On Wednesday, the House voted in favor of a new internet-based corporate tax, Senate Bill 113, the creation of Democrat Sen. Bill Wielechowski.
The final vote was 26-14, with Republicans Jeremy Bynum, Mia Costello, Chuck Kopp, Justin Ruffridge, and Will Stapp joining the Democrats to pass it. It had earlier passed the Senate.
SB 113, titled “An Act relating to the Multistate Tax Compact; relating to apportionment of income to the state; relating to highly digitized businesses subject to the Alaska Net Income Tax Act, sponsored by the Senate Rules Committee and presented by Sen. Bill Wielechowski, bill amends Alaska’s corporate income tax code to target out-of-state, highly digitized businesses (e.g., Amazon, Etsy) conducting digital transactions with Alaskan consumers.
SB 113 targets businesses deriving 50% or more of their Alaska sales from intangible property or electronically delivered services (e.g., online retail, digital services). Those businesses, many of them small family enterprises, will pay corporate tax to the State of Alaska. The high rate of Alaska’s corporate tax may drive many businesses to stop doing business in Alaska.
The bill’s rushed process in the House drew criticism from Rep. Sarah Vance for limiting debate and public input, potentially overlooking long-term impacts on Alaskan businesses and consumers. The bill only had 1.5 hours of committee review before the final vote.
All Democrats in the Legislature voted for the tax. The Republicans who opposed the tax didn’t have sufficient time to bring in experts from conservative groups like the Tax Foundation or the Reason Foundation to explain how the Multistage Tax Compact would work in this case, and the tax’s impact on rural Alaskans.
Despite the Multistate Tax Compact goal of avoiding double taxation, its apportionment methods, such as the shift to market-based sourcing that SB 113 is using, can lead to inequities, misaligning tax liabilities with business activities, and creating complexity and burdensome paperwork for small business owners. Businesses worry that uniform rules don’t account for diverse industry practices, leading to unfair tax burdens. Regulations that will be adopted to enact this tax may also end up being unfair to businesses.
For example, Business A that sells in Alaska will now pay corporate income tax that is apportioned to them in ways that might not be accurate. If Business A uses Quickbooks, LegalZoom or another service to help it sort out the confusion, that becomes an extra cost that Business A must bear, and that extra cost will be passed along to the consumer.
Alternately, the thousands of small businesses that provide goods and services using internet-based stores can simply choose to not do business in the high-corporate tax state of Alaska, where the corporate tax is 9.4%, the third highest in the nation.
Etsy has a page dedicated to helping the small business sellers sort out their tax liabilities. You can read it at this link.
Excellent, more taxes. The liberals will be overjoyed.
Veto.
Governor, PLEASE veto.
Do you think the proposed tax would be enough to cover the legislature’s exorbitant salaries, per diem, and travel expenses?
Guess what, all you bush democrats will be paying more for all your on-line purchases while the democrat legislators spend your PFD, you to Anchorage.
Those people are not in Juneau to represent or help Alaskans in any way. They are there to grow government and grub for money. They will literally do anything to increase revenue. I wouldn’t let those clowns manage my grocery bill; I’d end up broke.
You know, I just got Amazon to put a distribution center up here in Alaska and now the Lawbreakers are ruining it. They ruin every good thing we Alaskans accomplish. And they do so because they don’t know how to budget as well as “we, the peons.”
With the vote of passing 113 – they have subsequently killed jobs. I am betting that they close the Amazon warehouse. These money grubbing clowns in Juneau as so narrow minded they cannot see the big picture. More taxes on Alaskans AFTER they keep stealing out PFD.
I urge the Governor to VETO this disaster.
Just another example of how Democrats never reach across the aisle unless they get what they want. Amazing how few Republicans don’t realize that. Do not EVER think they fear Republicans, they do not!
What a bunch of MORONS
We have $81 billion in the fund and these friggin clowns want more and for what. They can’t show a damn thing but failure after failure for the past 20 yrs.
Bynum, Costello, Kopp, Ruffridge, Stapp joining the democrats to pass it… That’s the only thing you need to remember when you read the line “Does not ship to Alaska”.
No matter how much you hate these idiots in Juneau. It’s not enough.
It’s not as much as they seem to hate us.
This know as fact. My vote next election will oppose Rep. Bynum to whom I had voted for. His action on this bill and others reflect RINO attributes.
I am not a RINO voting citizen
VETO!
That tax is on top of anything haz-mat that Carlisle ships through Washington, which they tax.
Bill Wielechowski and his fellow legislators living on the road net work. Bush people, you got the dirty end of the stick again. Higher taxes and minimal PFD!
This only goes badly for rural Alaska. Not much better for everyone else.
Are they trying to destroy this state?
There is a simple solution for smaller goods. When ordering from say Amazon, have it sent to a friend or relative in the lower 48 and have them send it to you. No free shipping but at least you can get it.
I’m an author who lives in Wasilla. All of my books are on Amazon in both digital and paperback. Are they going to tax me as a resident for using Amazon’s platform? Seems that way. What is happening to this state? It’s beginning to look like the one I left in 2009 – Washington.
Okay, I just decided to not open up an online business based in Alaska. I can easily create an LLC in a different state and do business out of there.
F**king morons.
Even better, set up a LLC in Ireland, or some other country that welcomes your business. No reason at all to sell intellectual property in a state that hates you.
The United States hates small business, starting with Trump and all his illegal taxes on imports.
On top of doubling the cost of food, increasing the cost of energy, quintupling the cost of construction, stealing many thousands of dollars in pfds from each of us – now they want to tax, in an area that allows us to maybe save some money. They’re turning us all into Sourdoughs – sour on Alaska government stupid stockyard sludge and not enough dough to leave. I call that slavery, but I don’t know of a better place to live if I could leave. Too many damrats and an overpopulation of rinos.
So, the “tax me more” legislators have taken most all of our PFDs and now want to tax us on what’s left over! Wait till this hits the rural Alaskans who use on-line purchasing most. I guess this is for the kids as it will supposedly be used to pay for the improvement in reading!
Thank you to every one of the Democrat/Rinos who voted for this.
Don’t take this the wrong way just take it but to quote
“A people that elect corrupt politicians, imposters, thieves and traitors are not victims … but accomplices.”
George Orwell
What say you?
All we know about election results and voter turn-out is what we’re told by the same species of imposters, thieves and traitors; voters have no way of observing or verifying any part of their election process.
.
More “victims” than “accomplices”, then?
.
Side note …does it not seem odd that a government seemingly desperate for money would pass an Etsy Tax but not, say, a 50% excise tax on Western Union moneygrams going back to the Old Country?