05/09/2023 01:30 PM Senate FINANCE

SENATE BILL NO. 122                                                                                                           
                                                                                                                                
     "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."                                                                                                           
                                                                                                                                
2:52:25 PM                                                                                                                    
                                                                                                                                
Senator Kiehl MOVED to ADOPT the committee substitute for                                                                       
SB 122, Work Draft 33-LS0663\Y (Nauman, 5/5/23).                                                                                
                                                                                                                                
Co-Chair Olson OBJECTED for discussion.                                                                                         
                                                                                                                                
2:52:57 PM                                                                                                                    
                                                                                                                                
KEN ALPER, STAFF, SENATOR DONNY OLSON, discussed the                                                                            
Summary of Changes (copy on file):                                                                                              
                                                                                                                                
     1) Amends  Sec. 11(e),  page 25 lines  9-12, clarifying                                                                    
     that  public  utilities   and  utilities  that  provide                                                                    
     telecommunications  services  would   not  be  included                                                                    
     within the new "single factor allocation" method.                                                                          
                                                                                                                                
2:54:01 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:54:54 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr. Alper continued to discuss the Summary of Changes:                                                                          
                                                                                                                                
      2)  Amends Sec.  12,  page 26  lines  1-5, adding  new                                                                    
     subsections to clarify that an  "entity" paying the 9.4                                                                    
     percent  on  their  allocated  Alaska  income  over  $4                                                                    
     million would  also include an  LLC or any  entity that                                                                    
     filed   for   federal   tax    purposes   as   a   sole                                                                    
    proprietorship, partnership, S-corporation, or LLC.                                                                         
                                                                                                                                
2:56:56 PM                                                                                                                    
                                                                                                                                
Co-Chair   Olson  wondered   whether  the   Rules  Committee                                                                    
chairman was in favor of the committee substitute.                                                                              
                                                                                                                                
Mr. Alper replied in the affirmative.                                                                                           
                                                                                                                                
Senator Bishop  wondered whether  the Department  of Revenue                                                                    
(DOR)  would be  available for  questions at  the next  bill                                                                    
hearing.                                                                                                                        
                                                                                                                                
Mr. Alper replied in the affirmative.                                                                                           
                                                                                                                                
Co-Chair  Olson  WITHDREW  his  OBJECTION.  There  being  NO                                                                    
further OJECTION, it was so ordered.                                                                                            
                                                                                                                                
SB  122  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.