Alaska 2025-2026 Regular Session

Alaska Senate Bill SB113 Compare Versions

Only one version of the bill is available at this time.

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2	2	SB0113A -1- SB 113
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11	11	SENATE BILL NO. 113
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13	13	IN THE LEGISLATURE OF THE STATE OF ALASKA
14	14
15	15	THIRTY-FOURTH LEGISLATURE - FIRST SESSION
16	16
17	17	BY THE SENATE RULES COMMITTEE
18	18
19	19	Introduced: 2/26/25
20	20	Referred: Finance
21	21
22	22
23	23	A BILL
24	24
25	25	FOR AN ACT ENTITLED
26	26
27	27	"An Act relating to the Multistate Tax Compact; relating to apportionment of income to 1
28	28	the state; relating to highly digitized businesses subject to the Alaska Net Income Tax 2
29	29	Act; and providing for an effective date." 3
30	30	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
31	31	* Section 1. AS 43.19.010 is amended to read: 5
32	32	Sec. 43.19.010. Compact. The Multistate Tax Compact is hereby enacted into 6
33	33	law and entered into with all jurisdictions legally joining in it, in the form substantially 7
34	34	as follows: 8
35	35	ARTICLE I. 9
36	36	PURPOSES. 10
37	37	The purposes of this compact are to: 11
38	38	1. Facilitate proper determination of state and local tax liability of multistate 12
39	39	taxpayers, including the equitable apportionment of tax bases and settlement of 13
40	40	apportionment disputes. 14 34-LS0564\A
41	41	SB 113 -2- SB0113A
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44	44	2. Promote uniformity or compatibility in significant components of tax 1
45	45	systems. 2
46	46	3. Facilitate taxpayer convenience and compliance in the filing of tax returns 3
47	47	and in other phases of tax administration. 4
48	48	4. Avoid duplicative taxation. 5
49	49	ARTICLE II. 6
50	50	DEFINITIONS. 7
51	51	As used in this compact: 8
52	52	1. "State" means a state of the United States, the District of Columbia, the 9
53	53	Commonwealth of Puerto Rico, or any territory or possession of the United States. 10
54	54	2. "Subdivision" means any governmental unit or special district of a state. 11
55	55	3. "Taxpayer" means any corporation, partnership, firm, association, 12
56	56	governmental unit or agency or person acting as a business entity in more than one 13
57	57	state. 14
58	58	4. "Income tax" means a tax imposed on or measured by net income including 15
59	59	any tax imposed on or measured by an amount arrived at by deducting expenses from 16
60	60	gross income, one or more forms of which expenses are not specifically and directly 17
61	61	related to particular transactions. 18
62	62	5. "Capital stock tax" means a tax measured in any way by the capital of a 19
63	63	corporation considered in its entirety. 20
64	64	6. "Gross receipts tax" means a tax, other than a sales tax, which is imposed on 21
65	65	or measured by the gross volume of business, in terms of gross receipts or in other 22
66	66	terms, and in the determination of which no deduction is allowed which would 23
67	67	constitute the tax an income tax. 24
68	68	7. "Sales tax" means a tax imposed with respect to the transfer for a 25
69	69	consideration of ownership, possession or custody of tangible personal property or the 26
70	70	rendering of services measured by the price of the tangible personal property 27
71	71	transferred or services rendered and which is required by state or local law to be 28
72	72	separately stated from the sales price by the seller, or which is customarily separately 29
73	73	stated from the sales price, but does not include a tax imposed exclusively on the sale 30
74	74	of a specifically identified commodity or article or class of commodities or articles. 31 34-LS0564\A
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78	78	8. "Use tax" means a nonrecurring tax, other than a sales tax, which (a) is 1
79	79	imposed on or with respect to the exercise or enjoyment of any right or power over 2
80	80	tangible personal property incident to the ownership, possession or custody of that 3
81	81	property or the leasing of that property from another including any consumption, 4
82	82	keeping, retention, or other use of tangible personal property and (b) is complementary 5
83	83	to a sales tax. 6
84	84	9. "Tax" means an income tax, capital stock tax, gross receipts tax, sales tax, 7
85	85	use tax, and any other tax which has a multistate impact, except that the provisions of 8
86	86	Articles III, IV and V of this compact shall apply only to the taxes specifically 9
87	87	designated therein and the provisions of Article IX of this compact shall apply only in 10
88	88	respect to determinations pursuant to Article IV. 11
89	89	ARTICLE III. 12
90	90	ELEMENTS OF INCOME TAX LAWS. 13
91	91	TAXPAYERS OPTION, STATE AND LOCAL TAXES. 14
92	92	1. Any taxpayer subject to an income tax whose income is subject to 15
93	93	apportionment and allocation for tax purposes pursuant to the laws of a party state or 16
94	94	pursuant to the laws of subdivisions in two or more party states may elect to apportion 17
95	95	and allocate the taxpayer's income in the manner provided by the laws of such state or 18
96	96	by the laws of such states and subdivisions without reference to this compact, or may 19
97	97	elect to apportion and allocate in accordance with Article IV. This election for any tax 20
98	98	year may be made in all party states or subdivisions thereof or in any one or more of 21
99	99	the party states or subdivisions thereof without reference to the election made in the 22
100	100	others. For the purposes of this paragraph, taxes imposed by subdivisions shall be 23
101	101	considered separately from state taxes and the apportionment and allocation also may 24
102	102	be applied to the entire tax base. In no instance wherein Article IV is employed for all 25
103	103	subdivisions of a state may the sum of all apportionments and allocations to 26
104	104	subdivisions within a state be greater than the apportionment and allocation that would 27
105	105	be assignable to that state if the apportionment or allocation were being made with 28
106	106	respect to a state income tax. 29
107	107	TAXPAYER OPTION, SHORT FORM. 30
108	108	2. Each party state or any subdivision thereof which imposes an income tax 31 34-LS0564\A
