Legislature(2021 - 2022)BUTROVICH 205
09/09/2021 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB3002 | |
| Presentation: Tax Overview: Motor Fuels, Corporate Income, and Per Barrel Credits | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB3002 | TELECONFERENCED | |
SB 3002-TAX: MOTOR FUEL, CORP. INCOME, O&G
3:39:46 PM
CHAIR JOSH REVAK announced the consideration of SENATE BILL NO.
3002 "An Act establishing an income tax on certain entities in
the state; relating to the motor fuel tax; relating to
nontransferable tax credits against the oil and gas production
tax; and providing for an effective date."
3:41:02 PM
SENATOR TOM BEGICH, Alaska State Legislature, Juneau, Alaska,
stated that SB 3002 seeks to establish an income tax on certain
entities relating to a motor fuels tax and a nontransferable tax
credit against the oil and gas production tax. He stated that
the Fiscal Plan Working Group of 2021 was historic because two
members from the House Majority, House Minority, Senate
Majority, and Senate Minority worked together to create a
bipartisan revenue plan. The plan received widespread support
from the public, administration, and legislators.
SB 3002 addressed a portion of the working group's revenue plan
by increasing revenue from three sources. He expressed a desire
for SB 3002 to move to the next committee of referral since the
Senate previously heard or passed the proposals in the bill.
3:44:30 PM
Using the estimates assumed by the working group, SB 3002 would
increase revenue by $195 million; $110 million would come from
the change to the per barrel tax credit structure, $18 million
from the motor fuel tax adjustment, and $67 million from the
expansion of corporate income tax structure to capture excluded
entities.
3:45:06 PM
SENATOR BEGICH opined there is a need for a revenue bill to
advance to the finance committee for exploration.
He said the oil and gas industry will object to SB 3002 claiming
lack of competition and that additional taxation will be
harmful. Yet, Alaskan citizens have contributed $2 billion a
year of expected permanent fund dividend income over the past
five years.
SENATOR STEVENS asked how much revenue would come from taxing S
corporations.
SENATOR BEGICH answered $67 million in the first year.
3:47:21 PM
MERCEDES COLBERT, Staff, Senator Tom Begich, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 3002 on behalf of the sponsor:
Section 1: Adds a new section to the Alaska Net Income
Tax Act. This section establishes a new tax of 9.4
percent for certain corporations earning at least $4
million on qualified net taxable income. This tax
applies to sole proprietorships, partnerships, or
federally defined S and C corporations, not publicly
traded.
SENATOR BEGICH interjected that a company with net income of
$4.1 million would pay 9.4 percent tax on the amount above $4
million, which would be $100,000.
SENATOR REVAK asked how the $4 million threshold was determined.
SENATOR BEGICH responded that the $4 million cut-off came from
proposed legislation from Senator Wielechowski.
MS. COLBERT added that the legislation set the $4 million amount
with a specific entity in mind.
SENATOR VON IMHOF questioned why the percentage rate jumped from
0 to 9.4 percent.
3:49:58 PM
SENATOR BEGICH responded that 9.4 percent mirrors existing
legislation for corporate income tax, which stair-steps up to
9.4 percent for companies earning over $220,000 in net profits.
The threshold is set at $4 million for S corporations to avoid
hurting mom-and-pop businesses. Some corporations chose to be S
corporations and avoid Alaska's state corporate tax.
SENATOR BEGICH stated that British Petroleum divested itself of
assets in Alaska to an S corporation. Previous legislation tried
to recapture the lost $40 million in corporate income tax
revenue and remedy the loophole.
SB 3002 would begin taxing S corporations only on net profits
exceeding $4 million.
3:52:19 PM
SENATOR STEVENS asked if individuals who own S corporations pay
income tax instead of corporate state tax and what the rate is.
SENATOR BEGICH replied that owners of S corporations pay income
tax if the state has an income tax. An S corporation owner does
not pay individual state income tax in Alaska.
SENATOR STEVENS commented that the $40 million in lost revenue
is truly a loss.
SENATOR BEGICH replied, correct.
3:53:47 PM
SENATOR VON IMHOF expressed concern that a particular company is
being targeted for taxable revenue. She asked for the definition
of the term "qualified taxable income in Section 1(c).
SENATOR BEGICH responded that Emily Nauman would answer the
question. He commented that the loss of $40 million highlighted
a flaw in Alaska's revenue system. When drafting SB 3002 with
Legislative Legal Services (Leg Legal), the goal was to close
the loophole without destroying mom-and-pop businesses; that
threshold was $4 million. He opined that upstanding corporate
companies willingly contribute to the state's corporate
infrastructure.
