04/09/2025 09:00 AM Senate FINANCE

SENATE BILL NO. 113                                                                                                           
                                                                                                                                
     "An  Act  relating  to   the  Multistate  Tax  Compact;                                                                    
     relating  to  apportionment  of income  to  the  state;                                                                    
     relating to highly digitized  businesses subject to the                                                                    
     Alaska  Net  Income  Tax  Act;  and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:03:09 AM                                                                                                                    
                                                                                                                                
SENATOR   BILL   WIELECHOWSKI,   SPONSOR,   introduced   the                                                                    
legislation. He  summarized that  the bill  changed Alaska's                                                                    
corporate   tax   apportionment   system  to   tax   outside                                                                    
corporations   similarly   to  in-state   corporations.   He                                                                    
emphasized that the bill did  not raise taxes on any Alaskan                                                                    
corporations.                                                                                                                   
                                                                                                                                
Senator Kaufman remarked that the  bill was raising taxes on                                                                    
the  products people  procured in  Alaska. He  asked how  to                                                                    
know if the taxes would be  additive to the cost of products                                                                    
being purchased.                                                                                                                
                                                                                                                                
Senator Wielechowski  replied that the  apportionment system                                                                    
was  in  place for  at  least  36 other  states.  Historical                                                                    
experience  in  other  states  was that  there  was  not  an                                                                    
increase in taxes for consumers.  He relayed that the system                                                                    
dealt  generally  with  internet companies  and  noted  that                                                                    
generally the companies did not target states to tax them.                                                                      
                                                                                                                                
Senator  Kaufman remarked  that he  often felt  targeted and                                                                    
mentioned  companies that  did not  ship to  Alaska. He  was                                                                    
concerned about adding to the  problem. He expressed concern                                                                    
for taxation in general and  mentioned that the state didn't                                                                    
have a spending cap.                                                                                                            
                                                                                                                                
Senator  Wielechowski challenged  Senator  Kaufman to  close                                                                    
the   $677.1   million   deficit  without   taxing   outside                                                                    
corporations.                                                                                                                   
                                                                                                                                
Senator  Kaufman  did    not   agree  with  embracing  every                                                                    
spending  plan that  came through  the legislature  and felt                                                                    
that there needed to be moderation on both sides.                                                                               
                                                                                                                                
Senator Kiehl  MOVED to  REPORT SB  113 from  committee with                                                                    
individual recommendations  and attached fiscal  note. There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
SB 113  was REPORTED out  of committee with three  "do pass"                                                                    
recommendations, two "do not  pass" recommendations, two "no                                                                    
recommendation"  recommendations, and  with  one new  fiscal                                                                    
note from the Department of Revenue.                                                                                            
                                                                                                                                
9:07:28 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:09:21 AM                                                                                                                    
RECONVENED