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112	112	shall provide by law that any taxpayer required to file a return, whose only activities 1
113	113	within the taxing jurisdiction consist of sales and do not include owning or renting real 2
114	114	estate or tangible personal property, and whose dollar volume of gross sales made 3
115	115	during the tax year within the state or subdivision, as the case may be, is not in excess 4
116	116	of $100,000 may elect to report and pay any tax due on the basis of a percentage of 5
117	117	such volume, and shall adopt rates which shall produce a tax which reasonably 6
118	118	approximates the tax otherwise due. The Multistate Tax Commission, not more than 7
119	119	once in five years, may adjust the $100,000 figure in order to reflect such changes as 8
120	120	may occur in the real value of the dollar, and such adjusted figure, upon adoption by 9
121	121	the commission, shall replace the $100,000 figure specifically provided herein. Each 10
122	122	party state and subdivision thereof may make the same election available to taxpayers 11
123	123	additional to those specified in this paragraph. 12
124	124	COVERAGE. 13
125	125	3. Nothing in this Article relates to the reporting or payment of any tax other 14
126	126	than an income tax. 15
127	127	ARTICLE IV. 16
128	128	DIVISION OF INCOME. 17
129	129	1. As used in this Article, unless the context otherwise requires: 18
130	130	(a) "Apportionable income" means: 19
131	131	(i) all income that is apportionable under the Constitution of the 20
132	132	United States and is not allocated under the laws of this state, including: 21
133	133	(A) ["BUSINESS INCOME" MEANS] income arising from 22
134	134	transactions and activity in the regular course of the taxpayer's trade or 23
135	135	business; and 24
136	136	(B) [INCLUDES] income arising from tangible and intangible 25
137	137	property if the acquisition, management, employment, development, or 26
138	138	[AND] disposition of the property is or was related to the operation 27
139	139	[CONSTITUTE INTEGRAL PARTS] of the taxpayer's [REGULAR] trade or 28
140	140	business; and 29
141	141	(ii) any income that would be allocable to this state under the 30
142	142	Constitution of the United States, but that is apportioned rather than allocated 31 34-LS0564\A
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146	146	pursuant to the laws of this state [OPERATIONS]. 1
147	147	(b) "Commercial domicile" means the principal place from which the trade or 2
148	148	business of the taxpayer is directed or managed. 3
149	149	(c) "Compensation" means wages, salaries, commissions and any other form 4
150	150	of remuneration paid to employees for personal services. 5
151	151	(d) "Financial organization" means any bank, trust company, savings bank, 6
152	152	industrial bank, land bank, safe deposit company, private banker, savings and loan 7
153	153	association, credit union, cooperative bank, small loan company, sales finance 8
154	154	company, investment company, or any type of insurance company. 9
155	155	(e) "Non-apportionable [NONBUSINESS] income" means all income other 10
156	156	than apportionable [BUSINESS] income. 11
157	157	(f) "Public utility" means any business entity (1) which owns or operates any 12
158	158	plant, equipment, property, franchise, or license for the transmission of 13
159	159	communications, transportation of goods or persons, except by pipe line, or the 14
160	160	production, transmission, sale, delivery, or furnishing of electricity, water or steam; 15
161	161	and (2) whose rates of charges for goods or services have been established or 16
162	162	approved by a federal, state or local government or governmental agency. 17
163	163	(g) "sales" means all gross receipts of the taxpayer that are not allocated 18
164	164	under paragraphs of this Article, and that are received from transactions and 19
165	165	activity in the regular course of the taxpayer's trade or business; except that sales 20
166	166	of a taxpayer from hedging transactions and from the maturity, redemption, 21
167	167	exchange, loan, or other disposition of cash or securities, shall be excluded. 22
168	168	(h) "State" means any state of the United States, the District of Columbia, the 23
169	169	Commonwealth of Puerto Rico, any territory or possession of the United States, and 24
170	170	any foreign country or political subdivision thereof. 25
171	171	(i) "This state" means the state in which the relevant tax return is filed or, in 26
172	172	the case of application of this Article to the apportionment and allocation of income 27
173	173	for local tax purposes, the subdivision or local taxing district in which the relevant tax 28
174	174	return is filed. 29
175	175	2. Any taxpayer having income from business activity which is taxable both 30
176	176	within and outside this state, other than activity as a financial organization or public 31 34-LS0564\A
177	177	SB 113 -6- SB0113A
178	178	New Text Underlined [DELETED TEXT BRACKETED]
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180	180	utility or the rendering of purely personal services by an individual, shall allocate and 1
181	181	apportion net income as provided in this Article. If a taxpayer has income from 2
182	182	business activity as a public utility but derives the greater percentage of income from 3
183	183	activities subject to this Article, the taxpayer may elect to allocate and apportion the 4
184	184	taxpayer's entire net income as provided in this Article. 5
185	185	3. For purposes of allocation and apportionment of income under this Article, a 6
186	186	taxpayer is taxable in another state if (1) in that state the taxpayer is subject to a net 7
187	187	income tax, a franchise tax measured by net income, a franchise tax for the privilege 8
188	188	of doing business, or a corporate stock tax, or (2) that state has jurisdiction to subject 9
189	189	the taxpayer to a net income tax regardless of whether, in fact, the state does or does 10
190	190	not. 11
191	191	4. Rents and royalties from real or tangible personal property, capital gains, 12
192	192	interest, dividends or patent or copyright royalties, to the extent that they constitute 13
193	193	nonapportionable [NONBUSINESS] income, shall be allocated as provided in 14
