This bill establishes a new income tax for "qualified entities" in Alaska that have taxable income exceeding $25,000,000 in a tax year. The tax rate is set at 9.4 percent on the income over that threshold. A "qualified entity" is defined to include sole proprietorships, partnerships, limited liability companies, and certain entities that file federal returns under specific sections of the Internal Revenue Code. The bill also outlines how taxable income is calculated, stipulating that it should be treated as if the entity were a C corporation, and it restricts the application of federal tax credits or deductions against state tax liability.

Additionally, the bill includes provisions for the aggregation of taxable income among entities that are part of a unitary business and allows for certain deductions related to payments made to shareholders or partners of qualified entities. It repeals some existing laws and establishes that the new tax will apply to tax years beginning on or after January 1, 2026. The bill also includes a transition period for tax payments due before the effective date and allows for retroactive application of regulations related to the new tax. The act is set to take effect immediately upon passage.

Statutes affected:
HB0350A, AM HB 350, introduced 02/23/2026: 43.20.144, U.S.C, 43.20.021, 43.20.036, 43.20.011, 43.20.030, 43.20.031, 43.20.019, 43.05.085, 43.20.012, 43.20.013, 43.05.225, 43.05.220, 43.05.245, 43.05.290, 44.62.240