Alaska 34th Alaska State Legislature Status: In Committee

SB 227 — An Act relating to the Multistate Tax Compact; relating to apportionment of income to the state; establishing a state sales and use tax; relating to taxes levied by cities and boroughs; relating to the corporate income tax; authorizing the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement or substantially similar agreement; relating to the oil and gas production tax; establishing an infrastructure maintenance surcharge on oil; establishing a pipeline corridor maintenance fund; and providing for an effective date.

Last action — (S) FINANCE at 09:00 AM SENATE FINANCE 532

  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House
  5. 5
    To Executive
  6. 6
    Enacted

This bill is in committee in the Senate. Introduced January 26, 2026. It must pass committee before a floor vote.

Next likely step: a committee vote, then a floor vote in the Senate.

Odds of enactment

Low chance

Based on the sponsor, cosponsors, and committee posture, this bill has a low chance of becoming law.

Upgrade to see the exact probability and what's driving it.

A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.

Prognosis

Stalled 14% · moderate confidence

  • In Committee

    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.

In plain language

The bill relates to various taxation measures including income and sales taxes in Alaska.

SB 227 establishes new taxes and modifies existing ones, including an income tax on oil and gas activities, and a sales tax. It also creates an infrastructure maintenance surcharge for oil and introduces provisions related to the Multistate Tax Compact.

What this means for you
  • Workers: If you are employed in oil or gas, you may be subject to new income taxes on your earnings.
  • Environment: The infrastructure maintenance surcharge could affect how oil industry expenditures are managed for environmental maintenance.

Bill Text

What changed in the latest version

1820 added · 1377 removed

Plain-language change summary

The recent changes to Senate Bill 227 involve significant adjustments to how taxes are structured in the state. The bill has removed the imposition of an income tax on oil and gas producers, as well as a proposed education tax on self-employed earnings, and shifted focus towards establishing a new sales and use tax and an infrastructure maintenance surcharge on oil. This matters because it changes the way revenue will be generated for state initiatives, particularly in funding education and maintaining infrastructure, which could affect public services and investments in the community.