3:55:48 PM
SENATOR REVAK requested that questions for [Leg Legal] be held
until after the presentation. He asked the sponsor to confirm
that the tax applies to S corporations, LLCs, partnerships, and
other entities making over $4 million in net income.
SENATOR BEGICH replied, correct. It also includes sole
proprietors.
3:56:34 PM
MS. COLBERT resumed reading the sectional analysis
Section 2: Increases the surcharge from $0.0095 per
gallon to $0.015 per gallon on refined fuel sold,
transferred, or used in Alaska.
Section 3: Increases the tax on motor fuel sold or
transferred within the state from $0.08 to $0.16 per
gallon. This section also increases motor fuel sold
and transferred for the use in and on watercraft from
$0.05 cents to $0.10 per gallon.
Section 4: Increases the tax on motor fuel consumed
from $0.08 to $0.16 per gallon. This section also
increases the tax on motor fuel consumed for the use
in and on watercraft from $0.05 cents to $0.10 per
gallon.
Section 5: Amends AS 43.40.030(a), relating to the
refund of the motor fuel tax for non-highway use, by
increasing the fuel tax refund from $0.06 to $0.12 per
gallon for internal combustion engines. Adds a $0.05
per gallon refund eligibility for commercial fishing
watercraft.
3:58:04 PM
SENATOR MICCICHE stated that with the increased use of
electric vehicles (EV) nationwide, there has been an
increase in tax legislation aimed at capturing revenue from
EV use to pay for highway maintenance. He asked if that was
considered in SB 3002.
SENATOR BEGICH answered that tax on EVs was considered in
the original motor fuels bill. It is not included in SB
3002 because Leg Legal advised it might lead to a single
subject rule violation. He said he is willing to support
standalone legislation on an EV tax but does not want to
risk the integrity of SB 3002 by including it.
SENATOR REVAK asked why there is an exemption for
commercial fishing vessels and how much it would be.
4:00:13 PM
SENATOR BEGICH stated that Leg Legal might be able to
provide the amount of the exemption. He said commercial
fishing vessels were exempted because they were exempted in
the bill from which it was drafted. The motor fuels tax
portion of SB 3002 is taken from the final House version of
Senate Bill 115.
4:00:58 PM
MS. COLBERT continued reading the sectional analysis:
Section 6: Amends AS 43.55.024(j), relating to
nontransferable oil production tax credits. This
section repeals the $8, $7, and $6 per barrel tax
credits, effectively capping the per barrel tax credit
at $5 per barrel if the average gross value at the
point of production for the month is less than $110
per barrel.
Section 7: Applies the new corporate income tax
established in section 1 of this bill to the tax year
beginning on or after January 1, 2022. 32-LS1152/B|
9.9.2021 | 2
Section 8: Transition language for the Department of
Revenue to adopt regulations necessary to implement
this bill if passed into law. Regulations may not take
effect before January 1, 2022.
Section 9: Immediate effective date for the Department
of Revenue to begin work on regulations as authorized
under Section 8.
Section 10: Except for Section 9, this bill takes
effect January 1, 2022
4:02:06 PM
SENATOR BEGICH added that his hope is that the finance committee
makes passage of SB 3002 contingent upon legislation relating to
a change in the dividend statute.
CHAIR REVAK asked if the purpose of SB 3002 is to increase the
permanent fund dividend.
SENATOR BEGICH replied that the purpose of SB 3002 is to ensure
the state has an acceptable comprehensive fiscal plan. The
fiscal plan working group identified that a plan must include a
constitutional percent of market value, finality to the dividend
question, revenue for a balanced budget, and spending review. SB
3002 addresses two elements suggested by the working group.
Legislators must be willing to make painful changes if they are
serious about establishing a state fiscal plan.
4:04:03 PM
SENATOR MICCICHE asked if the surcharge increase from $0.95 per
gallon to $1.05 in Section 2 was calculated to capture the Spill
Prevention and Response (SPAR) funding gap and if the Department
of Environmental Conservation (DEC)supports it.
SENATOR BEGICH answered that it does meet the amount discussed
in the DEC subcommittee meeting. He does not know DEC's position
but his belief is that the department was in support of the
increase.
SENATOR KIEHL commented that it seems counterintuitive that
Section 6 proposes deleting the per barrel tax credit at lower
net oil prices but keeps them at higher net oil prices. He asked
why this approach was taken and if he would be receptive to the
existing approach.