194	194	paragraphs 5 through 8 of this Article. 15
195	195	5.(a) Net rents and royalties from real property located in this state are 16
196	196	allocable to this state. 17
197	197	(b) Net rents and royalties from tangible personal property are allocable to this 18
198	198	state: (1) if and to the extent that the property is utilized in this state, or (2) in their 19
199	199	entirety if the taxpayer's commercial domicile is in this state and the taxpayer is not 20
200	200	organized under the laws of or taxable in the state in which the property is utilized. 21
201	201	(c) The extent of utilization of tangible personal property in a state is 22
202	202	determined by multiplying the rents and royalties by a fraction, the numerator of 23
203	203	which is the number of days of physical location of the property in the state during the 24
204	204	rental or royalty period in the taxable year and the denominator of which is the number 25
205	205	of days of physical location of the property everywhere during all rental or royalty 26
206	206	periods in the taxable year. If the physical location of the property during the rental or 27
207	207	royalty period is unknown or unascertainable by the taxpayer, tangible personal 28
208	208	property is utilized in the state in which the property was located at the time the rental 29
209	209	or royalty payer obtained possession. 30
210	210	6.(a) Capital gains and losses from sales of real property located in this state 31 34-LS0564\A
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214	214	are allocable to this state. 1
215	215	(b) Capital gains and losses from sales of tangible personal property are 2
216	216	allocable to this state if (1) the property had a situs in this state at the time of the sale, 3
217	217	or (2) the taxpayer's commercial domicile is in this state and the taxpayer is not 4
218	218	taxable in the state in which the property had a situs. 5
219	219	(c) Capital gains and losses from sales of intangible personal property are 6
220	220	allocable to this state if the taxpayer's commercial domicile is in this state. 7
221	221	7. Interest and dividends are allocable to this state if the taxpayer's commercial 8
222	222	domicile is in this state. 9
223	223	8.(a) Patent and copyright royalties are allocable to this state: (1) if and to the 10
224	224	extent that the patent or copyright is utilized by the payer in this state, or (2) if and to 11
225	225	the extent that the patent or copyright is utilized by the payer in a state in which the 12
226	226	taxpayer is not taxable and the taxpayer's commercial domicile is in this state. 13
227	227	(b) A patent is utilized in a state to the extent that it is employed in production, 14
228	228	fabrication, manufacturing, or other processing in the state or to the extent that a 15
229	229	patented product is produced in the state. If the basis of receipts from patent royalties 16
230	230	does not permit allocation to states or if the accounting procedures do not reflect states 17
231	231	of utilization, the patent is utilized in the state in which the taxpayer's commercial 18
232	232	domicile is located. 19
233	233	(c) A copyright is utilized in a state to the extent that printing or other 20
234	234	publication originates in the state. If the basis of receipts from copyright royalties does 21
235	235	not permit allocation to states or if the accounting procedures do not reflect states of 22
236	236	utilization, the copyright is utilized in the state in which the taxpayer's commercial 23
237	237	domicile is located. 24
238	238	9. All apportionable [BUSINESS] income shall be apportioned to this state by 25
239	239	multiplying the income by a fraction, the numerator of which is the property factor 26
240	240	plus the payroll factor plus the sales factor, and the denominator of which is three. 27
241	241	10. The property factor is a fraction, the numerator of which is the average 28
242	242	value of the taxpayer's real and tangible personal property owned or rented and used in 29
243	243	this state during the tax period and the denominator of which is the average value of 30
244	244	all the taxpayer's real and tangible personal property owned or rented and used during 31 34-LS0564\A
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248	248	the tax period. 1
249	249	11. Property owned by the taxpayer is valued at its original cost. Property 2
250	250	rented by the taxpayer is valued at eight times the net annual rental rate. Net annual 3
251	251	rental rate is the annual rental rate paid by the taxpayer less any annual rental rate 4
252	252	received by the taxpayer from subrentals. 5
253	253	12. The average value of property shall be determined by averaging the values 6
254	254	at the beginning and ending of the tax period but the tax administrator may require the 7
255	255	averaging of monthly values during the tax period if reasonably required to reflect 8
256	256	properly the average value of the taxpayer's property. 9
257	257	13. The payroll factor is a fraction, the numerator of which is the total amount 10
258	258	paid in this state during the tax period by the taxpayer for compensation and the 11
259	259	denominator of which is the total compensation paid everywhere during the tax period. 12
260	260	14. Compensation is paid in this state if: 13
261	261	(a) the individual's service is performed entirely within the state; 14
262	262	(b) the individual's service is performed both inside and outside the state, but 15
263	263	the service performed outside the state is incidental to the individual's service within 16
264	264	this state; or 17
265	265	(c) some of the service is performed in the state and (1) the base of operations 18
266	266	or, if there is no base of operations, the place from which the service is directed or 19
267	267	controlled is in the state, or (2) the base of operations or the place from which the 20
268	268	service is directed or controlled is not in any state in which some part of the service is 21
269	269	performed, but the individual's residence is in this state. 22
270	270	15. The sales factor is a fraction, the numerator of which is the total sales of 23
271	271	the taxpayer in this state during the tax period, and the denominator of which is the 24