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34-GS2496\G CS FOR SENATE BILL NO.
34-GS2496\A SENATE BILL NO.
227(RES) IN THE LEGISLATURE OF THE STATE OF ALASKA THIRTY-FOURTH LEGISLATURE - SECOND SESSION BY THE SENATE RESOURCES COMMITTEE Referred:
227 IN THE LEGISLATURE OF THE STATE OF ALASKA THIRTY-FOURTH LEGISLATURE - SECOND SESSION BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR Introduced:
Finance Sponsor(s):
1/26/26 Referred:
SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR A BILL FOR AN ACT ENTITLED "An Act relating to taxes;
Resources, Finance A BILL FOR AN ACT ENTITLED "An Act relating to the Multistate Tax Compact;
relating to the Multistate Tax Compact;
establishing an income tax on certain entities producing or transporting oil or gas in the state;
establishing a state sales and use tax;
relating to highly digitized businesses;
relating to taxes levied by cities and boroughs;
imposing an education tax on net earnings from self-employment and wages;
relating to the corporate income tax;
relating to the administration and enforcement of the education tax;
authorizing the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement or substantially similar agreement;
establishing a pipeline corridor maintenance fund;
The uncodified law of the State of Alaska is amended by adding a new section to read:
AS 28.10.021(a) is amended to read:
LEGISLATIVE INTENT.
(a) The owner of a vehicle subject to registration shall apply for registration under this chapter by properly completing the form prescribed by the commissioner under AS 28.05.041.
It is the intent of the legislature that the revenue from (1) the education head tax levied under AS 43.45.011, added by sec.
Before the issuance of a certificate of registration by the department, the owner shall SB0227A -1- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (1) pay all registration fees and taxes required under this chapter, [AND] federal heavy vehicle use taxes required under 26 U.S.C.
14 of this Act, be appropriated each year by the legislature to the public education fund under SB0227B -1- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G AS 14.17.300;
4481 (Internal Revenue Code of 1954), and a tax levied under AS 43.44.010;
and (2) the infrastructure maintenance surcharge on oil levied under AS 43.55.320, added by sec.
(2) unless the owner qualifies as a self-insurer under AS 28.20.400 or is exempted from obtaining liability insurance under AS 28.22.011, certify to the department the existence of a motor vehicle liability policy that complies with AS 28.22.011 for the vehicle being registered;
33 of this Act, be appropriated by the legislature each year for maintenance and operation costs incurred by the state along the pipeline corridor.
in this paragraph, "certify" means to indicate by check-off on the vehicle registration form prescribed by the department the existence of a policy of insurance, if a policy is required at that time, and the intention to continue the policy or obtain a policy as required by this subsection;
and (3) comply with other applicable statutes and regulations.
AS 37.18.010 is amended to read:
AS 29.10.200(56) is amended to read:
Sec.
(56) AS 29.45.650 [AS 29.45.650(c), (d), (e), (f), (i), (j), (k), AND (l)] (sales and use tax);
37.18.010.
Alaska Tax Credit Certificate Bond Corporation.
The Alaska Tax Credit Certificate Bond Corporation is established in the Department of Revenue.
The corporation is a public corporation and government instrumentality managed by a board of directors.
The purpose of the corporation is to finance under AS 43.55.028 (1) the purchase of (A) transferable tax credit certificates issued under former AS 43.55.023;
(B) production tax credit certificates issued under former AS 43.55.025;
and (2) the payment of refunds and payments claimed under AS 43.20.046, 43.20.047, or 43.20.053.
AS 29.10.200(57) is amended to read:
(57) AS 29.45.700 [AS 29.45.700(d), (e), (g), AND (h)] (sales and use tax);
* Sec.
4.
AS 29.10.200 is amended by adding a new paragraph to read:
(68) AS 29.45.655 (specific taxes on property and services).
* Sec.
5.
AS 29.35.110(a) is amended to read:
(a) Borough revenues received through taxes levied [COLLECTED] on an areawide basis by the borough may be expended on general administrative costs and on areawide functions only.
Borough revenues received through taxes levied [COLLECTED] on a nonareawide basis may be expended on general administrative costs and functions that render service only to the area outside all cities in the borough.
* Sec.
6.
AS 29.35.170 is amended to read:
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Sec.
29.35.170.
Assessment and collection of taxes.
(a) A borough shall assess and collect property and other [, SALES, AND USE] taxes, except a local sales or use tax under AS 29.45.650, that are levied in its boundaries, subject to AS 29.45.
SB 227 -2- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (b) Taxes, other than a local sales or use tax under AS 29.45.650, levied by a city shall be collected by a borough and returned in full to the levying city.
This subsection applies to home rule and general law municipalities.
* Sec.
7.
AS 29.45.650 is repealed and reenacted to read:
Sec.
29.45.650.
Local sales and use tax.
(a) Except as provided in AS 04.21.010(c) and AS 29.45.750, a borough may levy a local sales tax on the sale of personal property and on services provided in the borough.
(b) A borough levying a local sales tax may levy a use tax equal to the local sales tax on the storage, use, or consumption of personal property and on the use of services in the borough.
(c) A tax levied under this section shall be levied only on a purchaser.
(d) A tax levied under this section shall be subject to exemptions, definitions, sourcing rules, and regulations under AS 43.44 and shall be administered and collected by the state under AS 43.44.
* Sec.
8.
AS 29.45 is amended by adding a new section to read:
Sec.
29.45.655.
Specific taxes on property and services.
Unless otherwise prohibited by law, a municipality may levy and collect specific sales or excise taxes on single categories of personal property or services, including (1) bed taxes;
(2) car rental taxes:
(3) alcoholic beverages taxes;
(4) taxes on tobacco products, electronic smoking products, and nicotine products;
(5) motor fuel taxes;
(6) fish taxes;
and (7) taxes on marijuana and marijuana products.
* Sec.
9.
AS 29.45.660(a) is amended to read:
(a) If the borough levies [AND COLLECTS] only a local sales tax and use tax, the assembly shall provide a notice substantially in the form set out in AS 29.45.020.
In providing notice under this subsection, the assembly shall substitute for the millage equivalency its estimate of the equivalent sales tax rate for each of the SB0227A -3- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A categories of financial assistance set out in AS 29.45.020.
Notice shall be provided (1) by posting on a continuously available online public notice system or by publishing in a newspaper of general circulation in the borough a copy of the notice at least once each week for a period of three successive weeks, with publication to occur not later than 45 days after the final adoption of the borough's budget;
or (2) if there is no newspaper of general circulation in the borough or a continuously available online public notice system, by posting a copy of the notice for at least 20 days in at least two public places in the borough, with posting to occur not later than 45 days after the final adoption of the borough's budget.
* Sec.
10.
AS 29.45.700 is repealed and reenacted to read:
Sec.
29.45.700.
Power of levy.
A city may levy a local sales and use tax in the manner and subject to the same limitation provided for boroughs under AS 29.45.650 and 29.45.660.
* Sec.
11.
AS 29.45.810(a) is amended to read:
(a) A party to a contract approved by the legislature as a result of submission of a proposed contract developed under AS 43.82 or as a result of acts by the legislature in implementing the purposes of AS 43.82, and the property, gas, products, and activities associated with the approved qualified project that is subject to the contract, are exempt, as specified in the contract, from all taxes identified in the contract that would be levied [AND COLLECTED] by a municipality under state law as a consequence of the participation by the party in the approved qualified project.
* Sec.
12.
AS 36.10.005(a) is amended to read:
(a) The legislature finds that (1) because of its unique climate and its distance from the contiguous states, the state has historically suffered from unique social, seasonal, geographic, and economic conditions that result in an unstable economy;
(2) the unstable economy is a hardship on the residents of the state and is aggravated by the large numbers of seasonal and transient nonresident workers;
(3) the rate of unemployment among residents of the state is one of the highest in the nation;
SB 227 -4- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (4) the state has one of the highest ratios of nonresident to resident workers in the nation;
(5) the state has a compelling interest in reducing the level of unemployment among its residents;
(6) the construction industry in the state accounts for a substantial percentage of the available employment;
(7) construction workers receive a greater percentage of all unemployment benefits paid by the state than is typical of other states;
(8) historically, the rate of unemployment in the construction industry in the state is higher than the rate of unemployment in other industries in the state;
(9) it is appropriate for the state to consider the welfare of its residents when it funds construction activity;
(10) it is in the public interest for the state to allocate public funds for capital projects in order to reduce unemployment among its resident construction workers;
(11) the influx of nonresident construction workers contributes to or causes the high unemployment rate among resident construction workers because nonresident workers compete with residents for the limited number of available construction jobs;
(12) nonresident workers displace a substantial number of qualified, available, and unemployed Alaska workers on jobs on state funded public works projects;
(13) the state has a special interest in seeing that the benefits of state construction spending accrue to its residents;
(14) the natural resources of land owned by the state belong to the citizens of the state;
(15) Alaskans have chosen to use the majority of the royalties derived from the state's natural resources to fund state government;
(16) the vast majority of the state's revenue is derived from natural resource income rather than from other forms of taxation;
(17) because the state has no personal income tax [OR SALES TAX], SB0227A -5- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A nonresident workers use services provided by the state but do not contribute fairly to the costs of those services;
and (18) Alaskans, more than the residents of other states, suffer economically when nonresidents displace qualified residents since resident workers contribute local taxes as well as their share of the royalties from natural resources.
* Sec.
13.
AS 43.05.230(c) is amended to read:
(c) The department may permit the proper officer of a municipality, the United States or of a state, territory or possession of the United States or of Canada or of a province or territory of Canada, or the officer's authorized representative, to inspect tax returns or reports filed with the department, or may furnish to the officer or representative a copy of the tax return, if the other jurisdiction grants substantially similar privileges to the department or its representative or to counsel for the state, and if the department determines that the other jurisdiction provides adequate safeguards for the confidentiality of the returns and reports, and that the returns and reports will be used for tax purposes only.
The department may also permit the division responsible for employment and training services of the state Department of Labor and Workforce Development to inspect tax returns or reports filed with the department or may furnish a copy of the tax returns for tax purposes only.
* Sec.
14.