SENATOR BEGICH stated he is amenable to change and explained
that the approach in SB 3002 was selected because it seemed less
damaging to the oil industry. Garnering less opposition from the
oil industry is favorable to the state. The proposal was an
attempt to compromise. He stated his preference for a property
tax on oil company land use because it would net more revenue
and be stable. However, the idea of a property tax met
opposition from the oil industry. He stated his desire for the
legislature to find the least painful means to compromise.
SENATOR VON IMHOF asked what evaluation was done to determine
that the oil tax credit proposal in SB 3002 would be less
damaging to the oil industry, aside from comparing it to Senator
Wielechowski's bill, which eliminates all tax credits.
4:07:33 PM
SENATOR BEGICH replied that Senator Wielechowski's bill was the
comparison. It is more damaging to the oil industry to provide
zero tax credits than some tax credits.
The goal of SB 3002 is to initiate solutions to state revenue
needs. Any bill that adds an industrial tax burden will be
viewed unfavorably by the industry. Likewise, a reduction in the
dividend check will damage the individual. The comprehensive
fiscal plan was designed in the spirit of compromise to get the
legislature discussing revenue.
When discussing an overall fiscal plan, there must be a revenue
element, or it is not a fiscal plan. If legislators are serious
about doing a comprehensive plan, it must have revenue. SB 3002
was designed to get members into a discussion on revenue. He
said he is hopeful members will move SB 3002 to the finance
committee for further analysis.
4:09:25 PM
SENATOR VON IMHOF surmised that SB 3002 was not economically
evaluated to determine its potential effect on Alaska's
investment in the North Slope, which is the largest employer in
the state and provides competitive jobs.
She opined that revenue would not be addressed until the
permanent dividend issue was solved. The state needs to know how
revenue will be spent in order to have a comprehensive fiscal
plan. Large dividends should not be paid at the exclusion of
Alaska's needs.
4:10:51 PM
SENATOR BEGICH responded that passing SB 3002 is contingent upon
the dividend statute being changed. All measures need to be
considered simultaneously. He opined that an overall fiscal plan
could not be achieved if revenue discussions on industry
continue to be delayed.
He agreed that the oil industry is critically important to the
state; however, the fishing industry is the largest employer.
The next largest is the State of Alaska, followed by local
government. The largest single private employer may be the oil
industry regarding salaries earned. Yet, many employees do not
live in Alaska, which results in uncaptured revenue. A state
income tax would not necessarily capture this revenue if passed.
He reiterated that SB 3002 is trying to balance resources and
interests for individuals and industries. It is an all-inclusive
bill where everyone pays something.
He stated that the issues of revenue and dividend change had
been discussed and debated. There will be no definitive answer
if the legislature does not address them simultaneously. He
recognized that members want to defend their interests. Still,
he implored them to consider revenue alongside dividend change
to achieve a comprehensive fiscal plan for the benefit of the
state.
4:13:35 PM
CHAIR REVAK commented that the $4 million threshold is not
difficult to achieve for many businesses. He asked if industries
or businesses other than fishing were considered for exemption.
4:14:21 PM
SENATOR BEGICH replied that members could adjust the $4 million
threshold, although constituents expressed concern about taxes
affecting small businesses. He reiterated that the tax is on net
income above $4 million, not gross income.
He stated the portion of SB 3002 dealing with a motor fuel tax
is the same language used in a bill that passed the Senate and
stood a good chance of passing the House but for the
interruption caused by COVID.
SENATOR BEGICH called SB 3002 a plagiarist's bill since it is
comprised of previously heard bills that had broad consensus.
4:16:55 PM
MS. COLBERT began the presentation on slide 3 that shows the
legislative history on corporate tax. She noted that many of the
concepts have been discussed in the last four or five years.
Some bills applied only to S or C corporations, others applied
to both, and some applied only to oil and gas companies. Since
2017, five bills have been introduced regarding the S and C
corporate income tax loophole. None of the recent bills that are
listed have received hearings.
She displayed slide 4 of the more recent history of motor fuel
taxes. SB 3002 reflects a bill currently in House finance. She
noted that Senate Bill 115 was the only motor fuel tax bill
st
heard during the 31 Legislature. It passed the Senate and came
close to passing in the House but was a casualty of COVID-19.
th
During the 30 Legislature, two bills were heard but did not
st
make it to the floor. They were introduced during the 1 Special
th
Session but were not heard. In the 29 Legislature in 2015 and
2016, several bills were heard; House Bill 4001 and Senate Bill
th
4001 were omnibus tax bills introduced in the 4 Special Session
that included taxes on a number of industries. She related that
the purpose for listing these bills is to show that taxes have
been discussed on the record.
