Facing what is believed to be a $500 million budget shortfall, the Alaska Senate Rules Committee, led by Democrat Sen. Bill Wielechowski, has introduced two bills aimed at addressing the state’s revenue desires by increasing taxes on businesses and oil. Senate Bill 113 will tax profits on out of state companies that do business in Alaska through the internet. Senate Bill 112 proposes a tax increase on every barrel of oil produced.
The push for revenue was forecasted earlier this week by Sen. Cathy Giessel, who said that without revenue for the state, more Alaskans would commit suicide.
These taxes are in addition to the Yundt Tax that Sen. Rob Yundt of Willow introduced last week to target one company: Hilcorp.
SB 113 changes Alaska’s corporate income tax structure to capture more from the digital economy. Under current tax laws, online sales from out-of-state corporations are not addressed. The proposed legislation adopts a system already in place in at least 36 other states, which taxes businesses based on the customer’s location rather than the business’s physical location.
SB 113 introduces a single sales factor to determine tax liabilities for highly digitized businesses operating in Alaska.
“This legislation will not raise taxes for Alaskans or local businesses,” said Senate Rules Chair Senator Bill Wielechowski, D-Anchorage, without explaining why those companies will not just pass the costs to consumers. “It simply ensures that major out-of-state corporations benefiting from our economy contribute just as local businesses do. This establishes a level playing field for all entities operating in Alaska.”
According to one estimate, this could generate between $25 million and $65 million annually in new state revenue.
SB 112 focuses on reforming Alaska’s sliding-scale per-barrel oil production tax credits. This bill makes major changes that undo the work of Senate Bill 21, which passed in 2013.
Under the SB 21 system, these credits provide major North Slope oil producers with tax discounts based on oil prices. Wielechowski says this costs Alaska billions of dollars.
The proposed reform reduces the credit range from $8–$1 per barrel to $5–$1 per barrel.
But it’s not really a credit. It’s a deduction. Right now, the oil producers can deduct $8 per barrel. Wielechowski wants to claw back most of it. This issue has been litigated and debated for years.
Additionally, SB 112 introduces an investment match requirement, which says tax credits are only granted when they align with qualified capital expenditures that the state approves of.
“For years, the size of the per-barrel credit system has cost the state billions of dollars without delivering tangible benefits,” said Sen. Wielechowski. “This simple change ensures that tax credits are granted with accountability and a clear return for Alaskans while continuing to support investment in our oil fields.”
SB 112 has been referred to the Resources Committee and the Finance Committee for further deliberation, while SB 113 has been directed straight to the Finance Committee, which will speed its passage.
The bill will most certainly impact investment and won’t raise what its proponents predict.
Alaska is in the 11th year of tax stability, which has led to the development of Willow and Pikka, North Slope projects expected to boost oil production by 30% by the year 2032.
With these new revenue bills, Wielechowski likely eliminates himself as a viable candidate for governor in 2026.
Anyone that believes that taxing internet sales levels the field for local businesses…. Really? It’s all about City councils and in this case the State, increasing the revenue for government…
Screw that. It only encourages more piss poor government spending…
Nothing more than hand waving by commie rats trying to soak people who actually work for a living.
Well put John Hancock.
OMG! Suicide Rates in Alaska have been consistently very high compared to most states in the Lower 48.
Offensively, Senator Giessel links Alaska’s long-term, consistent Suicide epidemic to justify taking an axe to the Alaska State Dividend from people across Alaska.
“Sen. Cathy Giessel, who said that without revenue FOR THE STATE, more Alaskans would commit suicide.”
Her position is out-of-touch. Here’s why:
1. The State of Alaska, regardless of levels or revenue, has little impact on the poorest citizens of Alaska where many suicides take place.
Why? Putting money in the pocket of the State Government does not mean the State Government will spend that money on the poorest areas of Alaska where most suicides take place.
2. Senator Giessel lives in South Anchorage, arguably, the most affluent area in Alaska. She can sound off about suicide for media attention to promote her “revenue-capturing” agenda.
But on the flip side, if she gets her way by axing the Permanent Fund Dividend to All Alaskans, then what? How does taking away the permanent fund directly affect lowering the amount of suicide deaths in Alaska?
The Permanent Fund is the only investment for individual citizens with no strings attached, to fund their family equipment costs, supply expenses, or whatever they need.
She wants that money; she wants to take that money away and put it in her back pocket to make her affluent community positioned to get their pet projects funded. A community of citizens that are less likely to need a dividend.
And the audacity to say that if the State of Alaska does not get more revenue, more Alaskans will die of suicide.
The data says differently. It does not matter how much money the State of Alaska has, ever had, or will get.
The State of Alaska as a government has not ever positively impacted the rate of suicide for the citizens of Alaska.
People – from all walks of life – are hopeful. Until they are not.
The State of Alaska should be investing in building opportunities – a Pursuit of Happiness.
Alaska has a land mass of 1/5 of the Lower 48. The State of Alaska Website, citation below, demonstrates the silo-compartmentalized planning within the state departments…as well as the lack of collaboration among all the major landowners of Alaska for a joint strategic plan.
