SB 50-EMPLOYMENT TAX FOR EDUCATION FACILITIES  1:32:07 PM CHAIR BISHOP announced the consideration of SENATE BILL NO. 50, "An Act imposing an annual educational facilities maintenance and construction tax on net earnings from self-employment and wages; relating to the administration and enforcement of the educational facilities maintenance and construction tax; and providing for an effective date." He stated that this is the third hearing for SB 50, public testimony was taken during the last hearing [and the committee adopted a committee substitute (CS) for SB 50, Version S]. He noted that Mr. Spanos was online to respond to questions Senator Stevens posed during the last hearing. SENATOR STEVENS asked how the fees would be collected for self- employed individuals. 1:33:25 PM BRANDON SPANOS, Deputy Director, Tax Division, Department of Revenue (DOR), Anchorage, Alaska, said the Department of Labor & Workforce Development currently collects unemployment insurance from employers and employees. SB 50 would implement a tax of $30 for each individual. The DOR's fiscal note reflects collecting from employers and self-employed individuals, so it would do both. He envisioned that self-employed individuals would submit some type of a return. Currently, the administrative section in AS 43 requires an electronic filing of any tax return or report. Unless the bill adds a paper option, filing for the $30 head tax would require an electronic filing. A provision in the bill would allow individuals who cannot file electronically to obtain a waiver. He anticipated that most self-employed individuals would file their return through DOR's online system to pay the $30 tax. The portal already exists for this secure submission, he said. SENATOR STEVENS asked how DOR will ensure this happens and how fishermen will know they must pay this tax, particularly those from out of state. MR. SPANOS said the information would likely be included when fishermen obtain their licenses. He explained that to collect taxes from marijuana-grower taxpayers, the division works with the Department of Commerce, Community and Economic Development (DCCED) since these individuals obtain licenses. He envisioned the process to collect the annual $30 tax would be similar. SENATOR STEVENS commented that everyone on commercial boats is required to have a license, so notices would be sent to everyone. He asked whether DOR would be able to withhold licenses if fishermen did not pay. MR. SPANOS replied the department has the ability to assess taxpayers who are not paying their taxes. He envisioned that DOR would likely do a cost-benefit analysis to determine if it was in the state's best interest to try to collect. He anticipated that the collection efforts would likely cost more than the $30 tax. SENATOR STEVENS commente that if word got out that the DOR would not pursue collections, no one would pay their taxes. MR. SPANOS responded that the department might consider other options. One option would be for payors to withhold the tax. The tax code states that professional licenses in the state will be suspended for those in arrears. The DOR notifies the Department of Commerce, Community and Economic Development (DCCED) when corporate taxpayers are in arrears and subsequently DCCED has suspended their licenses. It certainly would be possible to suspend fishermen's licenses, he said. SENATOR STEVENS said he was comfortable with the answers, but the Senate Finance Committee may want to consider this further to ensure that licenses are suspended for nonpayment. CHAIR BISHOP agreed. He commented that possible tax collection mechanisms exist, because the education head tax was collected from 1959-1980. SENATOR GRAY-JACKSON mentioned that during the last hearing she indicated she would contact the Anchorage School Board to submit comments on the bill. She related that she had a conversation with the board chair who will look into the matter. CHAIR BISHOP said he heard that ASD would be submitting testimony in response to her query. 1:41:11 PM CHAIR BISHOP found no further comments or questions and solicited a motion. 1:41:17 PM SENATOR STEVENS moved to report CSSB 50, work order 31-LS0383\S, from committee with individual recommendations and attached fiscal note(s). 1:41:28 PM CHAIR BISHOP found no objection and CSSB 50(L&C) was reported from the Senate Labor and Commerce Standing Committee.