4:19:42 PM
MS. COLBERT turned to slide 5 that lays out the recent
legislative history of the per barrel oil production tax
credits. She stated that a bill aimed at the per barrel oil tax
nd
heard. This morning, the House Ways and Means Committee held its
first hearing on a bill similar to SB 3002. Senate Bill 129 was
st
introduced in the 31 Legislature but not heard. Changes were
th
passed into law in the 30 Legislature, but per barrel credits
were unchanged. A subsequent bill considered changes to per
barrel tax credits but did not pass out of House finance. During
th
the 29 Legislature, House Bill 247 considered changes to the
per barrel tax credit. Although it passed, the changes were not
made. House Bill 326 was referred to House Resources and House
Finance but received no hearing. She added that this provides an
overview, not a comprehensive bill history.
4:21:13 PM
MS. COLBERT reiterated that SB 3002 uses language from bills
introduced in the recent past. It would impose a 9.4 percent net
income tax to sole proprietorships, partnerships, S
corporations, and C corporations that make at least $4 million
in profits.
MS. COLBERT said that the State of Alaska has not changed motor
fuel taxes since 1970. She read slide 7:
• When enacted in 1970, $0.08 tax on motor fuel would
be worth $0.54 today.
• The average cost of a gallon of gas in the US was
$0.36 per gallon in 1970. As of 2021, it is $2.94
per gallon.
• Alaska's fuel tax has lost 85 percent of its
purchasing power to help pay for highway, ferry, and
harbor maintenance.
MS. COLBERT stated that slide 8 provides a brief history of the
motor fuels tax. In 1945 Alaska levied its first motor fuel tax
at $0.01 per gallon. In 1970 it established the current rate of
$0.08. In 1977 the marine fuel tax was increased to its present
value of $0.05 per gallon. In 1994 the aviation tax was changed
to $0.047 per gallon, which SB 3002 does not change. In 2015 a
surcharge for the oil spill prevention and response (SPAR) fund
was established.
4:23:16 PM
MS. COLBERT moved to slide 9 that compares Alaska's motor fuels
tax to other states and read:
• Alaska ranks 50th in the nation for highway and
marine fuel tax rates.
• Passage of this bill would move Alaska up to 43rd in
the nation for highway fuel taxes and remain at 50th
for marine fuel taxes.
• The national average for State motor fuel taxes is
nearly 26 cents per gallon.
• This bill does not impact aviation fuel. Alaska
remains competitive among the lowest in the nation
for aviation and jet fuel tax rates.
MS. COLBERT said an outcry occurred when a tax on jet fuel was
considered because Anchorage was the fourth or fifth busiest
cargo airport. The aviation fuel tax was not considered in SB
3002 to keep Alaska competitive.
4:24:04 PM
MS. COLBERT stated that estimates indicate that Highway fuel
revenue would be $29.7 million to $31.4. It would be used to
maintain roads and is an account that receives matching federal
dollars. Marine fuel would go to the watercraft fuel tax account
that is used for water and harbor facilities maintenance, which
would be about $5.5 million per year. The refined fuel surcharge
goes to the SPAR fund and is about $3.5 million a year. As
currently drafted, the total annual increase would be upwards of
$40 million a year.
SENATOR BEGICH interjected that total annual revenue would
increase from $38.5 million to $40.7 million.
MS. COLBERT said the legislature has discussed AS 43.55.024(j)
at length over the past decade. It establishes nontransferable
oil production tax credits. SB 3002 would remove the credit caps
of $8, $7, and $6 listed in AS 43.55.024(j) (1-4). The
established new credit cap will be at $5 per barrel if the
average gross value at the point of production (GVPP) for the
month is less than $110 per barrel.
4:26:10 PM
MS. COLBERT turned to slide 12 and said the oil tax credit,
motor fuels tax, and expanded corporate income tax are estimated
to bring in $195 million by fiscal year 2022. That amount is
predicted to increase to over $500 million per year by fiscal
year 2030. These amounts were determined by the fiscal plan
working group who extrapolated figures from the fiscal notes of
previous bills.
4:26:47 PM
SENATOR BEGICH asked if there were any questions about the
presentation.
SENATOR STEVENS asked what happened to the lost revenue
following the passage of Senate Bill 21 in 2013.