AS 43.05.499(11) is amended to read:
(11) "taxpayer" means a person required to pay or collect a tax, including a person required to pay a seafood marketing assessment under AS 16.51.
* Sec.
15.
2.
SB 227 -6- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A 2.
CSSB 227(RES) -2- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G 4.
4.
8.
SB0227A -7- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A 8.
"Use tax" means a nonrecurring tax, other than a sales tax, which (a) is imposed on or with respect to the exercise or enjoyment of any right or power over tangible personal property incident to the ownership, possession or custody of that property or the leasing of that property from another including any consumption, SB0227B -3- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G keeping, retention, or other use of tangible personal property and (b) is complementary to a sales tax.
"Use tax" means a nonrecurring tax, other than a sales tax, which (a) is imposed on or with respect to the exercise or enjoyment of any right or power over tangible personal property incident to the ownership, possession or custody of that property or the leasing of that property from another including any consumption, keeping, retention, or other use of tangible personal property and (b) is complementary to a sales tax.
Each party state or any subdivision thereof which imposes an income tax shall provide by law that any taxpayer required to file a return, whose only activities within the taxing jurisdiction consist of sales and do not include owning or renting real estate or tangible personal property, and whose dollar volume of gross sales made during the tax year within the state or subdivision, as the case may be, is not in excess CSSB 227(RES) -4- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G of $100,000 may elect to report and pay any tax due on the basis of a percentage of such volume, and shall adopt rates which shall produce a tax which reasonably approximates the tax otherwise due.
Each party state or any subdivision thereof which imposes an income tax SB 227 -8- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A shall provide by law that any taxpayer required to file a return, whose only activities within the taxing jurisdiction consist of sales and do not include owning or renting real estate or tangible personal property, and whose dollar volume of gross sales made during the tax year within the state or subdivision, as the case may be, is not in excess of $100,000 may elect to report and pay any tax due on the basis of a percentage of such volume, and shall adopt rates which shall produce a tax which reasonably approximates the tax otherwise due.
and (ii) any income that would be allocable to this state under the Constitution of the United States, but that is apportioned rather than allocated pursuant to the laws of this state [OPERATIONS].
and (ii) any income that would be allocable to this state under the Constitution of the United States, but that is apportioned rather than allocated SB0227A -9- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A pursuant to the laws of this state [OPERATIONS].
(c) "Compensation" means wages, salaries, commissions and any other form SB0227B -5- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G of remuneration paid to employees for personal services.
(c) "Compensation" means wages, salaries, commissions and any other form of remuneration paid to employees for personal services.
Any taxpayer having income from business activity which is taxable both within and outside this state, other than activity as a financial organization or public utility or the rendering of purely personal services by an individual, shall allocate and apportion net income as provided in this Article.
Any taxpayer having income from business activity which is taxable both within and outside this state, other than activity as a financial organization or public SB 227 -10- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A utility or the rendering of purely personal services by an individual, shall allocate and apportion net income as provided in this Article.
If a taxpayer has income from business activity as a public utility but derives the greater percentage of income from activities subject to this Article, the taxpayer may elect to allocate and apportion the CSSB 227(RES) -6- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G taxpayer's entire net income as provided in this Article.
If a taxpayer has income from business activity as a public utility but derives the greater percentage of income from activities subject to this Article, the taxpayer may elect to allocate and apportion the taxpayer's entire net income as provided in this Article.
6.(a) Capital gains and losses from sales of real property located in this state are allocable to this state.
6.(a) Capital gains and losses from sales of real property located in this state SB0227A -11- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A are allocable to this state.
(b) Capital gains and losses from sales of tangible personal property are allocable to this state if (1) the property had a situs in this state at the time of the sale, or (2) the taxpayer's commercial domicile is in this state and the taxpayer is not SB0227B -7- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G taxable in the state in which the property had a situs.
(b) Capital gains and losses from sales of tangible personal property are allocable to this state if (1) the property had a situs in this state at the time of the sale, or (2) the taxpayer's commercial domicile is in this state and the taxpayer is not taxable in the state in which the property had a situs.
The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax period.
The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during SB 227 -12- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A the tax period.
Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate CSSB 227(RES) -8- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G received by the taxpayer from subrentals.
Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals.
or (b) the property is shipped from an office, store, warehouse, factory, or other place of storage in this state and (1) the purchaser is the United States Government or (2) the taxpayer is not taxable in the state of the purchaser.
or (b) the property is shipped from an office, store, warehouse, factory, or other place of storage in this state and (1) the purchaser is the United States Government or SB0227A -13- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (2) the taxpayer is not taxable in the state of the purchaser.
SB0227B -9- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G (1) in the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this state;
(1) in the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this state;
(c) If the taxpayer is not taxable in a state to which a sale is assigned under subsection (a) or (b), or if the state of assignment cannot be determined under subsection (a) or reasonably approximated under subsection (b), such a sale shall be excluded from the denominator of the sales factor.
SB 227 -14- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (c) If the taxpayer is not taxable in a state to which a sale is assigned under subsection (a) or (b), or if the state of assignment cannot be determined under subsection (a) or reasonably approximated under subsection (b), such a sale shall be excluded from the denominator of the sales factor.
CSSB 227(RES) -10- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G (d) The tax administrator may adopt regulations as necessary or appropriate to carry out the purposes of this section [THE INCOME- PRODUCING ACTIVITY IS PERFORMED BOTH IN AND OUTSIDE THIS STATE AND A GREATER PROPORTION OF THE INCOME-PRODUCING ACTIVITY IS PERFORMED IN THIS STATE THAN IN ANY OTHER STATE, BASED ON COSTS OF PERFORMANCE].
(d) The tax administrator may adopt regulations as necessary or appropriate to carry out the purposes of this section [THE INCOME- PRODUCING ACTIVITY IS PERFORMED BOTH IN AND OUTSIDE THIS STATE AND A GREATER PROPORTION OF THE INCOME-PRODUCING ACTIVITY IS PERFORMED IN THIS STATE THAN IN ANY OTHER STATE, BASED ON COSTS OF PERFORMANCE].
Whenever a vendor receives and accepts in good faith from a purchaser a resale or other exemption certificate or other written evidence of exemption authorized by the appropriate state or subdivision taxing authority, the vendor shall be relieved of liability for a sales or use tax with respect to the transaction.
Whenever a vendor receives and accepts in good faith from a purchaser a SB0227A -15- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A resale or other exemption certificate or other written evidence of exemption authorized by the appropriate state or subdivision taxing authority, the vendor shall be relieved of liability for a sales or use tax with respect to the transaction.
SB0227B -11- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G THE COMMISSION.
THE COMMISSION.
(f) The commission shall elect annually, from among its members, a chairman, a vice-chairman and a treasurer.
SB 227 -16- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (f) The commission shall elect annually, from among its members, a chairman, a vice-chairman and a treasurer.
The CSSB 227(RES) -12- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G commission shall make provision for the bonding of such of its officers and employees as it may deem appropriate.
The commission shall make provision for the bonding of such of its officers and employees as it may deem appropriate.
2.(a) To assist in the conduct of its business when the full commission is not meeting, the commission shall have an executive committee of seven members, including the chairman, vice-chairman, treasurer and four other members elected annually by the commission.
2.(a) To assist in the conduct of its business when the full commission is not SB0227A -17- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A meeting, the commission shall have an executive committee of seven members, including the chairman, vice-chairman, treasurer and four other members elected annually by the commission.
The executive committee, subject to the provisions of this compact and consistent with the policies of the commission, shall function as SB0227B -13- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G provided in the bylaws of the commission.
The executive committee, subject to the provisions of this compact and consistent with the policies of the commission, shall function as provided in the bylaws of the commission.
(b) Each of the commission's budgets of estimated expenditures shall contain specific recommendations of the amounts to be appropriated by each of the party states.
(b) Each of the commission's budgets of estimated expenditures shall contain specific recommendations of the amounts to be appropriated by each of the party SB 227 -18- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A states.
and the remainder in proportion to the amount of revenue collected by each party state and its subdivisions from income taxes, capital stock taxes, gross receipts, taxes, sales and use CSSB 227(RES) -14- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G taxes.
and the remainder in proportion to the amount of revenue collected by each party state and its subdivisions from income taxes, capital stock taxes, gross receipts, taxes, sales and use taxes.
1.
SB0227A -19- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A 1.
Whenever any two or more party states, or subdivisions of party states, have uniform or similar provisions of law relating to an income tax, capital stock tax, gross receipts tax, sales or use tax, the commission may adopt uniform regulations for any phase of the administration of such law, including assertion of jurisdiction to tax, or SB0227B -15- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G prescribing uniform tax forms.
Whenever any two or more party states, or subdivisions of party states, have uniform or similar provisions of law relating to an income tax, capital stock tax, gross receipts tax, sales or use tax, the commission may adopt uniform regulations for any phase of the administration of such law, including assertion of jurisdiction to tax, or prescribing uniform tax forms.
