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“An Act exempting certain small businesses from the corporate income tax; relating to transferable film production tax credits and film production tax credit certificates; relating to the taxes against which a film production tax credit may be applied; transferring the film office to the Department of Revenue and relating to that office; establishing the Alaska Film Incentive Review Commission; establishing a film production promotion program; relating to the amount of credit that may be awarded for compensation to producers, directors, writers, and actors who are not residents; conducting seismic exploration and drilling certain oil or natural gas exploration wells in certain basins; relating to the determination of the production tax value of oil and gas production; providing that the tax rate for new oil or gas production south of 68 degrees North latitude and outside of the Cook Inlet sedimentary basin may not exceed four percent of the gross value at the point of production; providing for an effective date by repealing the effective dates of secs. 3 and 4, ch. 63, SLA 2008; and providing for an effective date.”
Posted: February 27, 2012 : v27-LS1085-B
Bill Version: SCS CSHB 252(RLS)
Status: Withdrawn By Sponsor : 2012-04-15
House Bill 252 seeks to encourage the development of high-growth technology and research companies in Alaska, improve Alaska's business climate, promote the diversification of Alaska's economy, and encourage entrepreneurship and the development of Alaska's venture capital investment sector. It would also enhance Alaskan entrepreneurs' ability to remain in Alaska to start their businesses and raise their families here at home.
House Bill 252 takes advantage of a provision in the federal tax code to promote the development of high-growth tech corporations in Alaska. It does this by exempting from the state corporate income tax small businesses incorporated as C-corporations in Alaska in select industries identified in section 1202 of the Internal Revenue Code.
The federal Small Business Jobs Act of 2010, passed as part of President Barack Obama's economic stimulus initiatives, enhanced incentives under section 1202 for investment in "qualified small businesses", which are small start-up corporations doing business in selected industries and with assets of less than $50 million. The corporations which qualify under section 1202 are typically intellectual property-based research and technology companies, which tend to be highly mobile and have many options regarding where to locate their business.
When compared to other forms of corporations, C-corporations have fewer restrictions on the ownership and transferability of shares, and can more easily secure venture capital funding.
C-corporations in Alaska currently face the fifth highest state corporate income tax rate in the country. Such companies consequently tend to locate elsewhere, even when founded by Alaskan entrepreneurs.
House Bill 252 would remove one of the major obstacles preventing the development of high-growth technology companies in Alaska. The fiscal impact of the exemption created under this bill is expected to be minimal. The positive economic impacts of the bill, however, could be quite significant for the state of Alaska.
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