CS FOR HOUSE BILL NO. 280(FIN)                                                                                                
                                                                                                                                
     "An  Act  relating  to   the  Multistate  Tax  Compact;                                                                    
     relating  to  apportionment  of income  to  the  state,                                                                    
     including the apportionment  of income of broadcasters,                                                                    
     financial institutions,  and telecommunications service                                                                    
     providers; and providing for an effective date."                                                                           
1:33:47 PM                                                                                                                    
                                                                                                                                
BRODIE   ANDERSON,   STAFF,  REPRESENTATIVE   NEAL   FOSTER,                                                                    
introduced the legislation. He stated  that the bill amended                                                                    
the  current   Alaska  multistate   compact  from   a  cost-                                                                    
performance  methodology  and  apportionment  formula  to  a                                                                    
market-based sourcing methodology.                                                                                              
                                                                                                                                
Co-Chair Stedman  wondered whether the  department supported                                                                    
the bill.                                                                                                                       
                                                                                                                                
1:37:40 PM                                                                                                                    
                                                                                                                                
BRANDON  SPANOS, ACTING  DIRECTOR, TAX  DIVISION, DEPARTMENT                                                                    
OF  REVENUE (DOR),  ANCHORAGE (via  teleconference), replied                                                                    
that the governor had similar  language in his tax bill, and                                                                    
the department was neutral on the bill.                                                                                         
                                                                                                                                
Senator  Kiehl asked  about  the  department's analysis.  He                                                                    
recalled  the different  methods  of  industries, and  asked                                                                    
about the differences.                                                                                                          
                                                                                                                                
Mr. Spanos replied  that there were three  amendments to the                                                                    
bill in  the House Finance  Committee that were  specific to                                                                    
special  industries. He  noted  that the  amendment for  the                                                                    
banking  industry added  language  that allowed  for DOR  to                                                                    
implement  regulations consistent  with the  multi-state tax                                                                    
commissions  regulations.  There  were statements  from  DOR                                                                    
that agreed to  those changes. He stated that  DOR liked the                                                                    
changes for other states to  consider. He noted that another                                                                    
change  was for  broadcasters,  which made  an exception  to                                                                    
market-based sourcing for certain  types of broadcasting. He                                                                    
stressed  that  DOR had  wanted  to  switch to  market-based                                                                    
sourcing for many years.                                                                                                        
                                                                                                                                
1:42:10 PM                                                                                                                    
                                                                                                                                
Senator   Kiehl   wanted   further  understanding   of   the                                                                    
broadcasting elements.  He surmised  that the  telecoms that                                                                    
invested in Alaska would effectively  be more subject to tax                                                                    
than those that do not invest in Alaska.                                                                                        
                                                                                                                                
Mr. Anderson deferred to Mr. Spanos.                                                                                            
                                                                                                                                
Mr. Spanos agreed with Senator Kiehl.                                                                                           
                                                                                                                                
Senator Kaufman  asked where  the definition  of broadcaster                                                                    
would be cut off, specifically related to YouTube.                                                                              
Mr. Spanos responded that it was a specialized definition,                                                                      
and the corporate income specialist was out of the office                                                                       
for the day. He agreed to provide further information.                                                                          
                                                                                                                                
Mr. Anderson thanked the committee.                                                                                             
                                                                                                                                
Senator Kiehl addressed the fiscal notes.                                                                                       
                                                                                                                                
Co-Chair Hoffman OPENED public testimony.                                                                                       
                                                                                                                                
Co-Chair Hoffman CLOSED public testimony.                                                                                       
                                                                                                                                
CSHB 280(FIN) was HEARD and HELD in committee for further                                                                       
consideration.