272	272	total sales of the taxpayer everywhere during the tax period. 25
273	273	16. Sales of tangible personal property are in this state if: 26
274	274	(a) the property is delivered or shipped to a purchaser, other than the United 27
275	275	States Government, within this state regardless of the f.o.b. point or other conditions 28
276	276	of the sale; or 29
277	277	(b) the property is shipped from an office, store, warehouse, factory, or other 30
278	278	place of storage in this state and (1) the purchaser is the United States Government or 31 34-LS0564\A
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282	282	(2) the taxpayer is not taxable in the state of the purchaser. 1
283	283	17.(a) Sales, other than sales described in Section 16 [OF TANGIBLE 2
284	284	PERSONAL PROPERTY], are in this state if the taxpayer's market for the sales is 3
285	285	in this state. The taxpayer's market for sales is in this state: 4
286	286	(1) in the case of sale, rental, lease, or license of real property, if 5
287	287	and to the extent the property is located in this state; 6
288	288	(2) in the case of rental, lease, or license of tangible personal 7
289	289	property, if and to the extent the property is located in this state; 8
290	290	(3) in the case of sale of a service, if and to the extent the service is 9
291	291	delivered to a location in this state; and 10
292	292	(4) in the case of intangible property, 11
293	293	(i) that is rented, leased, or licensed, if and to the extent the 12
294	294	property is used in this state, provided that intangible property utilized in 13
295	295	marketing a good or service to a consumer is "used in this state" if that 14
296	296	good or service is purchased by a consumer who is in this state; and 15
297	297	(ii) that is sold, if and to the extent the property is used in 16
298	298	this state, provided that: 17
299	299	(A) a contract right, government license, or similar 18
300	300	intangible property that authorizes the holder to conduct a 19
301	301	business activity in a specific geographic area is "used in this state" 20
302	302	if the geographic area includes all or part of this state; 21
303	303	(B) sales from intangible property sales that are 22
304	304	contingent on the productivity, use, or disposition of the intangible 23
305	305	property shall be treated as a sale of the rental, lease, or licensing 24
306	306	of such intangible property under subsection (a)(4)(i); and 25
307	307	(C) all other sales of intangible property shall be 26
308	308	excluded from the numerator and denominator of the sales factor. 27
309	309	[: (a) THE INCOME-PRODUCING ACTIVITY IS PERFORMED IN 28
310	310	THIS STATE; OR] 29
311	311	(b) If the state or states of assignment under subsection (a) cannot be 30
312	312	determined, the state or states of assignment shall be reasonably approximated. 31 34-LS0564\A
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316	316	(c) If the taxpayer is not taxable in a state to which a sale is assigned 1
317	317	under subsection (a) or (b), or if the state of assignment cannot be determined 2
318	318	under subsection (a) or reasonably approximated under subsection (b), such a 3
319	319	sale shall be excluded from the denominator of the sales factor. 4
320	320	(d) The tax administrator may adopt regulations as necessary or 5
321	321	appropriate to carry out the purposes of this section [THE INCOME-6
322	322	PRODUCING ACTIVITY IS PERFORMED BOTH IN AND OUTSIDE THIS 7
323	323	STATE AND A GREATER PROPORTION OF THE INCOME-PRODUCING 8
324	324	ACTIVITY IS PERFORMED IN THIS STATE THAN IN ANY OTHER STATE, 9
325	325	BASED ON COSTS OF PERFORMANCE]. 10
326	326	18. If the allocation and apportionment provisions of this Article do not fairly 11
327	327	represent the extent of the taxpayer's business activity in this state, the taxpayer may 12
328	328	petition for or the tax administrator may require, in respect to all or any part of the 13
329	329	taxpayer's business activity, if reasonable: 14
330	330	(a) separate accounting; 15
331	331	(b) the exclusion of any one or more of the factors; 16
332	332	(c) the inclusion of one or more additional factors which will fairly represent 17
333	333	the taxpayer's business activity in this state; or 18
334	334	(d) the employment of any other method to effectuate an equitable allocation 19
335	335	and apportionment of the taxpayer's income. 20
336	336	ARTICLE V. 21
337	337	ELEMENTS OF SALES AND USE TAX LAWS. 22
338	338	TAX CREDIT. 23
339	339	1. Each purchaser liable for a use tax on tangible personal property shall be 24
340	340	entitled to full credit for the combined amount or amounts of legally imposed sales or 25
341	341	use taxes paid by the purchaser with respect to the same property to another state and 26
342	342	any subdivision thereof. The credit shall be applied first against the amount of any use 27
343	343	tax due the state, and any unused portion of the credit shall then be applied against the 28
344	344	amount of any use tax due a subdivision. 29
345	345	EXEMPTION CERTIFICATES, VENDORS MAY RELY. 30
346	346	2. Whenever a vendor receives and accepts in good faith from a purchaser a 31 34-LS0564\A
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350	350	resale or other exemption certificate or other written evidence of exemption authorized 1
351	351	by the appropriate state or subdivision taxing authority, the vendor shall be relieved of 2
352	352	liability for a sales or use tax with respect to the transaction. 3
353	353	ARTICLE VI. 4
354	354	THE COMMISSION. 5
355	355	ORGANIZATION AND MANAGEMENT. 6
356	356	1.(a) The Multistate Tax Commission is hereby established. It shall be 7
357	357	composed of one "member" from each party state who shall be the head of the state 8
358	358	agency charged with the administration of the types of taxes to which this compact 9
359	359	applies. If there is more than one such agency the state shall provide by law for the 10
360	360	selection of the commission member from the heads of the relevant agencies. State 11
361	361	law may provide that a member of the commission be represented by an alternate but 12
362	362	only if there is on file with the commission written notification of the designation and 13
363	363	identity of the alternate. The attorney general of each party state or the designee of the 14
