This bill amends the Multistate Tax Compact to improve the apportionment of income for businesses operating across multiple states, with a particular emphasis on highly digitized businesses under the Alaska Net Income Tax Act. It introduces new definitions and provisions for "apportionable income," which is income that can be apportioned under the U.S. Constitution and is not allocated under Alaska law. The bill clarifies the treatment of various income types, such as capital gains and royalties, and establishes criteria for determining the location of sales and income allocation based on the taxpayer's commercial domicile. Additionally, it allows taxpayers with limited activities in a state to report and pay taxes using a simplified method if their gross sales do not exceed $100,000, with the Multistate Tax Commission authorized to adjust this threshold every five years.

Furthermore, the bill introduces new provisions for the allocation and apportionment of sales tax, particularly for situations where a taxpayer is not taxable in the state to which a sale is assigned. It removes the previous requirement that income-producing activities must be performed in a greater proportion within the state than in any other state based on costs of performance. The bill establishes the Multistate Tax Commission, which will consist of representatives from each party state and will be responsible for studying tax systems, recommending uniformity proposals, and conducting audits. It also includes provisions for retroactivity to January 1, 2026, and specifies that the new rules will apply to tax years beginning on or after that date, aiming to modernize Alaska's tax framework to better accommodate evolving business models in the digital economy.

Statutes affected:
HB0280A, AM HB 280, introduced 01/23/2026: 43.19.010, 43.20.143, 43.20.144, U.S.C, 43.20.145, 43.20.142, 43.20.148, 43.20.146