A new effort to address Alaska’s budget deficit is gaining momentum, with the Senate passing Alaska corporate income tax reform on Tuesday. Lawmakers voted 16-4 in favor of Senate Bill 113, which seeks to capture revenue from online sales made by out-of-state companies to Alaskans.
The bill states that selling to Alaskans qualifies as a business activity within the state, subjecting those companies to corporate tax. Senator Bill Wielechowski, D-Anchorage, sponsored the legislation and said the reform could generate up to $65 million annually for the state treasury.
Wielechowski explained that current loopholes let companies claim transactions occur in out-of-state warehouses or server farms. This prevents Alaska from taxing the income even if the buyer lives in the state.
He described the legislation as a rare opportunity for the state to gain revenue without burdening residents or businesses. Senator Matt Claman, D-Anchorage, also voiced support, saying Alaska’s tax code must reflect the reality of modern e-commerce.
He noted that many companies profit from Alaska’s market but pay little or no tax under current rules. Four Republicans, including Senator Shelly Hughes, R-Palmer, opposed the move, citing its lack of a broader fiscal plan.
She wants spending limits addressed before approving any new revenue measures. Senate Minority Leader Mike Shower, R-Wasilla, questioned whether companies will absorb the cost. The House Finance Committee will now review SB 113.
If passed and signed by Governor Mike Dunleavy, corporate income tax reform would mark Alaska’s first new revenue-generating law in years. Supporters believe it is a critical step toward long-term fiscal stability without directly impacting residents.
