27 January 2016

Alaska governor urges adoption of modest personal income tax

In his State of the State address on January 21, 2016, Governor Walker unveiled a New Sustainable Alaska plan that would, of significant note, impose a personal income tax of 6% of an individual's federal income tax. The tax would be effective January 1, 2017. (HB 250.)

The Governor directed lawmakers to act on the plan by the end of the year.

Walker explained that plummeting oil prices and a lack of adequate diversity in the state's economy has resulted in a 90% decline in revenues and a projected depletion in the state's savings within three years.

While the Governor expressed his flexibility in arriving at a sustainable budget with lawmakers, he pointed out that, unlike a sales tax, the proposed personal income tax can be fairly shared both by residents and nonresidents who only work in Alaska.

Alaska is one of nine states that currently do not impose a personal income tax on wages.

A copy of HB 250 is available here.

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Contact Information
For additional information concerning this Alert, please contact:
 
Employment Tax Services Group
Debera Salam(713) 750-1591

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Other Contacts
 
Employment Tax Services Group
Gregory Carver(214) 969-8377
Richard Ferrari(212) 773-5714
Kenneth Hausser(732) 516-4558
Kristie Lowery(704) 331-1884
Christina Peters(614) 232-7112
Debbie Spyker(720) 931-4321

Document ID: 2016-0191