The commission shall make charges, to be paid by the state or local government or governments for which it performs the service, for any audits performed by it in order to reimburse itself for the actual costs incurred in making the audit.
The commission shall make charges, to be paid by the state or local government or governments for which it performs the service, for any audits performed by it in order to reimburse itself for the SB 227 -20- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A actual costs incurred in making the audit.
The commission may require the attendance of any person within the state where it is conducting an audit or part thereof at a time and place fixed by it within such state for the purpose of giving testimony with respect to any account, book, CSSB 227(RES) -16- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G paper, document, other record, property or stock of merchandise being examined in connection with the audit.
The commission may require the attendance of any person within the state where it is conducting an audit or part thereof at a time and place fixed by it within such state for the purpose of giving testimony with respect to any account, book, paper, document, other record, property or stock of merchandise being examined in connection with the audit.
Availability of information shall be in accordance with the laws of the states or subdivisions on whose account the commission performs the audit, and only through the appropriate agencies or officers of such states or subdivisions.
Availability of information shall be in accordance with the laws of the states or subdivisions on whose account the commission performs the audit, and SB0227A -21- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A only through the appropriate agencies or officers of such states or subdivisions.
Other arrangements made or authorized pursuant to laws for cooperative SB0227B -17- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G audit by or on behalf of the party states or any of their subdivisions are not superseded or invalidated by this Article.
Other arrangements made or authorized pursuant to laws for cooperative audit by or on behalf of the party states or any of their subdivisions are not superseded or invalidated by this Article.
The arbitration board shall be composed of one person selected by the taxpayer, one by the agency or agencies involved, and one member of the commission's arbitration panel.
The arbitration board shall be composed of one person selected by the taxpayer, one by the agency or agencies involved, and one member of the SB 227 -22- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A commission's arbitration panel.
The two persons selected for the board in the manner provided by the foregoing provisions of this paragraph shall jointly select the CSSB 227(RES) -18- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G third member of the board.
The two persons selected for the board in the manner provided by the foregoing provisions of this paragraph shall jointly select the third member of the board.
No officer or employee of a state or local government who serves as a member of a board shall be entitled to compensation therefor unless the member is required on account of the service as a board member to forego the regular compensation attaching to the public employment, but any such board member shall be entitled to expenses.
No officer or employee of a state or local government who serves as a member of a board shall be SB0227A -23- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A entitled to compensation therefor unless the member is required on account of the service as a board member to forego the regular compensation attaching to the public employment, but any such board member shall be entitled to expenses.
The board shall determine the disputed apportionment or allocation and any SB0227B -19- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G matters necessary thereto.
The board shall determine the disputed apportionment or allocation and any matters necessary thereto.
No proceeding commenced before an arbitration board prior to the withdrawal of a state and to which the withdrawing state or any subdivision thereof is a party shall be discontinued or terminated by the withdrawal, nor shall the board thereby lose jurisdiction over any of the parties to the proceeding necessary to make a binding determination therein.
No proceeding commenced before an arbitration board prior to the withdrawal of a state and to which the withdrawing state or any subdivision thereof is a party shall be discontinued or terminated by the withdrawal, nor shall the board thereby lose jurisdiction over any of the parties to the proceeding necessary to make a SB 227 -24- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A binding determination therein.
CSSB 227(RES) -20- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G (a) Affect the power of any state or subdivision thereof to fix rates of taxation, except that a party state shall be obligated to implement Article III 2 of this compact.
(a) Affect the power of any state or subdivision thereof to fix rates of taxation, except that a party state shall be obligated to implement Article III 2 of this compact.
4.
16.
AS 43.20 is amended by adding a new section to read:
AS 43.20.011(e) is repealed and reenacted to read:
Sec.
(e) There is imposed for each taxable year upon the entire taxable income of every corporation derived from sources within the state a tax of zero percent of the taxable income.
43.20.019.
SB0227A -25- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A * Sec.
Tax on income attributable to a qualified entity.
17.
(a) Each taxable year, a tax is imposed on the entire taxable income derived from sources in the state of every qualified entity.
The tax is computed as follows:
If the taxable income is:
Then the tax is:
Less than $1,000,000 zero $1,000,000 but less than $2,000,000 5 percent of the taxable income over $1,000,000 SB0227B -21- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G $2,000,000 but less than $3,000,000 $50,000 plus 6 percent of the taxable income over $2,000,000 $3,000,000 but less than $4,000,000 $110,000 plus 7 percent of the taxable income over $3,000,000 $4,000,000 but less than $5,000,000 $180,000 plus 8 percent of the taxable income over $4,000,000 $5,000,000 or more $260,000 plus 9.4 percent of the taxable income over $5,000,000.
(b) For purposes of calculating taxable income under this section, (1) taxable income of a qualified entity is determined under AS 43.20.144 as if the qualified entity were taxable as a C corporation, as defined by 26 U.S.C.
1361(a)(2) (Internal Revenue Code), as that section read on January 1, 2026;
(2) notwithstanding AS 43.20.021 and AS 43.20.036, the taxpayer may not apply as a credit or deduction against tax liability a credit or deduction allowed as to federal taxes under 26 U.S.C.
(Internal Revenue Code), except that the taxpayer may take a credit or deduction allowed for a C corporation under (1) of this subsection.
(c) The tax under this section does not apply to a corporation subject to tax under AS 43.20.011 or to an entity that is part of a unitary business with a corporation subject to tax under AS 43.20.011.
(d) For the purpose of determining the tax due under this section, the department shall (1) aggregate the taxable income of two or more entities if the department determines that, without the provisions of this section, the taxable income would reasonably be expected to be attributed to a single entity;
and (2) except as provided in (c) of this section, include in the calculation of taxable income of the qualified entity income that is attributable to an entity that is part of a unitary business with the qualified entity paying tax under this section.
(e) In this section, (1) "qualified entity" means a CSSB 227(RES) -22- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G (A) sole proprietorship;
(B) partnership;
(C) limited liability company;
or (D) entity that has elected to file federal returns under 26 U.S.C.
1361 - 1379 (Internal Revenue Code);
(2) "taxable income" means income from the production of oil or gas from a lease or property in the state or from the transportation of oil or gas by pipeline in the state.
* Sec.
5.
AS 43.20.030(a) is amended to read:
(a) If a taxpayer [CORPORATION], or a partnership that has a taxpayer [CORPORATION] as a partner, is required to make a return under the provisions of the Internal Revenue Code, the taxpayer [IT] shall file with the department, within 30 days after the federal return is required to be filed, a return setting out (1) the amount of tax due under this chapter, less credits claimed against the tax;
and (2) other information for the purpose of carrying out the provisions of this chapter that the department requires.
* Sec.
6.
AS 43.20.031(i) is amended to read:
(i) A taxpayer that [CORPORATION WHICH] is a member of a group of unitary corporations or entities that [WHICH] collectively has income from business activity taxable both inside and outside the state, or income from other sources both inside and outside the state, shall determine its income from sources in this state by use of the combined method of accounting.
* Sec.
7.
AS 43.20.031 is amended by adding a new subsection to read:
(j) For purposes of calculating income under this chapter, a taxpayer may deduct from income a payment to the shareholder, owner, member, or partner of a qualified entity, as that term is defined in AS 43.20.019(e), if (1) the shareholder, owner, member, or partner is a taxpayer under this chapter;
(2) the payment does not include a transfer of property;
and (3) the payment is included in the shareholder's, owner's, member's, or SB0227B -23- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G partner's income for the purposes of this chapter.
* Sec.
8.
9.
18.
(a) All apportionable [BUSINESS] income of a taxpayer engaged in the production of oil or gas from a lease or property in this state or engaged in the CSSB 227(RES) -24- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G transportation of oil or gas by pipeline in this state shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax Compact) as modified by this section.
(a) All apportionable [BUSINESS] income of a taxpayer engaged in the production of oil or gas from a lease or property in this state or engaged in the transportation of oil or gas by pipeline in this state shall be apportioned to this state in SB 227 -26- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A accordance with AS 43.19 (Multistate Tax Compact) as modified by this section.
10.
19.
11.
20.
(2) the apportionment factor of a taxpayer subject to this section but SB0227B -25- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G not engaged in the pipeline transportation of oil or gas in this state during the tax period is a fraction, the numerator of which is the sum of the property factor under (e) of this section and the extraction factor under (f) of this section for the taxpayer for the tax period, and the denominator of which is two;
(2) the apportionment factor of a taxpayer subject to this section but not engaged in the pipeline transportation of oil or gas in this state during the tax SB0227A -27- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A period is a fraction, the numerator of which is the sum of the property factor under (e) of this section and the extraction factor under (f) of this section for the taxpayer for the tax period, and the denominator of which is two;
12.
21.
AS 43.20.145(e) is amended to read:
AS 43 is amended by adding a new chapter to read:
(e) The department may require a corporation that files under (a) of this section to file a report under AS 43.20.142, [AND] 43.20.143, and 43.20.148 prepared without regard to this section if the corporation or an affiliated corporation (1) fails to comply with regulations adopted under this chapter, including domestic disclosure spread sheet filing requirements;
Chapter 44.
or (2) does not provide information that is requested by the department that is necessary for the department to audit the taxpayer's corporate return in a reasonable period of time.
