SB 113 Corporate Income Tax on Digitized Businesses will be on the floor this week in the Senate and has the votes to pass. This bill would institute a 9.4% corporate income tax on out-of-state online businesses that Alaskan consumers use. Since our corporate income tax is the 4th highest in the nation, this is not an insignificant bill.
Although the sponsor hopes the bill will have little to no impact on consumers, there is a risk it will. First of all, have you ever heard of a company that eats a cost rather than passing it onto its consumers? On a temporary basis maybe, but not long term. This bill if passed could result in companies deciding not to do business in Alaska or in an added fee to the consumer (like we already see sometimes for Alaska and Hawaii).
We should not be turning on tax spigots when we don’t have a structure in place (a fix to our too high constitutional spending cap) and a mechanism in place to control annual spending (such as a Sunset Commission – see my SB 107).
Feel free to let legislators know what you think about SB 113. See this handy list of emails you can copy here. It’s a good idea to put the bill number in the subject heading along with your position when you weigh in on legislation.
