This bill introduces a tax exemption for qualified small businesses in Alaska, specifically targeting Alaska corporations that meet the active business requirements outlined in federal law. The bill amends AS 43.20.012(a) to include a new exemption for Alaska corporations classified as qualified small businesses, while also establishing a cap on the total amount of tax foregone by the state under this exemption, set at $2,700,000 per calendar year. If this cap is exceeded, the Department of Revenue will allocate the tax exemption based on the order of returns received. Additionally, the bill mandates that the department notify qualifying corporations at least one year before the expiration of their exemption.

Furthermore, the bill creates a transferable film production tax credit program aimed at promoting film production in Alaska. Under AS 43.98.031, producers can receive tax credits for qualified production expenditures, which can be sold or transferred. The program specifies eligibility criteria, including a minimum of $100,000 in qualified expenditures over a 24-month period, and outlines the types of expenditures that qualify. The total amount of tax credits awarded under this program is capped at $20,000,000. The film production promotion program is tasked with administering this tax credit in cooperation with the Department of Revenue, ensuring that the program aligns with state regulations and promotes the growth of the film industry in Alaska.

Statutes affected:
HB0113A, AM HB 113, introduced 02/24/2025: 43.20.012, 16.10.380, 16.10.400, 16.10.450, 16.10.455, 16.12.010, 16.12.080, 16.12.090, U.S.C
HB0113B, AM CSHB 113(L&C), introduced 03/10/2025: 43.20.012, 16.10.380, 16.10.400, 16.10.450, 16.10.455, 16.12.010, 16.12.080, 16.12.090, U.S.C, 43.98.032, 43.98.031, 43.98.036, 43.98.033, 43.98.034, 43.98.038, 44.25.105, 43.98.037, 44.33.231