364	364	attorney general, or other counsel if the laws of the party state specifically provide, 15
365	365	shall be entitled to attend the meetings of the commission, but shall not vote. Such 16
366	366	attorneys general, designees, or other counsel shall receive all notices of meetings 17
367	367	required under paragraph 1(e) of this Article. 18
368	368	(b) Each party state shall provide by law for the selection of representatives 19
369	369	from its subdivisions affected by this compact to consult with the commission member 20
370	370	from that state. 21
371	371	(c) Each member shall be entitled to one vote. The commission shall not act 22
372	372	unless a majority of the members are present, and no action shall be binding unless 23
373	373	approved by a majority of the total number of members. 24
374	374	(d) The commission shall adopt an official seal to be used as it may provide. 25
375	375	(e) The commission shall hold an annual meeting and such other regular 26
376	376	meetings as its bylaws may provide and such special meetings as its executive 27
377	377	committee may determine. The commission bylaws shall specify the dates of the 28
378	378	annual and any other regular meetings, and shall provide for the giving of notice of 29
379	379	annual, regular and special meetings. Notices of special meetings shall include the 30
380	380	reasons therefor and an agenda of the items to be considered. 31 34-LS0564\A
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384	384	(f) The commission shall elect annually, from among its members, a chairman, 1
385	385	a vice-chairman and a treasurer. The commission shall appoint an executive director 2
386	386	who shall serve at its pleasure, and it shall fix the duties and compensation of the 3
387	387	executive director. The executive director shall be secretary of the commission. The 4
388	388	commission shall make provision for the bonding of such of its officers and employees 5
389	389	as it may deem appropriate. 6
390	390	(g) Irrespective of the civil service, personnel or other merit system laws of 7
391	391	any party state, the executive director shall appoint or discharge such personnel as 8
392	392	may be necessary for the performance of the functions of the commission and shall fix 9
393	393	their duties and compensation. The commission bylaws shall provide for personnel 10
394	394	policies and programs. 11
395	395	(h) The commission may borrow, accept or contract for the services of 12
396	396	personnel from any state, the United States, or any other governmental entity. 13
397	397	(i) The commission may accept for any of its purposes and functions any and 14
398	398	all donations and grants of money, equipment, supplies, materials and services, 15
399	399	conditional or otherwise, from any governmental entity, and may utilize and dispose 16
400	400	of the same. 17
401	401	(j) The commission may establish one or more offices for the transacting of its 18
402	402	business. 19
403	403	(k) The commission shall adopt bylaws for the conduct of its business. The 20
404	404	commission shall publish its bylaws in convenient form, and shall file a copy of the 21
405	405	bylaws and any amendments thereto with the appropriate agency or officer in each of 22
406	406	the party states. 23
407	407	(l) The commission annually shall make to the governor and legislature of 24
408	408	each party state a report covering its activities for the preceding year. Any donation or 25
409	409	grant accepted by the commission or services borrowed shall be reported in the annual 26
410	410	report of the commission, and shall include the nature, amount and conditions, if any, 27
411	411	of the donation, gift, grant or services borrowed and the identity of the donor or 28
412	412	lender. The commission may make additional reports as it may deem desirable. 29
413	413	COMMITTEES. 30
414	414	2.(a) To assist in the conduct of its business when the full co
415	415	mmission is not 31 34-LS0564\A
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418	418
419	419	meeting, the commission shall have an executive committee of seven members, 1
420	420	including the chairman, vice-chairman, treasurer and four other members elected 2
421	421	annually by the commission. The executive committee, subject to the provisions of 3
422	422	this compact and consistent with the policies of the commission, shall function as 4
423	423	provided in the bylaws of the commission. 5
424	424	(b) The commission may establish advisory and technical committees, 6
425	425	membership on which may include private persons and public officials, in furthering 7
426	426	any of its activities. Such committees may consider any matter of concern to the 8
427	427	commission, including problems of special interest to any party state and problems 9
428	428	dealing with particular types of taxes. 10
429	429	(c) The commission may establish such additional committees as its bylaws 11
430	430	may provide. 12
431	431	POWERS. 13
432	432	3. In addition to powers conferred elsewhere in this compact, the commission 14
433	433	shall have power to: 15
434	434	(a) Study state and local tax systems and particular types of state and local 16
435	435	taxes. 17
436	436	(b) Develop and recommend proposals for an increase in uniformity or 18
437	437	compatibility of state and local tax laws with a view toward encouraging the 19
438	438	simplification and improvement of state and local tax law and administration. 20
439	439	(c) Compile and publish information as in its judgment would assist the party 21
440	440	states in implementation of the compact and taxpayers in complying with state and 22
441	441	local tax laws. 23
442	442	(d) Do all things necessary and incidental to the administration of its functions 24
443	443	pursuant to this compact. 25
444	444	FINANCE. 26
445	445	4.(a) The commission shall submit to the governor or designated officer or 27
446	446	officers of each party state a budget of its estimated expenditures for such period as 28
447	447	may be required by the laws of that state for presentation to the legislature thereof. 29
448	448	(b) Each of the commission's budgets of estimated expenditures shall contain 30
449	449	specific recommendations of the amounts to be appropriated by each of the party 31 34-LS0564\A
