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 aimed at promoting film production in Alaska. Under the new sections added to AS 43.98, producers can receive tax credits for qualified production expenditures, which can be sold or transferred. The bill outlines eligibility criteria for productions, specifies the types of expenditures that qualify, and establishes a framework for the application and award of these tax credits. The total amount of tax credits awarded under this program is capped at $20,000,000, and the film production promotion program is tasked with administering the program in cooperation with the Department of Revenue. The bill also includes provisions for compliance and recovery of credits if necessary.

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