MS. COLBERT replied that the Department of Revenue (DOR) would
address that question.
CHAIR REVAK requested Leg Legal address questions from the
meeting.
4:27:50 PM
EMILY NAUMAN, Attorney, Legislative Legal Services, Legislative
Affairs Agency, Alaska State Legislature, Juneau, Alaska, stated
her understanding that in Section 1 subsection(c) was designed
to avoid gaming subsection (a) that puts a tax on entities
having taxable income of $4 million. That subsection was
designed to give the Department of Revenue the authority to
combine the income of entities that appear to be splitting into
smaller units to avoid reaching the $4 million cap.
MS. NAUMAN stated that a low to moderate single subject risk was
the reason for not including an electric vehicle (EV) fee in SB
3002. If included, the bill adjoins taxes and fees. In general,
fees go to the department they originated from, while taxes are
broadly collected and serve the general fund. SB 3002 was
drafted to be bulletproof. The entire bill would fail if it
fails the single subject test.
4:29:36 PM
SENATOR MICCICHE stated the motor fuels tax bill passed the
Senate and advanced partially through the House. The EV portion
of that bill was segmented into SB 3002. He asked why there is a
single subject issue with SB 3002 but not the bill from which it
was drafted.
MS. NAUMAN replied that all sections of the other bill were
related to motor vehicles. SB 3002 has provisions about taxes,
so the single subject of the bill has changed from motor
vehicles to taxes.
4:30:42 PM
CHAIR REVAK recognized that Representative Cronk was in the
audience.
4:30:54 PM
SENATOR KIEHL stated he does not recall a distinction in the
constitution between taxes and fees. He used the Division of
Motor Vehicles as an example of raising more revenue through
fees than it uses, which presents the argument that all fees are
taxes. He asked if Alaska courts have opined on this distinction
and its importance to the single subject rule.
MS. NAUMAN answered that the courts have not opined on that
specific distinction. It has been discussed between attorneys
and the Leg Legal office. It was omitted from SB 3002 to
achieve zero risk of violating the single subject issue.
SENATOR BEGICH stated the intent of excluding an EV tax was to
remove the risk of having SB 3002 struck down after passing. He
relied on the advice of Leg Legal to avoid the risk. He does not
object to changes but cautioned against having a bill struck
down for invalidation reasons. He said he supports standalone
legislation on EVs.
SENATOR KIEHL commented that it seems unlikely SB 3002 would be
struck down under the single subject rule for inclusion of EV
fees.
4:33:15 PM
SENATOR BISHOP stated the genesis behind the motor fuels tax has
not changed. Roads need to be maintained, but maintenance
stations have closed due to a lack of funds. He stated his
support of the motor fuels tax has not changed.
SENATOR VON IMHOF stated that fairness seems to be lacking in SB
3002. Entities are excluded from the motor fuels tax, S
corporation tax, and per barrel credit rollback. She opined that
a lower broad-based tax bill would be better and asked why
exemptions were put forward instead.
4:36:16 PM
SENATOR BEGICH stated he favored a state income tax and
introduced a broad-based income tax bill that also captures out-
of-state income. He welcomes all members to co-sponsor it.
However, the governor indicated he would not support an income
tax.
SENATOR BEGICH said he would support a broad-based sales tax
that exempted clothing and food, but it has not been proposed.
Therefore, three previously heard bipartisan bills were combined
into one in an attempt to pass the Senate and House with a
simple majority. Combining the bills appeared to be the easiest
way to obtain passage of a revenue bill and bring resolution to
the dividend formula issue.
SENATOR BEGICH reiterated that SB 3002 was not designed to
single out any entity. To the extent that it does is a result of
the legislative process.
He encouraged members to change SB 3002 or present a broad-based
bill that can garner enough support to be passed because time is
of the essence. He stated his desire for SB 3002 to receive a
fair hearing and be moved to the next committee to receive
adjustments.
4:39:30 PM
SENATOR VON IMHOF said the state budget is balanced before
paying a dividend. New revenue is only needed to pay a dividend.
Therefore, she is opposed to new revenue being paid towards a
dividend until the dividend calculation is solved. Alaska has
many needs and the assignment of tax revenues should be
determinable. The cart is being put before the horse. She stated
her belief that the dividend issue needs to be resolved first,
and then the needs of the state assessed before discussions
about taxes happen.
She opined that SB 3002 is premature, unfair, targeted, and
would have significant unintended economic consequences. She is
not interested in dissecting or amending a bill where the
appropriation of revenue is unknown.