Sales and Use Tax.
* Sec.
Article 1.
13.
Levy and Collection of the Tax.
AS 43.20 is amended by adding a new section to article 2 to read:
43.20.148.
43.44.010.
Highly digitized businesses.
Levy of sales and use tax.
(a) All apportionable income of a taxpayer engaged in a highly digitized business in the state shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax Compact) as modified by this section.
(a) There is levied a sales tax on the retail sale of personal property and services to a purchaser in the state.
(b) The apportionment factor of a taxpayer subject to this section is the sales factor.
The rate of the tax is (1) four percent from April 1 through September 30;
The sales factor is determined in accordance with AS 43.19 (Multistate Tax Compact).
and (2) two percent from October 1 through March 31.
(c) A taxpayer is engaged in a highly digitized business in this state when 50 percent or more of the taxpayer's sales in this state consist of any combination of sales of (1) intangible property delivered by electronic transmission in this CSSB 227(RES) -26- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G state;
(b) There is levied a use tax on the use in this state of personal property and services identified in this subsection.
(2) services delivered by electronic transmission in this state;
The rate of the use tax is equal to the applicable sales tax rate under (a) of this section at the time of the use.
(3) services related to computers, electronic transmissions, or Internet technology delivered in this state;
The use tax applies to (1) personal property purchased (A) outside the state as a result of a transaction that would have been subject to the sales tax levied under this section had it occurred in the state;
or (4) tangible personal property delivered in this state from Internet sales, if the Internet is the primary mode of customer access in this state.
or (B) by a purchaser for use in an exempt manner but that was later converted to a use subject to the sales tax levied under this section;
(d) The department may require a taxpayer to apportion income under this section if the department determines that the taxpayer's business activity in this state may be otherwise characterized as a highly digitized business.
or (2) services purchased outside the state that would be subject to the sales tax levied under this section if purchased in the state.
(e) This section does not apply to a (1) public utility allocating and apportioning income under AS 43.20.146;
or (2) utility furnishing telecommunications services.
(f) In this section, (1) "delivered" includes delivered to or on behalf of a customer or delivered through a customer;
(2) "electronic transmission" includes transmission by wire, lines, cable, fiber optics, electronic signals, satellite transmission, audio or radio waves, or similar means, whether or not the provider owns, leases, or otherwise controls the transmission equipment;
(3) "intangible property" includes licenses and sublicenses for data access, streaming or other electronic transmission of music, videos, books, games, or other digital goods, and remote access software;
(4) "Internet sales" includes sales through an Internet website, application, or other electronic means, including sales made by computer, tablet, telephone, or other similar device.
* Sec.
14.
AS 43.45 is amended by adding new sections to read:
Chapter 45.
Education Tax.
43.45.011.
43.44.020.
Tax imposed.
Liability and collection of sales and use taxes.
(a) A tax is imposed on wages and on net earnings from self-employment of every (1) resident individual;
(a) A tax levied under AS 43.44.010 is imposed on the purchaser.
and SB0227B -27- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G (2) nonresident and part-year resident individual with income from a source in the state.
The seller, including a remote seller, shall apply the tax to the sales price and collect the tax from the purchaser.
(b) For an individual whose wages, net earnings from self-employment, or combined wages and net earnings from self-employment are (1) less than $30,000, the tax is $20 a year;
The SB 227 -28- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A seller holds the tax in trust for the state and shall pay the tax to the department.
(2) $30,000 or more, but less than $90,000, the tax is $30 a year;
(b) A tax levied under AS 43.44.010(b) is imposed on the user .
(3) $90,000 or more, but less than $150,000, the tax is $40 a year;
A seller located outside the state who has a nexus to the state and who sells goods or services subject to the tax levied in AS 43.44.010(b) shall collect the use tax from the purchaser and pay the tax collected to the department.
(4) $150,000 or more, the tax is $60 a year.
(c) A marketplace facilitator that meets the threshold requirements for a remote seller under AS 43.44.490 is considered the seller for each sale facilitated through its marketplace.
(c) For purposes of (b) of this section, the wages and the net earnings from self-employment of a (1) resident are the total annual wages and the net earnings from self- employment of the resident;
A marketplace facilitator shall collect and remit the tax levied under this chapter.
(2) nonresident or part-year resident are the annual wages and the net earnings from self-employment of the nonresident or part-year resident that are attributable to a source in the state.
(d) Unless the tax has already been paid under (a) of this section, a person in the state who purchases goods or services from a seller located outside the state that does not qualify as a remote seller under this chapter shall pay the sales tax described in AS 43.44.010(a) to the department.
(e) Unless the tax has already been paid under (b) of this section, the purchaser of personal property or services subject to the use tax described in AS 43.44.010(b) shall pay the tax to the department at the time the property or service is first used in the state.
(f) A seller is liable for a tax the seller is required to collect under this section.
If a seller is not required to collect a tax under this section, the purchaser is liable for the tax.
Liability for the payment of a tax levied under this chapter is not extinguished until the tax has been paid to the department.
(g) If a seller collects a tax in excess of a tax imposed under AS 43.44.010, the seller shall remit the excess to the department.
(h) The department shall adopt regulations to prevent evasion of taxes imposed under this chapter and to aid in its administration of the collection of taxes under this chapter.
43.45.021.
43.44.030.
Collection of tax by employer.
Receipt and remittance of local sales and use taxes.
(a) An employer shall deduct and withhold one-half of the estimated taxes due under AS 43.45.011 from an employee's wages subject to withholding under 26 U.S.C.
(a) The department shall receive municipal sales and use taxes levied under AS 29.45.650 and 29.45.700 and remit the proceeds to the municipality.
3401 - 3406 from each of the third and fourth regular payrolls of the calendar year.
Under AS 43.05 and AS 43.10, the department shall administer, receive, and enforce a sales tax and use tax levied under AS 29.45.650 and 29.45.700.
If the employee's third and fourth payrolls are insufficient to cover the estimated tax due, the employer shall continue to deduct and withhold from subsequent payrolls until the tax due under this chapter is fully withheld.
SB0227A -29- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (b) The department is authorized to establish and collect administrative fees from municipalities associated with the costs incurred from the receipt, audit, enforcement, and remittance of a local sales tax and use tax levied under AS 29.45.650 and 29.45.700.
The employer shall withhold any outstanding amount of tax due under AS 43.45.011 from the final regular payroll of the calendar year.
(b) An employer is liable for the tax required to be withheld from an employee unless the employer can demonstrate that the employer relied on proof provided by the employee that the total tax for the calendar year imposed under AS 43.45.011 had already been withheld under this section or paid under AS 43.45.031.
A deduction of the tax may not be made from the wages of an individual who provides proof to the employer that the entire tax imposed under AS 43.45.011 on that individual for the calendar year has already been withheld or paid under AS 43.45.031.
The department may impose a civil penalty on an employer in an amount up to five times the amount CSSB 227(RES) -28- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G of tax due from employees but not remitted to the department.
The penalty shall be imposed in the manner provided by AS 43.05.245.
(c) Tax withheld by an employer becomes due and shall be paid by an employer to the department in accordance with regulations adopted by the department.
(d) An employer shall maintain a record of the amount deducted from the wages of each employee and shall furnish an annual statement of the deductions to each employee and to the department in accordance with regulations adopted by the department.
(e) The department shall, if it will result in cost savings for the state in the administration of the tax, for employers in the administration of the tax, or for both, coordinate collection and reporting of the tax imposed in this chapter with the collection and reporting of employment security contributions by the Department of Labor and Workforce Development, including permitting the Department of Labor and Workforce Development to collect the tax payments and remit them to the department.
43.45.031.
43.44.040.
Payment of tax by self-employed individual.
Sourcing.
A self- employed individual shall remit to the department the tax due under AS 43.45.011 in accordance with regulations adopted by the department until the entire tax has been paid.
Notwithstanding AS 43.44.430, the department shall adopt regulations establishing sourcing rules for transactions subject to a tax under this chapter.
The regulations may adopt the standards of an agreement authorized under AS 43.44.400.
Article 2.
Exemptions.
43.45.041.
43.44.100.
Refund of overpayments.
Exemptions.
(a) If an individual pays to the department, directly or through withholding by an employer, an amount exceeding the total tax imposed under this chapter during a calendar year and the individual applies for a refund in accordance with regulations adopted by the department, the department shall refund the overpayment to the individual.
(a) The following are exempt from a tax levied under this chapter:
(b) Interest on an overpayment may not be allowed under AS 43.05.280 if the department refunds the overpayment within 90 days after the date the individual correctly files the refund claim.
(1) a sale by, sale to, or use by the United States;
(c) The Department of Revenue may adopt regulations to coordinate refunds of overpayments under this section with refunds of employment security contributions under AS 23.20.165.
(2) a sale by, sale to, or use by the state or an instrumentality of the state, as defined in AS 39.52.960;
(d) An individual may apply for a refund under this section only during the SB0227B -29- CSSB 227(RES) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G calendar year immediately following the calendar year in which the excess was paid.
this paragraph does not apply to a municipal utility sales, an unincorporated community, an Indian tribe included in the list published under 25 U.S.C.
5131, or a foreign government;
in this paragraph, "unincorporated community" means a place that is not incorporated as a city and in which 25 or more persons reside as a social unit;
(b) The following are exempt from a sales or use tax levied under AS 43.44.010:
(1) a purchase made with a voucher or other type of certificate issued under 42 U.S.C.
1786 (Special Supplemental Food Program for Women, Infants, and Children) or a food stamp or other food allotment under 7 U.S.C.
2011 – 2036 (Food Stamp Program);
for the purposes of this paragraph, the value of a food stamp allotment paid in the form of a wage subsidy as authorized under AS 47.25.975(b) is not considered to be an allotment issued under 7 U.S.C.
2011 – 2036 (Food Stamp Program);
(2) a sale of a state license or permit;