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452	452
453	453	states. The total amount of appropriations requested under any such budget shall be 1
454	454	apportioned among the party states as follows: one-tenth in equal shares; and the 2
455	455	remainder in proportion to the amount of revenue collected by each party state and its 3
456	456	subdivisions from income taxes, capital stock taxes, gross receipts, taxes, sales and use 4
457	457	taxes. In determining such amounts, the commission shall employ such available 5
458	458	public sources of information as, in its judgment, present the most equitable and 6
459	459	accurate comparisons among the party states. Each of the commission's budgets of 7
460	460	estimated expenditures and requests for appropriations shall indicate the sources used 8
461	461	in obtaining information employed in applying the formula contained in this 9
462	462	paragraph. 10
463	463	(c) The commission shall not pledge the credit of any party state. The 11
464	464	commission may meet any of its obligations in whole or in part with funds available to 12
465	465	it under paragraph 1(i) of this Article: provided that the commission takes specific 13
466	466	action setting aside such funds prior to incurring any obligation to be met in whole or 14
467	467	in part in such manner. Except where the commission makes use of funds available to 15
468	468	it under paragraph 1(i), the commission shall not incur any obligation prior to the 16
469	469	allotment of funds by the party states adequate to meet the same. 17
470	470	(d) The commission shall keep accurate accounts of all receipts and 18
471	471	disbursements. The receipts and disbursements of the commission shall be subject to 19
472	472	the audit and accounting procedures established under its bylaws. All receipts and 20
473	473	disbursements of funds handled by the commission shall be audited yearly by a 21
474	474	certified or licensed public accountant and the report of the audit shall be included in 22
475	475	and become part of the annual report of the commission. 23
476	476	(e) The accounts of the commission shall be open at any reasonable time for 24
477	477	inspection by duly constituted officers of the party states and by any persons 25
478	478	authorized by the commission. 26
479	479	(f) Nothing contained in this Article shall be construed to prevent commission 27
480	480	compliance with laws relating to audit or inspection of accounts by or on behalf of any 28
481	481	government contributing to the support of the commission. 29
482	482	ARTICLE VII. 30
483	483	UNIFORM REGULATIONS AND FORMS. 31 34-LS0564\A
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486	486
487	487	1. Whenever any two or more party states, or subdivisions of party states, have 1
488	488	uniform or similar provisions of law relating to an income tax, capital stock tax, gross 2
489	489	receipts tax, sales or use tax, the commission may adopt uniform regulations for any 3
490	490	phase of the administration of such law, including assertion of jurisdiction to tax, or 4
491	491	prescribing uniform tax forms. The commission may also act with respect to the 5
492	492	provisions of Article IV of this compact. 6
493	493	2. Prior to the adoption of any regulation, the commission shall: 7
494	494	(a) As provided in its bylaws, hold at least one public hearing on due notice to 8
495	495	all affected party states and subdivisions thereof and to all taxpayers and other persons 9
496	496	who have made timely request of the commission for advance notice of its regulation-10
497	497	making proceedings. 11
498	498	(b) Afford all affected party states and subdivisions and interested persons an 12
499	499	opportunity to submit relevant written data and views, which shall be considered fully 13
500	500	by the commission. 14
501	501	3. The commission shall submit any regulations adopted by it to the 15
502	502	appropriate officials of all party states and subdivisions to which they might apply. 16
503	503	Each such state and subdivision shall consider any such regulations for adoption in 17
504	504	accordance with its own laws and procedures. 18
505	505	ARTICLE VIII. 19
506	506	INTERSTATE AUDITS. 20
507	507	1. This Article shall be in force only in those party states that specifically 21
508	508	provide therefor by statute. 22
509	509	2. Any party state or subdivision thereof desiring to make or participate in an 23
510	510	audit of any accounts, books, papers, records or other documents may request the 24
511	511	commission to perform the audit on its behalf. In responding to the request, the 25
512	512	commission shall have access to and may examine, at any reasonable time, such 26
513	513	accounts, books, papers, records, and other documents and any relevant property or 27
514	514	stock of merchandise. The commission may enter into agreements with party states or 28
515	515	their subdivisions for assistance in performance of the audit. The commission shall 29
516	516	make charges, to be paid by the state or local government or governments for which it 30
517	517	performs the service, for any audits performed by it in order to reimburse itself for the 31 34-LS0564\A
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520	520
521	521	actual costs incurred in making the audit. 1
522	522	3. The commission may require the attendance of any person within the state 2
523	523	where it is conducting an audit or part thereof at a time and place fixed by it within 3
524	524	such state for the purpose of giving testimony with respect to any account, book, 4
525	525	paper, document, other record, property or stock of merchandise being examined in 5
526	526	connection with the audit. If the person is not within the jurisdiction, the person may 6
527	527	be required to attend for such purpose at any time and place fixed by the commission 7
528	528	within the state of which the person is a resident: provided that such state has adopted 8
529	529	this Article. 9
530	530	4. The commission may apply to any court having power to issue compulsory 10
531	531	process for orders in aid of its powers and responsibilities pursuant to this Article and 11
532	532	any and all such courts shall have jurisdiction to issue such orders. Failure of any 12
