The Valley Republican Women of Alaska, one of the major Republican organizations in the state, have issued a resolution strongly opposing Senate Bill 92, introduced by Sen. Rob Yundt, which proposes a 9.4% income tax on entities producing or transporting oil and gas in the state with taxable income exceeding $5 million. The bill targets Hilcorp.
Already, one of the two House district’s in Yundt’s Senate district has passed a similar resolution. District 28’s resolution passed last month, not long after the senator surprised the Legislature by his heretofore secretive bill.
VRWAK argues that the bill’s provisions fail to account for the significant and harmful impact it will have on businesses across Alaska, particularly small and mid-sized enterprises already facing immense challenges in today’s economic climate.
The group contend that the bill places businesses at risk of increased operational costs, stifled growth, and potential closures, thereby threatening the livelihood of hard-working entrepreneurs.
During a recent Senate Resources Committee hearing, industry representatives echoed these concerns. Kara Moriarty, president of the Alaska Oil and Gas Association, criticized the bill as a discriminatory and retroactive tax. She noted that out of approximately 11,000 S corporations filing taxes in Alaska, the legislation appears aimed at one or two individual companies within that category. Moriarty also emphasized that such retroactive taxation undermines business confidence and the investment climate.
Sen. Yundt, the bill’s sponsor, has stated that the tax is intended to generate revenue for energy and electrical grid projects, addressing critical infrastructure needs as Alaska grapples with aging systems and fluctuating energy demands. But by law, revenues to the state cannot be designated for any one purpose. Revenues go into the general fund.
VRWAK’s resolution calls for an immediate reevaluation of Senate Bill 92, urging lawmakers to consider the potential consequences for the business community before further progress is made. They stress the importance of fostering a supportive environment for businesses to thrive, warning that proceeding without adjustments could lead to job losses, diminished economic activity, and long-term harm to Alaska’s economic health.
The Yundt Tax is among other taxes proposed by Senate Democrats this year, including both oil companies and those that are based out of state but do business in state.