(3) services among affiliated persons that report their income under 26 U.S.C.
(Internal Revenue Code) on a single consolidated return;
(4) wages, salaries, commission, tips, and any other forms of SB 227 -30- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A remuneration for personal services, if paid by an employer to an employee;
(5) proceeds from investments and other intangible items, including (i) interest on money loaned or deposited;
(ii) dividends or interest from stocks, bonds, or securities;
(iii) proceeds from the sale of stocks, bonds, or securities;
(6) fees for services associated with financial instruments, interests, or deposit accounts;
(7) an isolated or occasional sale of personal property;
(8) personal or household effects owned or possessed by an individual for a period of six months or longer and brought into the state for the establishment of initial permanent residence in the state and the use by a nonresident of property brought into the state for the nonresident's own nonbusiness use while temporarily in the state;
(9) a sale for resale and associated transportation associated with the resale, if the purchaser presents, at the time of sale, an exemption certificate issued under AS 43.44.210;
(10) a transaction between the holders of a joint interest or between the partners in a business partnership;
(11) fuels sold for use in jet propulsion aircraft;
(12) a sale or construction of real property;
however, the sale or transportation of personal property that is later converted to real property is taxable under this chapter unless the conversion is part of the construction of real property or construction of an addition to real property;
(13) the following health care services and related items:
(A) health care services provided by a person licensed or certified to provide those services under AS 08 or by a health care facility as defined in AS 08.68.700(g);
(B) drugs, durable medical equipment, mobility enhancing equipment, and prosthetic devices prescribed by a person licensed to prescribe SB0227A -31- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A those goods under AS 08 or obtained from a health care facility as defined in AS 08.68.700(g);
(14) the transport, handling, storage, drayage, or packing of property, or other related service on property, if the property is transported in interstate or foreign commerce;
(15) the sale of goods or services to a person who uses the goods or services primarily in a trade or business if the cost of the goods or services is (A) deductible by the purchaser under 26 U.S.C.
162 (Internal Revenue Code), as that section read on January 1, 2026;
or (B) depreciable by the purchaser under 26 U.S.C.
167 or 168 (Internal Revenue Code), as that section read on January 1, 2026;
(16) insurance premiums subject to taxation under AS 21;
(17) the sale of personal property where the seller is obligated to make delivery to the purchaser at a point outside the state, or to deliver the property for transportation to the purchaser at a point outside the state;
(18) the rental or lease of real property for a period of 30 consecutive days or more;
and (19) the sale of Internet access.
Article 3.
Seller's Permit;
Exemption Certificate.
43.45.051.
43.44.200.
Report of payments to self-employed individuals.
Seller's permit.
A person required to report a payment to a self-employed individual to the federal government under 26 U.S.C.
(a) A person shall obtain a seller's permit from the department before engaging in business in the state.
shall also report that payment to the department in accordance with regulations adopted by the department.
A remote seller shall obtain a seller's permit not later than 30 days after the remote seller exceeds the gross revenue threshold under AS 43.44.490.
(b) An applicant for a seller's permit shall apply on a form or in a format prescribed by the department stating (1) the name under which the applicant intends to transact business;
(2) every location where the applicant intends to transact business for which the permit is being sought;
and (3) any other information the department requires.
(c) The department shall issue an eligible applicant a numbered seller's permit.
A seller's permit is valid until revoked or suspended and is not assignable.
SB 227 -32- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (d) A seller that makes sales exclusively through a registered marketplace facilitator is not required to register, collect, or remit tax on those sales, and is not subject to bonding or security requirements with respect to those sales.
(e) The name, address, and permit number of a person holding a seller's permit is public information and shall be made available by the department Sec.
43.44.210.
Exemption certificate.
A person selling for resale or a purchaser claiming an exemption for business inputs under AS 43.44.100(b)(15) shall obtain an exemption certificate from the department.
The department shall issue an eligible person an exemption certificate that includes (1) a unique identification number assigned by the department;
(2) the general character of the property or service sold by the seller or used by the purchaser in the regular course of business;
(3) the person's name and principal business address;
and (4) the person's signature or electronic signature.
43.45.061.
43.44.220.
Accounting of tax proceeds.
Revocation or suspension of seller's permit or exemption certificate.
The tax and penalties collected by the department under this chapter shall be deposited into the general fund and accounted for separately.
(a) The department may revoke or suspend a seller's permit or a person's exemption certificate, or both, if the person fails to comply with a provision of this chapter.
(b) A person aggrieved by a revocation or suspension of a seller's permit or exemption certificate under (a) of this section may file an appeal with the department not later than 60 days after revocation or suspension.
The appellant may present to the appeals officer arguments and evidence relevant to the revocation or suspension.
The department shall give written notice of its decision on an appeal.
In its decision, the department may (1) uphold the suspension or revocation;
(2) reinstate a suspended permit or certificate:
or (3) subject to (c) of this section, issue a new permit or certificate.
(c) The department may not issue a new seller's permit or exemption certificate to a person whose permit or certificate has been revoked except on application by the person accompanied by reasonable evidence of the person's intention to comply with this chapter.
The department may, as a condition of issuance SB0227A -33- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A of a new permit or certificate, require security in addition to that authorized under AS 43.44.340 in an amount reasonably necessary to ensure compliance with this chapter.
(d) A person aggrieved by a final decision of the department under this section may appeal the decision to the superior court as provided by law.
43.45.099.
43.44.230.
Improper use of purchase obtained with exemption certificate;
penalty.
A person who intentionally uses an exemption certificate for property that is used for a purpose other than the purpose claimed is subject to a penalty, payable to the department, of $100 or 100 percent of the tax due, whichever is greater, for each transaction in which an improper use of the exemption certificate has occurred.
The penalty is in addition to tax, interest, or other penalties due.
Sec.
43.44.240.
Commingling exemption certificate property.
If a person uses an exemption certificate for the purchase of personal property and commingles that property with property that was not purchased with a exemption certificate but is so similar that the identity of the property in the commingled mass cannot be determined, sales from the mass of commingled property are considered to be sales of the property purchased with the exemption certificate until the quantity of commingled property sold equals the quantity of property originally purchased under the exemption certificate.
Article 4.
Returns;
Security;
Credits and Refunds.
Sec.
43.44.300.
Method of accounting.
A seller shall report and pay the sales and use tax under AS 43.44.010 using the same method of accounting that the person uses for federal tax purposes.
Sec.
43.44.310.
Returns and payment.
A person liable for a tax under AS 43.44.010 shall file a return and pay the tax on a monthly basis, on or before the last day of the month following the month in which the tax obligation is incurred.
A return filed under this section shall be made on a form and in a format prescribed by the department.
Sec.
43.44.320.
Methods.
(a) The department shall adopt regulations providing for the payment of a tax under AS 43.44.010 based on a rounding method.
(b) The department may use sampling principles or methods in conducting a SB 227 -34- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A sales tax or use tax audit.
Sec.
43.44.330.
Timely filing allowance.
(a) A person filing a return under AS 43.44.310 may claim an allowance in the amount of one percent of the tax determined to be payable to the state or $75 a month, whichever is less, if the return is timely filed and the tax is timely paid.
(b) The allowance authorized by this section may be deducted on the return.
The allowance may not be greater than the tax payable to the state.
Sec.
43.44.340.
Security;
sale of security at auction;
bond.
(a) The department may require a seller, including a remote seller, to deposit with the department security in a form and amount determined appropriate by the department, but not more than twice the estimated average liability for the period in which the return is required to be filed or $10,000, whichever is less.
The department may increase or decrease the amount of security required, subject to the limitations of this section.
(b) In addition to remedies under AS 43.10, the department may sell at a public auction property deposited as security to recover a sales tax or use tax amount required to be collected, including interest and penalties.
The department shall give notice of the sale not later than 30 days before a sale and shall serve the person who deposited the security personally or by certified mail to the person's last known address.
After a sale under this subsection, any surplus above the amount due that is not required as security under this section shall be returned to the person who deposited the security.
(c) In lieu of security, the department may require a seller to file a bond issued by a surety company authorized to transact business in the state to guarantee solvency and responsibility.
(d) In addition to the other requirements of this section, the department may require a corporate officer, director, or shareholder of a corporation to provide a personal guarantee and assumption of liability for the payment of a tax due under this chapter.
Sec.
43.44.350.
Taxpayer quitting business;
liability of successor.
(a) All taxes payable under this chapter are due and payable immediately whenever a SB0227A -35- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A taxpayer quits business, sells, exchanges, or otherwise disposes of the business or disposes of the stock of goods.
The taxpayer shall file a return and pay the taxes due not later than 10 days after the taxpayer quits business, sells, exchanges, or otherwise disposes of the business or disposes of the stock of goods.
(b) Except as provided in (c) of this section, a person who becomes a successor in a taxpayer's business or stock of goods is liable for the full amount of the tax due unless the taxpayer pays the amount due.
Payment of the tax by the successor is considered a payment on the sales price and, if the payment is greater in amount than the sales price, the amount of the difference becomes a debt due to the successor from the taxpayer owing the tax under (a) of this section (c) A successor is not liable for a tax due by a person from whom the successor acquired a business or stock of goods if (1) the successor gives written notice to the department of the acquisition;
and (2) an assessment is not issued by the department against the former owner of the business or stock of goods within six months of receipt of the notice from the successor;
