SB 100 — An Act relating to the taxation of income of individuals; repealing tax credits applied against the tax on individuals under the Alaska Net Income Tax Act; and providing for an effective date.

32-LS0254\I32-LS0254\A SPONSOR SUBSTITUTE FOR SENATE BILL NO.

3/10/213/5/21 Referred:

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(b) The tax under this section for a (1) resident individual is equal to the sum of five percent of the individual's total federal adjustedincome grosstax income;due;

(2) nonresident individual is equal to the sum of five percent of the nonresident individual's total federal adjustedincome grosstax due on the amount of the individual's income derived from or connected to a source in the state.

(c) In this section, "federal income tax due" means the total tax payable to the federal government as reported by the taxpayer on a federal individual income tax return, including alternative minimum tax and other taxes imposed by the Internal Revenue Code, as adjusted to exclude income that may not be taxed by the state under SB 100 -2- SB0100A New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\A federal law.

(a) AAn taxpayerindividual required to make a return under the provisions of the Internal Revenue Code shall file with the department a return setting out (1) the amount of tax due under this chapter;

and SSSB 100 -2- SB0100B New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\I (2) other information for the purpose of carrying out the provisions of this chapter that the department requires.

SB0100A -3- SB 100 New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\A (f) A taxpayer is not required to file a return under this section electronically unless the person is employed to prepare and file income tax returns for 10 or more individuals.

(a) For purposes of AS 43.22.010(a), income from a source in the state includes SB0100B -3- SSSB 100 New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\I (1) compensation for personal services rendered in the state;

(b) In this section, if a business, trade, or profession is carried on partly inside and partly outside the state, other than the rendering of purely personal services by an individual, the income from sources in the state shall be determined as provided in SB 100 -4- SB0100A New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\A AS 43.19.

(a) A resident is entitled to a credit against the tax liability under this chapter for the amount of tax paid to other states, territories, or possessions of the United States on income derived from sources in those jurisdictions that is also subject to tax in this chapter.

SSSB 100 -4- SB0100B New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\I (b) A credit allowed under (a) of this section may not (1) exceed the tax due under this chapter before credits are applied, multiplied by a fraction, the numerator of which is the portion of the taxpayer's federal adjusted gross income derived from or connected with a source in another state or the political subdivision of another state and the denominator of which is the taxpayer's federal adjusted gross income;

(2) reduce the tax due under this chapter to less than the tax that would have been due if the income derived from or connected with a source in another state or the political subdivision of another state and subject to taxation by the other state or political subdivision had been excluded from the taxpayer's federal adjusted gross income during the calculation of tax under this chapter before the application of credits.

(C) the total amount of wages, salary, or crew shares for the SB0100B -5- SSSB 100 New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\I calendar year;

(c) In this section, (1) "employee" includes an individual who receives compensation on a SB0100A -5- SB 100 New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\A crew share basis in connection with a commercial fishing activity;

(2) "federal"individual" adjusted gross income" means (A)a thenatural totalperson, adjustedmarried grossor incomeunmarried, reportedadult byor theminor, taxpayersubject onto apayment federalof individual income tax return,under but excluding income that may not be taxed by the stateInternal underRevenue federalCode; law;

or(3) (B)"Internal ifRevenue federalCode" taxesmeans arethe dueInternal underRevenue theCode federalof alternativethe SSSBUnited 100States -6-(26 SB0100BU.S.C.) Newas Textthe Underlinedcode [DELETEDexists TEXTnow BRACKETED]or 32-LS0254\Ias minimumhereafter tax,amended, as the totalcode alternativeand minimumamendments taxableapply incometo reportedthe bynormal thetaxes taxpayerand surtax on anet federalincomes, incomewhich taxamendments return,are excludingoperative incomefor thatthe maypurposes notof bethis taxedchapter byas of the statetime they became operative or will become operative under federal law;

(3)(4) "individual""nonresident" means aan naturalindividual person,who marriedis ornot unmarried,a adultresident; or minor, subject to payment of income tax under the Internal Revenue Code;

(4)(5) "Internal"resident" Revenue Code" means thean Internalindividual Revenuewho Code(A) ofwas thedomiciled Unitedin States (26 U.S.C.) as the codestate exists now or asresided hereafterin amended, as the codestate and amendments apply to the normal taxes and surtax on net incomes, which amendments are operative for the purposesentire ofcalendar thisyear; chapter as of the time they became operative or will become operative under federal law;

(5)(B) "nonresident"claims meansto anbe individuala whoresident isof notthe astate resident;on the individual's SB 100 -6- SB0100A New Text Underlined [DELETED TEXT BRACKETED] 32-LS0254\A federal tax forms;

(6) "resident" means an individual who (A) was domiciled in the state or resided in the state for the entire calendar year;

(B) claims to be a resident of the state on the individual's federal tax forms;

(7)(6) "taxpayer" means a person subject to a tax imposed by this chapter.

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