This bill establishes a new income tax for certain entities in Alaska, specifically targeting "qualified entities" with taxable income exceeding $25,000,000. The tax rate is set at 9.4 percent on the income that surpasses this threshold. A "qualified entity" is defined to include sole proprietorships, partnerships, limited liability companies, and entities that have elected to file federal returns under specific sections of the Internal Revenue Code. The bill also outlines how taxable income should be 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 amends existing tax law to clarify the filing requirements for taxpayers, including partnerships and corporations, and introduces provisions for aggregating taxable income among entities that are part of a unitary business. It allows for certain deductions related to payments made to shareholders or partners of qualified entities, provided specific conditions are met. The bill repeals certain sections of existing law and specifies that it will apply to tax years beginning on or after January 1, 2027, with an immediate effective date upon enactment.

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
HB0350B, AM CSHB 350(L&C), introduced 04/30/2026: 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