if an assessment is issued by the department and a copy is not mailed to the successor, the successor is not liable for the tax due.
Sec.
43.44.360.
Tax as debt.
(a) A tax levied under this chapter and related interest and penalties become a personal debt of the person required to file a return from the time the liability arises, regardless of when the time for payment of the liability occurs.
(b) If a personal representative of an estate has voluntarily distributed the assets held in that capacity without reserving sufficient assets to pay a tax and related interest and penalties under this chapter, the personal representative is personally liable for any deficiency to the extent permitted by AS 13.16.
(c) An officer or employee of a corporation whose duty it is to collect, truthfully account for, and pay to the state a tax levied under this chapter and who fails to pay the tax is liable to the state for the tax and the penalty and interest due on the tax.
This subsection applies to a corporate officer, director, or shareholder required by the department to personally guarantee the payment of a tax for a corporation.
SB 227 -36- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A Sec.
43.44.370.
Deductions for bad debts.
(a) A person filing a return under AS 43.44.310 may deduct sales found to be worthless.
The bad debt may be deducted when (1) the debt is written off as uncollectable in the person's books and records;
and (2) the debt qualifies as a deduction for federal income tax purposes under 26 U.S.C.
(Internal Revenue Code).
(b) If the amount of bad debt exceeds the amount of taxable sales during the period in which the bad debt is written off, a person may file a refund claim with the department.
(c) If a bad debt deducted under (a) of this section is subsequently collected, the person who claimed the deduction shall pay the tax levied under AS 43.44.010 on the amount collected.
Any payments made on a debt or account under this subsection are applied (1) first to the taxable price of the property or service and the tax levied under AS 43.44.010 on the property or service;
and (2) second to interest, service charges, and any other charges.
Sec.
43.44.380.
Tax credit for sales or use tax paid to another state.
A purchaser liable for a sales or use tax under this chapter is entitled to a full credit for the amount of sales or use tax paid on the same personal property or services to another state.
Sec.
43.44.390.
Refunds and credits.
The department may credit or refund overpayments of taxes, taxes erroneously or illegally assessed or collected, penalties collected without authority, and taxes that are found unjustly assessed, excessive in amount, or otherwise wrongfully collected, as established by regulation.
When a refund is allowed to a taxpayer, the refund shall be paid out of the general fund on a warrant issued under a voucher approved by the department.
Article 5.
General Provisions.
Sec.
43.44.400.
Streamlined Sales and Use Tax Agreement.
(a) The department is authorized to enter into the Streamlined Sales and Use Tax Agreement, approved by the Streamlined Sales Tax Governing Board, Inc., or substantially similar SB0227A -37- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A agreement with one or more states.
The department is authorized to act jointly with other states that are members of the Streamlined Sales and Use Tax Agreement, or substantially similar agreement, to establish standards for certification of a certified service provider and certified automated system and to establish performance standards for multistate sellers.
(b) If the department enters into the Streamlined Sales and use Tax Agreement, or substantially similar agreement, the department shall adopt regulations consistent with the agreement.
(c) The department may take all actions reasonably required to implement the provisions set out in this section.
Sec.
43.44.410.
Electronic registration, filing, and forms.
(a) The department may participate in any electronic sales and use tax registration system made available in cooperation with other states through the Streamlined Sales and use Tax Agreement or substantially similar agreement.
(b) The department may use and accept a standard electronic exemption form made available in cooperation with other states through the Streamlined Sales and Use Tax Agreement or substantially similar agreement.
(c) The department may prescribe and provide for the use of forms, certificates, permits, and other documents required under this chapter in electronic format, including the use of electronic signatures and authentications, and for electronic filing.
Sec.
43.44.420.
Field offices.
The department may contract with a municipality or other entity for the purpose of collecting a tax under this chapter for that municipality's geographical area of the state.
Sec.
43.44.430.
Regulations.
The department may adopt regulations under AS 44.62 (Administrative Procedure Act) to implement and administer this chapter.
Sec.
43.44.490.
In this chapter, (1) "employee" has the meaning given in 26 U.S.C.
In this chapter, (1) "consideration" means a valuable inducement and includes money, property, and services;
3401, as that section read on January 1, 2026;
(2) "engaging in business" means carrying on or causing to be carried on an activity with the purpose of direct or indirect benefit;
(2) "employer" has the meaning given in 26 U.S.C.
SB 227 -38- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (3) "isolated or occasional sale" includes fundraising activities conducted by a nonprofit organization that do not exceed 60 consecutive days in duration;
3401, as that section read on January 1, 2026;
(4) "marketplace facilitator" means a person that contracts with sellers to facilitate the sale of the seller's product through a physical or electronic marketplace operated by the person and collects the payment from the purchaser;
(3) "net earnings from self-employment" has the meaning given in 26 U.S.C.
(5) "personal property" means property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses, and (A) includes electricity, water, gas, steam, Internet services, electronic or digital goods, and prewritten computer software;
1402, as that section read on January 1, 2026;
(B) does not include (i) real property;
(4) "wages" has the meaning given in 26 U.S.C.
or (ii) intangible property, such as stocks, bonds, goodwill, trademarks, patents, franchises, or copyrights;
3401, as that section read on January 1, 2026.
(6) "remote seller" means a seller located outside the state who, during the current or immediately preceding calendar year, received gross revenues in excess of $100,000 from sales of goods and services delivered into the state;
(7) "retail sale" means a sale for any purpose other than resale in the regular course of business;
(8) "sale," "selling," or "purchase" means any exchange, barter, rental, lease, license, or transfer of title or possession of property or services for consideration, including the right to use or consume property or services, regardless of whether conditional or otherwise limited;
(9) "sales price" (A) means the total amount of consideration, valued in United States currency, including cash, credit, property, and services, for which personal property or services are sold, whether received in money or otherwise, without deduction of the following:
(i) the seller's cost of the property sold;
(ii) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes SB0227A -39- SB 227 New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A imposed on the seller, and any other expense of the seller;
(iii) charges by the seller for any services necessary to complete the sale;
(iv) delivery charges;
(v) installation charges;
(vi) the value of exempt personal property given to the purchaser where taxable and exempt personal property have been bundled together and sold by the seller as a single product or piece of merchandise;
(B) does not include (i) discounts, including cash, term, or coupons, that are not reimbursed by a third party and that are allowed by a seller and taken by a purchaser on a sale;
(ii) interest, financing, and carrying charges from credit extended on the sale of personal property or services if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser;
or (iii) taxes, fees or other charges legally imposed by a federal, state, or local government directly on the consumer or the seller that are separately stated on the invoice, bill of sale, or similar document given to the purchaser;
(iv) the motor fuel tax levied under AS 43.40 (10) "sale for resale" means the sale of personal property to a purchaser whose principal business is the resale of property, whether in the same or an altered form;
(11) "services" means an activity engaged in for another person for consideration and that is distinguished from the sale of property;
in determining what constitutes a service, the intended use, principal objective, or ultimate objective of the contracting parties is irrelevant;
"services" includes (A) activities performed by a person for its member or shareholders;
SB 227 -40- SB0227A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\A (B) construction activities and all personal property that will become an ingredient or component part of a construction project;
(C) labor;
(D) professional services;
(E) transportation;
(F) telephone or other communications services;
(G) entertainment, including cable, subscription, or pay television or other telecommunications service;
(H) the supplying of food, lodging, or other accommodations in hotels, restaurants, or elsewhere;
(I) admission to exhibitions;
(J) the use of a computer, computer time, a computer system, a computer program, a computer network, or any part of a computer system or network;
(K) the supplying of equipment for use;
and (L) admission to places of entertainment;
(12) "use" or "using" includes use, consumption, or storage, other than storage for resale or for use solely outside the state in the ordinary course of business.
15.
AS 43.55.011(e) is repealed and reenacted to read:
(e) There is levied on the producer of oil or gas a tax for all oil and gas produced each calendar year from each lease or property in the state, less any oil and gas the ownership or right to which is exempt from taxation or constitutes a landowner's royalty interest or for which a tax is levied by AS 43.55.014.
Except as otherwise provided under (j), (k), (o), and (p) of this section, the tax for (1) oil is equal to 17.5 percent of the gross value at the point of production of the taxable oil;
if the gross value at the point of production of oil produced from a lease or property is less than zero, that gross value at the point of production is considered zero for purposes of this paragraph;
(2) gas is equal to 13 percent of the gross value at the point of production of the taxable gas;
if the gross value at the point of production of gas produced from a lease or property is less than zero, that gross value at the point of production is considered zero for purposes of this paragraph.
CSSB 227(RES) -30- SB0227B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2496\G * Sec.
16.
AS 43.55.011(p) is amended to read:
(p) For the seven years immediately following the commencement of commercial production of oil or gas produced from leases or properties in the state that are outside the Cook Inlet sedimentary basin and that do not include land located north of 68 degrees North latitude, where that commercial production began after December 31, 2012, and before January 1, 2027, the levy of tax under (e) of this section for oil and gas is [MAY NOT EXCEED] four percent of the gross value at the point of production.
* Sec.
17.
AS 43.55.014(b) is amended to read:
(b) A production tax levied by this section is equal to 13 percent of the gas otherwise taxable under AS 43.55.011 [AS 43.55.011(e)(3)] produced from each oil and gas lease to which an effective election under (a) of this section applies, when and as that gas is produced.
The producer shall pay the tax in gas by delivering that 13 percent of the gas to the state at the point of production.
* Sec.
18.
AS 43.55.020(a) is repealed and reenacted to read:
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Action History

