(SitNews) Juneau, Alaska - Wednesday,  Senator Bill Wielechowski (D-Anchorage) introduced SB 186 which seeks to close a tax loophole that will arise from the potential BP Alaska, Inc. sale of its Alaska interests to Hilcorp Alaska, LLC, which is currently being reviewed by the Regulatory Commission of Alaska and the Department of Natural Resources. Under Alaska law, the income of publicly held C corporations, as defined by the Internal Revenue Service, is taxed by the state.

While specific tax payments are confidential by state law, it has been estimated BP Alaska contributed approximately $25 to $60 million in recent years to Alaska’s general fund to support the costs of important state services. After taking over BP Alaska’s assets, Hilcorp Alaska, which is a privately owned company originating in Houston, Texas, and controlled by one person, would not be subject to Alaska’s corporate income tax.

“The State has a $2.6 billion deficit this year and massive projected deficits into the future,” said Sen. Wielechowski. “This loophole will cost Alaska tens of millions per year. There is no good public policy reason to keep this loophole and it should be closed.” 

Senate Bill 186, the Petroleum Corporate Tax Loophole Elimination Act, would tax entities that have a qualified taxable income over $4 million per tax year earned from the production or transportation by pipeline of oil or gas in the state. The proposed tax percentage matches the current state tax rate for C corporations.  

Senate Bill 186 has been referred to the Senate Resources and Senate Finance Committees.

Edited By Mary Kauffman, SitNews

Source of News:

Alaska Senate Democrats
www.akleg.gov

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