(‘https://www.commerce.alaska.gov/web/dcra/PlanningLandManagement/PlanningAlaska.aspx)
“Who’s Planning Alaska
Approximately 65% of Alaska is owned and managed by the U.S. federal government as public lands, including a multitude of national forests, national parks, and national wildlife refuges. Of the remaining land area, the State of Alaska owns 24.5%; another 10% is owned by 13 regional and dozens of local Native corporations created under the Alaska Native Claims Settlement Act (1971).
Various private interests own the remaining land, totaling less than one percent.
Due to the various managers of Alaska’s land and coastline, this website intends to help users figure out who’s planning Alaska.”
Get outside the 1%. Look further. Dream bigger, Do better.
I think the state should start charging $50 a head each way on every bush village flight. It’d do a lot to cut down on the bottomless pit of government spending
T.E.A.
This proposal is simply designed to reduce or eliminate more drilling. “With these new revenue bills, Wielechowski likely eliminates himself as a viable candidate for governor in 2026.” Hopefully. Hopefully Giessel paints herself with the same tarnish. And hopefully, someone will actually have the courage to reduce spending.
These Union Party people are a bunch of Economic Psychopaths. Always wanting more of OUR MONEY to spend, and never cutting back. Destroying the Alaskan economy every year they return to Junaeu . Please Anchorage and Rural Voters look in the mirror and say to your Reflection—-I voted for this. Mike Shower for Governor. He has the Courage that Donleavy never had.
Taxation is theft!
No, taxation in the traditional sense, is citizen providing government with the ability to fulfill its constitutional duties (common defense, infrastructure, law enforcement etc.).
However in this context, yes more taxation demands from our legislative robber barons could be considered excessive involuntary taking, as it most likely will support the excesses of an unaccountable education industry and enhanced benefits to the state work force, instead of fostering better and more appropriate budgeting/cost cutting.
The Kalifornication of Alaska continues… It’s your own Home Growniez that are bankrupting you… Gavin Newsom isn’t around to blame although it’s the same playbook… ^^^
Couldn’t agree more! That Don “Cali” Young bloated us with pork rinds for decades! Lets keep the Cali outta Aly(eska)!
A possible cure: introduce a new bill that extracts double the tax proposed from each legislator or governor voting in favor of the tax.
All, I can say WOW for all those who “live” out of Amazon..Another strike for a good access to many for shoppers up here. Remember this is just a shipping extension for Amazon.
I’m not sure where you’re going with that, but I got pretty tired of driving around town looking for items that the local stores don’t carry. It’s much more time-and-cost effective for me to buy items from Amazon, in many cases.
The state of Alaska has elected officials that have zero business knowledge blowing through billions of dollars, with no positive result for the future of the state or the people living here, while the cities attempt to tax the working people into poverty in order to sustain the downward trajectory of our working population. Screwing the businesses, which are the engine to our economy, in order to grow government is just plain stupid.
Sigh!
Bill Wielechowski is a one trick pony. His solution to EVERYTHING is “tax it”.
These are a short-sighted proposal aimed at getting money now, but over the long haul stifle industry and development in this state. In my opinion a losing strategy. Why not spur more production and a diversified tax base attracting other sectors of industry to the state, which will increase the revenue?
If he thinks that outside companies will not pass on the tax to the consumer, I have a bridge to sell him (preferably the one to the Ketchikan airport).
The other suggestion senator would be to look at the budget and prioritize and spend more judiciously within the state’s means. You are allegedly $500 million in the hole, reform education to a results oriented reimbursement model and adjust the BSA accordingly and don’t pass legislation like the DB retirement plan that will guarantee to bankrupt the state.
It’s only a surprise if you weren’t paying attention
Wielechowski never saw a dollar he didn’t want to steal to give to his pet causes
Some of us can recall the time before our internet purchases were taxed. Greedy state and local governments wanted to cash in and take money they never deserved. So this digital tax, whatever the hell it is, deserves to die a quick death.
Where the Senators have gotten it right is their understanding that an income tax on Alaskans is wrong as long as we give away over $1 billion in welfare to Big Oil, annually.
We’ve already lost over $10 billion dollars($60,000.00 for a household of four people) to lower dividends because of this corporate welfare. The little guy has been badly hurt, and our declining population is evidence of this.
Which is it? Americans (not foreign biz) WILL pay for Trump’s tariffs or Alaskans (not out of state biz) WON’T pay for Weilekowski’s internet tax? Pretty sure they are almost exactly the same thing? And yet somehow I keep hearing about how Americans won’t pay for tariffs, but now you’re saying that internet biz will just pass the costs on to Alaskan consumers… So confusing.
That stupidity will offset any possible federal good will in Alaska for resource exploration and production.
Instead of beating the bushes for new taxes, why don’t our legislators beat the bushes for corruption, fraud and mismanagement? Take an example from DOGE!
Because they’re the same grifters that are benefitting from corruption, fraud, and mismanagement…
Senator Wielechowski should look at the Return On Investment from our state’s K12 education system. What do we really get for all the money spent on this monopoly?
It doesn’t matter to Wielechowski what “we” get. It’s what He gets. I.E campaign funding and more power to feed his megalomania
Here is my suggestion for Senator W. and his cohorts.
Make EVERY entity/department declare and return to the common pot, any funds not used at the end of the fiscal year. Audit receipts. Eliminate “slush funds” or accounts were certain departments stash cash. Have the reverse sweep be an actual reverse sweep. Chances are you will find that $500 million stashed away in the proverbial government couch cushions and probably then some!
DOGE!
Comments are closed.