Hearings on a new State Income Tax Take Center Stage

Date: March 24, 2017

Petty theft, property seizure, independent contracting, and UI bills also competing for attention

NFIB/Alaska State Director Denny DeWitt reports on the small-business agenda for the legislative week ending March 24.

There is talk about a 90-day session actually happening. We will revisit that assumption on Day 91.

Next week House Bill 115, establishing a personal income tax, will be heard for several days in the House Finance Committee. The measure also deals with the use of the Permanent Fund Earnings Reserve and the dividend.

Public comment will be taken on March 29, between 1 p.m. and 4:30 p.m. from the Legislative Information Offices (LIOs) in Anchorage, Fairbanks and Juneau and OffNet where they don’t have LIOs and from 5:30 p.m. to 8 p.m. for all others.

In a letter of opposition to the co-chairmen of the House Finance Committee, NFIB said “that taking an additional $600,000,000 from the employment sector to support the public sector is short-term solution rather than addressing the size and scope of our state government.”

House Bill 36, by Rep. Les Gara, calling for an income tax on sole proprietors, partnerships, LLCs and S corporations, will have its first hearing on, Saturday, April 1 at 1 p.m. in the House Labor & Commerce Committee. The bill is titled Fair Contribution by High Profit Business Act. 

In a letter of opposition sent to the author, NFIB pointed out that, “Most Alaskan small businesses file federal taxes as individuals, thus adding a state income tax will impact their businesses differently than most individuals. As you probably know, the federal tax code favors big businesses over small businesses. This bill continues that imbalance.”

House Bill 146, by Rep. Matt Claman, would create an income tax with the hope it would be used to fund education. It is scheduled for a hearing in House Education March 27 at 8 a.m.

“We are concerned that the proposed tax will just be a beginning point,” wrote State Director Denny DeWitt in a letter of opposition sent to Representative Claman. “Government has an insatiable appetite for funding. Providing added funding before reducing the size and scope of our government to a level that can be afforded over the long-term simply pushes that reality to future years while charging Alaskans more of their disposable income in the interim.”

Independent Contractors

House Bill 79, which seeks to eliminate as much independent contracting as possible, passed the House Labor & Commerce Committee March 22. NFIB member Chris Nettels testified against the measure. NFIB will work to amend the bill at the Judiciary Committee March 31.

Unemployment Insurance Benefits

House Bill 142, by Rep. Chris Tuck, would increase the level of wages covered by unemployment insurance and increases the benefit. It will be heard in House Labor & Commerce on Wednesday, March 29.

“In the past, there has been restructuring of the program to minimize the potential increase in the tax rate. There are no such changes included in this proposal,” noted NFIB in its letter of opposition “We strongly oppose the Section 2 as it cedes any future increases to a regulatory formula rather than being considered by the legislature.”

Property Forfeiture

A measure NFIB is supporting, House Bill 42, by Rep. Tammie Wilson, will be heard again in the House Judiciary Committee March 27. It would offer protections from property forfeiture when a person has not been convicted of a crime. In last year’s NFIB-member ballot, 77 percent of small-business owners support this concept.

Petty Theft

Another proposal earning NFIB’s backing is Senate Bill 55, by Sen. John Coghill. It would address. It would make important changes to last year’s crime bill by adding jail time for fourth-degree theft. The hope is that this will give law enforcement tools to help stop the petty theft epidemic occurring in many communities. NFIB-member Ron Flint will testify in support of the bill when it comes up in the Senate Finance Committee for two days of hearings.

Previous Reports & Related News Releases

March 17 Report—NFIB Victory: Deceptive Income Tax Proposal Put Aside

March 10 Report—NFIB, State Still Far Apart on Defining Independent Contractors

March 3 Report—NFIB to Fight Alaska bid to Spike UI Wages

February 24 Report—Gas Tax Increase, State Income Tax Bills Still Alive

February 17 Report—NFIB to Testify Against Assault on Independent Contractors

February 10 Report—NFIB Looking at Four Fixes to Omnibus Crime Bill

February 3 Report—Flaw in SB 91: What Penalty for Petty Theft?

January 27 Report—Independent Contractors Once Again in Crosshairs of Alaska Legislature

January 20 Report—Costly Bills Make Return Engagement in Juneau

January 5 News Release—Poll: Alaska Should Not Be in The Retirement Business

[Tile photo of House members courtesy of The Alaska State Legislature website.]

Related Content: Small Business News | Alaska | Taxes

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