2016-05-27                     House Journal                      Page 2987
HB 4004                                                                                                                       
HOUSE BILL NO. 4004 by the House Rules Committee by request of                                                                  
the Governor, entitled:                                                                                                         
                                                                                                                                
     "An Act establishing an individual income 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 May 26, 2016, follows:                                                                  
                                                                                                                                
"Dear Speaker Chenault:                                                                                                         
                                                                                                                                
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill to establish and individual                                                              
income tax.                                                                                                                     
                                                                                                                                

2016-05-27                     House Journal                      Page 2988
This is a necessary measure to address our fiscal situation.  The bill                                                          
would establish a personal income tax of six percent of total federal                                                           
tax liability. I have chosen a structure similar to our State's prior                                                           
income tax, which was repealed in 1980. The bill would tax income                                                               
earned by residents and nonresident individuals with income from a                                                              
source in this state. Because the tax that would be established by the                                                          
bill is calculated based on federal tax liability and not on income, the                                                        
bill effectively incorporates federal brackets and exemptions and so                                                            
permits this bill, and the Alaska personal income tax system it would                                                           
create, to be as simple and transparent as possible and minimizes                                                               
administrative burdens both for the State and for taxpayers. The bill                                                           
would apply to income earned on or after January 1, 2018. In addition,                                                          
the bill would repeal a set of orphaned individual tax credits from the                                                         
former income tax.                                                                                                              
                                                                                                                                
The citizens of our state are ready to pitch in to solve our fiscal crisis.                                                     
My measure is part of that solution. Together we can continue to                                                                
assure Alaska's strong and stable financial future.                                                                             
                                                                                                                                
I appreciate your consideration of this issue, and urge your prompt and                                                         
favorable action on this measure.                                                                                               
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Bill Walker                                                                                                                     
Governor"