533	533	person to obey any such order shall be punishable as contempt of the issuing court. If 13
534	534	the party or subject matter on account of which the commission seeks an order is 14
535	535	within the jurisdiction of the court to which application is made, such application may 15
536	536	be to a court in the state or subdivision on behalf of which the audit is being made or a 16
537	537	court in the state in which the object of the order being sought is situated. The 17
538	538	provisions of this paragraph apply only to courts in a state that has adopted this 18
539	539	Article. 19
540	540	5. The commission may decline to perform any audit requested if it finds that 20
541	541	its available personnel or other resources are insufficient for the purpose or that, in the 21
542	542	terms requested, the audit is impracticable of satisfactory performance. If the 22
543	543	commission, on the basis of its experience, has reason to believe that an audit of a 23
544	544	particular taxpayer, either at a particular time or on a particular schedule, would be of 24
545	545	interest to a number of party states or their subdivisions, it may offer to make the audit 25
546	546	or audits, the offer to be contingent on sufficient participation therein as determined by 26
547	547	the commission. 27
548	548	6. Information obtained by any audit pursuant to this Article shall be 28
549	549	confidential and available only for tax purposes to party states, their subdivisions or 29
550	550	the United States. Availability of information shall be in accordance with the laws of 30
551	551	the states or subdivisions on whose account the commission performs the audit, and 31 34-LS0564\A
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554	554
555	555	only through the appropriate agencies or officers of such states or subdivisions. 1
556	556	Nothing in this Article shall be construed to require any taxpayer to keep records for 2
557	557	any period not otherwise required by law. 3
558	558	7. Other arrangements made or authorized pursuant to laws for cooperative 4
559	559	audit by or on behalf of the party states or any of their subdivisions are not superseded 5
560	560	or invalidated by this Article. 6
561	561	8. In no event shall the commission make any charge against a taxpayer for an 7
562	562	audit. 8
563	563	9. As used in this Article, "tax," in addition to the meaning ascribed to it in 9
564	564	Article II, means any tax or license fee imposed in whole or in part for revenue 10
565	565	purposes. 11
566	566	ARTICLE IX. 12
567	567	ARBITRATION. 13
568	568	1. Whenever the commission finds a need for settling disputes concerning 14
569	569	apportionments and allocations by arbitration, it may adopt a regulation placing this 15
570	570	Article in effect, notwithstanding the provisions of Article VII. 16
571	571	2. The commission shall select and maintain an arbitration panel composed of 17
572	572	officers and employees of state and local governments and private persons who shall 18
573	573	be knowledgeable and experienced in matters of tax law and administration. 19
574	574	3. Whenever a taxpayer who has elected to employ Article IV, or whenever the 20
575	575	laws of the party state or subdivision thereof are substantially identical with the 21
576	576	relevant provisions of Article IV, the taxpayer, by written notice to the commission 22
577	577	and to each party state or subdivision thereof that would be affected, may secure 23
578	578	arbitration of an apportionment or allocation, if the taxpayer is dissatisfied with the 24
579	579	final administrative determination of the tax agency of the state or subdivision with 25
580	580	respect thereto on the ground that it would subject the taxpayer to double or multiple 26
581	581	taxation by two or more party states or subdivisions thereof. Each party state and 27
582	582	subdivision thereof hereby consents to the arbitration as provided herein, and agrees to 28
583	583	be bound thereby. 29
584	584	4. The arbitration board shall be composed of one person selected by the 30
585	585	taxpayer, one by the agency or agencies involved, and one member of the 31 34-LS0564\A
586	586	SB 113 -18- SB0113A
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588	588
589	589	commission's arbitration panel. If the agencies involved are unable to agree on the 1
590	590	person to be selected by them, such person shall be selected by lot from the total 2
591	591	membership of the arbitration panel. The two persons selected for the board in the 3
592	592	manner provided by the foregoing provisions of this paragraph shall jointly select the 4
593	593	third member of the board. If they are unable to agree on the selection, the third 5
594	594	member shall be selected by lot from among the total membership of the arbitration 6
595	595	panel. No member of a board selected by lot shall be qualified to serve if the member 7
596	596	is an officer or employee or is otherwise affiliated with any party to the arbitration 8
597	597	proceeding. Residence within the jurisdiction of a party to the arbitration proceeding 9
598	598	shall not constitute affiliation within the meaning of this paragraph. 10
599	599	5. The board may sit in any state or subdivision party to the proceeding, in the 11
600	600	state of the taxpayer's incorporation, residence or domicile, in any state where the 12
601	601	taxpayer does business, or in any place that it finds most appropriate for gaining 13
602	602	access to evidence relevant to the matter before it. 14
603	603	6. The board shall give due notice of the times and places of its hearings. The 15
604	604	parties shall be entitled to be heard, to present evidence, and to examine and cross-16
605	605	examine witnesses. The board shall act by majority vote. 17
606	606	7. The board shall have power to administer oaths, take testimony, subpoena 18
607	607	and require the attendance of witnesses and the production of accounts, books, papers, 19
608	608	records, and other documents, and issue commissions to take testimony. Subpoenas 20
609	609	may be signed by any member of the board. In case of failure to obey a subpoena, and 21
610	610	upon application by the board, any judge of a court of competent jurisdiction of the 22
