read: 06 Sec. 43.20.019. Tax on income attributable to an entity. (a) If an entity has 07 taxable income over $4,000,000 in a tax year, the entity shall pay a tax of 9.4 percent 08 on the qualified taxable income over $4,000,000. 09 (b) The tax under this section does not apply to a corporation paying tax under 10 AS 43.20.011. 11 (c) The department may aggregate the qualified taxable income of two or 12 more entities for the purpose of determining the tax due under this section if the 13 department determines that, without the provisions of this section, the qualified 14 taxable income would reasonably be expected to be attributed to a single entity. 01 (d) In this section, "entity" means a sole proprietorship, partnership, or entity 02 that has elected to file federal returns under 26 U.S.C. 1361 - 1379 (Internal Revenue 03 Code). 04  * Sec. 2. AS 43.40.005(a) is amended to read: 05 (a) Every dealer or user of refined fuels shall pay a surcharge of $.015 06 [$.0095] a gallon on refined fuel sold, transferred, or used in the state. 07  * Sec. 3. AS 43.40.010(a) is amended to read: 08 (a) In addition to the surcharge levied under AS 43.40.005, there is levied a 09 tax of 16 [EIGHT] cents a gallon on all motor fuel sold or otherwise transferred within 10 the state, except that 11 (1) the tax on aviation gasoline is four and seven-tenths cents a gallon; 12 (2) the tax on motor fuel used in and on watercraft of all descriptions is 13 10 [FIVE] cents a gallon; 14 (3) the tax on all aviation fuel other than gasoline is three and two- 15 tenths cents a gallon; and 16 (4) the tax rate on motor fuel that is blended with alcohol is the same 17 tax rate a gallon as other motor fuel; however, in an area and during the months in 18 which fuel containing alcohol is required to be sold, transferred, or used in an effort to 19 attain air quality standards for carbon monoxide as required by federal or state law or 20 regulation, the tax rate on motor fuel that is blended with alcohol is six cents a gallon 21 less than the tax on other motor fuel not described in (1) - (3) of this subsection. 22  * Sec. 4. AS 43.40.010(b) is amended to read: 23 (b) In addition to the surcharge levied under AS 43.40.005, there is levied a 24 tax of 16 [EIGHT] cents a gallon on all motor fuel consumed by a user, except that 25 (1) the tax on aviation gasoline consumed is four and seven-tenths 26 cents a gallon; 27 (2) the tax on motor fuel used in and on watercraft of all descriptions is 28 10 [FIVE] cents a gallon; 29 (3) the tax on all aviation fuel other than gasoline is three and two- 30 tenths cents a gallon; and 31 (4) the tax rate on motor fuel that is blended with alcohol is the same 01 tax rate a gallon as other motor fuel; however, in an area and during the months in 02 which fuel containing alcohol is required to be sold, transferred, or used in an effort to 03 attain air quality standards for carbon monoxide as required by federal or state law or 04 regulation, the tax rate on motor fuel that is blended with alcohol is six cents a gallon 05 less than the tax on other motor fuel not described in (1) - (3) of this subsection. 06  * Sec. 5. AS 43.40.030(a) is amended to read: 07 (a) Except as specified in AS 43.40.010(j), a person who uses motor fuel to 08 operate 09 (1) an internal combustion engine is entitled to a motor fuel tax refund 10 of 12 [SIX] cents a gallon if 11 (A) [(1)] the tax on the motor fuel has been paid; 12 (B) [(2)] the motor fuel is not aviation fuel, or motor fuel used 13 in or on watercraft; and 14 (C) [(3)] the internal combustion engine is not used in or in 15 conjunction with a motor vehicle licensed to be operated on public ways; or  16 (2) a watercraft licensed under AS 16.05.490 or 16.05.530 and used  17 for commercial fishing is entitled to a motor fuel tax refund of five cents a gallon  18 if the tax on the motor fuel has been paid. 19  * Sec. 6. AS 43.55.024(j) is amended to read: 20 (j) A producer may apply against the producer's tax liability for the calendar 21 year under AS 43.55.011(e) a tax credit in the amount specified in this subsection for 22 each barrel of oil taxable under AS 43.55.011(e) that does not receive a reduction in 23 the gross value at the point of production under AS 43.55.160(f) or (g) and that is 24 produced during a calendar year after December 31, 2013, from leases or properties 25 north of 68 degrees North latitude. A tax credit under this subsection may not reduce a 26 producer's tax liability for a calendar year under AS 43.55.011(e) below the amount 27 calculated under AS 43.55.011(f). The amount of the tax credit for a barrel of taxable 28 oil subject to this subsection produced during a month of the calendar year is 29 (1) [$8 FOR EACH BARREL OF TAXABLE OIL IF THE 30 AVERAGE GROSS VALUE AT THE POINT OF PRODUCTION FOR THE 31 MONTH IS LESS THAN $80 A BARREL; 01 (2) $7 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE 02 GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS 03 GREATER THAN OR EQUAL TO $80 A BARREL, BUT LESS THAN $90 A 04 BARREL; 05 (3) $6 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE 06 GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS 07 GREATER THAN OR EQUAL TO $90 A BARREL, BUT LESS THAN $100 A 08 BARREL; 09 (4)] $5 for each barrel of taxable oil if the average gross value at the 10 point of production for the month is [GREATER THAN OR EQUAL TO $100 A 11 BARREL, BUT] less than $110 a barrel; 12 (2) [(5)] $4 for each barrel of taxable oil if the average gross value at 13 the point of production for the month is greater than or equal to $110 a barrel, but less 14 than $120 a barrel; 15 (3) [(6)] $3 for each barrel of taxable oil if the average gross value at 16 the point of production for the month is greater than or equal to $120 a barrel, but less 17 than $130 a barrel; 18 (4) [(7)] $2 for each barrel of taxable oil if the average gross value at 19 the point of production for the month is greater than or equal to $130 a barrel, but less 20 than $140 a barrel; 21 (5) [(8)] $1 for each barrel of taxable oil if the average gross value at 22 the point of production for the month is greater than or equal to $140 a barrel, but less 23 than $150 a barrel; 24 (6) [(9)] zero if the average gross value at the point of production for 25 the month is greater than or equal to $150 a barrel. 26  * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 APPLICABILITY. Section 1 of this Act applies to an entity with qualified taxable 29 income over $4,000,000 for a tax year beginning on or after January 1, 2022. 30  * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 31 read: 01 TRANSITION: REGULATIONS. The Department of Revenue may adopt regulations 02 necessary to implement the changes made by this Act. The regulations take effect under 03 AS 44.62 (Administrative Procedure Act), but not before January 1, 2022.  04  * Sec. 9. Section 8 of this Act takes effect immediately under AS 01.10.070(c). 05  * Sec. 10. Except as provided in sec. 9 of this Act, this Act takes effect January 1, 2022.