4:41:41 PM
SENATOR BEGICH stated his motivations are purely to solve the
problems presented by the fiscal plan working group.
CHAIR REVAK warned against impugning any member's motives.
4:42:28 PM
SENATOR MICCICHE stated he has talked about a tax plan that is
low, broad, and as temporary as possible to address Alaska's
fiscal situation. He opined that the approach to closing the
fiscal gap should be all-inclusive. He acknowledged the intent
of SB 3002 as a conversation starter for creating a
comprehensive fiscal plan. He stated his belief that the fuel
tax is unfair. Commercial fishers receive a $0.05 per gallon
holiday on fuel, and aviation is exempt even though Alaska has
many airports to maintain. He asked why electric vehicles, the
fishing industry, and the aircraft industry were excluded from
the motor fuels section of SB 3002.
4:45:24 PM
SENATOR BEGICH explained that SB 3002 was derived from the last
version of the motor fuels tax bill. Aviation fuel was excluded
from the original version because, in 2017, there was testimony
presented to the House Resources Committee on the direct impact
the tax would have on the ability of the Fairbanks and Anchorage
airports to be competitive in the world market.
Despite fairness, he reminded members that SB 3002 includes the
motor fuels tax bill as it passed in 2020. He does not know what
compromises occurred before it reached the Senate floor. There
were elements that Senators believed should have been included
that were not. He welcomed changes to SB 3002 but cautioned that
additions could make the bill less likely to pass. He said he
would like the bill to be discussed so that it can be moved.
4:47:32 PM
SENATOR MICCICHE stated he would research competition and its
relevance to the aviation fuel tax and other areas of the
economy that may be overlooked. He uses state services as a
commercial fisherman and is unaware of a reason to be excluded
from the tax.
He concluded that low, broad, and as temporary as possible is
the approach to use in the development of a fiscal plan. He
opined that taxes should be temporary until the growth of the
permanent fund improves Alaska's fiscal situation. He added that
a motor fuel tax was unlikely to be temporary.
4:49:20 PM
CHAIR REVAK asked if there is research indicating how industries
would be affected by imposing the $4 million net income tax
threshold.
SENATOR BEGICH replied he is not aware of any studies, but there
could have been answers if Senator Wielechowski's bills had been
heard. He reiterated that the $4 million threshold is a
presupposed number that can be raised. He appreciates members
hearing SB 3002.
4:51:26 PM
CHAIR REVAK stated it is important for resource committee
members to know a bill's impact on resources.
4:52:01 PM
SENATOR KIEHL commented that the idiom, putting the cart before
the horse, does not reflect the process of finding a solution to
Alaska's fiscal problem. He opined that the legislature is
"nailing together a cart while stitching a harness and teaching
the horse to take a bit." He appreciates that members are
working to figure out a fiscal solution.
He mentioned S corporations and said he perceives a fairness
discrepancy in the oil industry tax structure of SB 3002 because
two companies that produce the same resource from the same
basin, under the same lease terms, and the same workforce
structure pay materially higher taxes than one other company in
particular. He asked if that is a fairness issue that needs
addressing.
4:53:22 PM
SENATOR BEGICH answered yes. There is an unfair competitive
advantage because the income tax requirement is not the same.
This scenario applies to any S or C corporation with net profits
of $4 million that circumvents its corporate tax obligation. He
quipped that Alaska could have all S corporations and a $200
million fiscal gap.
4:54:25 PM
CHAIR REVAK held SB 3002 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 3002 Version A.PDF |
SRES 9/9/2021 3:30:00 PM |
SB3002 |
| SB 3002 Sponsor Statement.pdf |
SRES 9/9/2021 3:30:00 PM |
SB3002 |
| SB 3002 Sectional Analysis.pdf |
SRES 9/9/2021 3:30:00 PM |
SB3002 |
| Presentation DOR & DNR - Taxes Overview 09.09.2021.pdf |
SRES 9/9/2021 3:30:00 PM |
|
| SB 3002 Letter of Support - PWSRCAC.pdf |
SRES 9/9/2021 3:30:00 PM |
SB3002 |
| SB 3002 Letter of Opposition - Usibelli Coal Mine, Inc..pdf |
SRES 9/9/2021 3:30:00 PM |
SB3002 |
| SB 3002 Presentation - Sen. Begich SRES PPT.pdf |
SRES 9/9/2021 3:30:00 PM |
SB3002 |