  1. (S) FINANCE at 09:00 AM SENATE FINANCE 532

  2. (S) Minutes (SFIN)

  3. (S) Heard & Held

  4. (S) FINANCE at 09:00 AM SENATE FINANCE 532

  5. (S) -- Testimony <Invitation Only> -- -- MEETING CANCELED --

  6. (S) FINANCE at 09:00 AM SENATE FINANCE 532

  7. (S) Heard & Held -- Please Note Time Change --

  8. (S) FINANCE at 01:30 PM SENATE FINANCE 532

  9. (S) Heard & Held

  10. (S) FINANCE at 09:00 AM SENATE FINANCE 532

  11. (S) Heard & Held

  12. (S) FINANCE at 09:00 AM SENATE FINANCE 532

  13. (S) REFERRED TO FINANCE

  14. (S) FN2: (REV)

  15. (S) NR: CLAMAN

  16. (S) DNP: MYERS

  17. (S) DP: WIELECHOWSKI

  18. (S) AM: GIESSEL, DUNBAR, RAUSCHER, KAWASAKI

  19. (S) RES RPT CS 4AM 1DP 1DNP 1NR NEW TITLE

  20. (S) Minutes (SRES)

  21. (S) Moved CSSB 227(RES) Out of Committee

  22. (S) RESOURCES at 03:30 PM BUTROVICH 205

  23. (S) Minutes (SRES)

  24. (S) Heard & Held

  25. (S) RESOURCES at 03:30 PM BUTROVICH 205

  26. (S) Heard & Held

  27. (S) RESOURCES at 03:30 PM BUTROVICH 205

  28. (S) RES REFERRAL ADDED BEFORE FIN

  29. (S) GOVERNOR'S TRANSMITTAL LETTER

  30. (S) FN1: (REV)

  31. (S) FIN

  32. (S) READ THE FIRST TIME - REFERRALS

Sponsors

  • Senate Rules · Primary

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 64 not signed on

Sponsors (1)

  • Senate Rules

Co-sponsors (0)

None.

Not signed on (64)

64 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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taxation finance energy
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Frequently asked questions

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SB 227 is sponsored by Senate Rules.
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