This bill establishes a new income tax on certain entities involved in the production or transportation of oil and gas within Alaska. It introduces a tiered tax structure for "qualified entities," which include sole proprietorships, partnerships, limited liability companies, and certain corporations. The tax rates range from zero for taxable income under $1,000,000 to 9.4% for income exceeding $5,000,000. Additionally, the bill specifies that the taxable income will be calculated as if the qualified entity were a C corporation, and it prohibits the application of federal tax credits or deductions against the state tax liability, with some exceptions. The bill also outlines provisions for aggregating taxable income among entities and requires qualified entities to provide necessary information for tax determination.

Furthermore, the bill ratifies a contract for the sale of royalty oil between the State of Alaska and Marathon Petroleum Supply and Trading Company LLC. It establishes that the new tax will apply to tax years beginning on or after January 1, 2026, and includes a transition period for tax payments due before this date, waiving interest and penalties until January 1, 2027. The bill also allows for the retroactive application of certain regulations and provisions to January 1, 2026, ensuring that the tax framework is effective from that date.

Statutes affected:
HB0194C, AM SCS HB 194(FIN) am S(efd fld S), introduced 03/25/2026, passed Senate 03/25/2026: 43.20.144, U.S.C, 43.20.021, 43.20.036, 43.20.011, 43.20.030, 43.20.031, 38.06.055, 43.20.019, 43.05.225, 43.05.220, 43.05.245, 43.05.290, 44.62.240