611	611	state in which the board is sitting or in which the person to whom the subpoena is 23
612	612	directed may be found may make an order requiring compliance with the subpoena, 24
613	613	and the court may punish failure to obey the order as a contempt. The provisions of 25
614	614	this paragraph apply only in states that have adopted this Article. 26
615	615	8. Unless the parties otherwise agree the expenses and other costs of the 27
616	616	arbitration shall be assessed and allocated among the parties by the board in such 28
617	617	manner as it may determine. The commission shall fix a schedule of compensation for 29
618	618	members of arbitration boards and of other allowable expenses and costs. No officer
619	619	30
620	620	or employee of a state or local government who serves as a member of a board shall be 31 34-LS0564\A
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623	623
624	624	entitled to compensation therefor unless the member is required on account of the 1
625	625	service as a board member to forego the regular compensation attaching to the public 2
626	626	employment, but any such board member shall be entitled to expenses. 3
627	627	9. The board shall determine the disputed apportionment or allocation and any 4
628	628	matters necessary thereto. The determinations of the board shall be final for purposes 5
629	629	of making the apportionment or allocation, but for no other purpose. 6
630	630	10. The board shall file with the commission and with each tax agency 7
631	631	represented in the proceeding: the determination of the board; the board's written 8
632	632	statement of its reasons therefor; the record of the board's proceedings; and any other 9
633	633	documents required by the arbitration rules of the commission to be filed. 10
634	634	11. The commission shall publish the determinations of boards together with 11
635	635	the statements of the reasons therefor. 12
636	636	12. The commission shall adopt and publish rules of procedure and practice 13
637	637	and shall file a copy of such rules and of any amendment thereto with the appropriate 14
638	638	agency or officer in each of the party states. 15
639	639	13. Nothing contained herein shall prevent at any time a written compromise of 16
640	640	any matter or matters in dispute, if otherwise lawful, by the parties to the arbitration 17
641	641	proceedings. 18
642	642	ARTICLE X. 19
643	643	ENTRY INTO FORCE AND WITHDRAWAL. 20
644	644	1. This compact shall enter into force when enacted into law by any seven 21
645	645	states. Thereafter, this compact shall become effective as to any other state upon its 22
646	646	enactment thereof. The commission shall arrange for notification of all party states 23
647	647	whenever there is a new enactment of the compact. 24
648	648	2. Any party state may withdraw from this compact by enacting a statute 25
649	649	repealing the same. No withdrawal shall affect any liability already incurred by or 26
650	650	chargeable to a party state prior to the time of such withdrawal. 27
651	651	3. No proceeding commenced before an arbitration board prior to the 28
652	652	withdrawal of a state and to which the withdrawing state or any subdivision thereof is 29
653	653	a party shall be discontinued or terminated by the withdrawal, nor shall the board 30
654	654	thereby lose jurisdiction over any of the parties to the proceeding necessary to make a 31 34-LS0564\A
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657	657
658	658	binding determination therein. 1
659	659	ARTICLE XI. 2
660	660	EFFECT ON OTHER LAWS AND JURISDICTION. 3
661	661	Nothing in this compact shall be construed to: 4
662	662	(a) Affect the power of any state or subdivision thereof to fix rates of taxation, 5
663	663	except that a party state shall be obligated to implement Article III 2 of this compact. 6
664	664	(b) Apply to any tax or fixed fee imposed for the registration of a motor 7
665	665	vehicle or any tax on motor fuel, other than a sales tax: provided that the definition of 8
666	666	"tax" in Article VIII 9 may apply for the purposes of that Article and the commission's 9
667	667	powers of study and recommendation pursuant to Article VI 3 may apply. 10
668	668	(c) Withdraw or limit the jurisdiction of any state or local court or 11
669	669	administrative officer or body with respect to any person, corporation or other entity 12
670	670	or subject matter, except to the extent that such jurisdiction is expressly conferred by 13
671	671	or pursuant to this compact upon another agency or body. 14
672	672	(d) Supersede or limit the jurisdiction of any court of the United States. 15
673	673	ARTICLE XII. 16
674	674	CONSTRUCTION AND SEVERABILITY. 17
675	675	This compact shall be liberally construed so as to effectuate the purposes 18
676	676	thereof. The provisions of this compact shall be severable and if any phrase, clause, 19
677	677	sentence, or provision of this compact is declared to be contrary to the constitution of 20
678	678	any state or of the United States or the applicability thereof to any government, 21
679	679	agency, person or circumstance is held invalid, the validity of the remainder of this 22
680	680	compact and the applicability thereof to any government, agency, person or 23
681	681	circumstance shall not be affected thereby. If this compact shall be held contrary to the 24
682	682	constitution of any state participating therein, the compact shall remain in full force 25
683	683	and effect as to the remaining party states and in full force and effect as to the state 26
684	684	affected as to all severable matters. 27
685	685	* Sec. 2. AS 43.20.143(a) is amended to read: 28
686	686	(a) All apportionable [BUSINESS] income of water transportation carriers 29
687	687	shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax 30
688	688	Compact) as modified by the following: 31 34-LS0564\A
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691	691
692	692	(1) the numerator of the property factor is the sum of the value for 1
693	693	property in a fixed location, including buildings and land used in the business, and 2
694	694	intrastate equipment and personal property determined according to AS 43.19 3
695	695	(Multistate Tax Compact), and the value of interstate mobile property determined on a 4
696	696	days-spent-in-ports basis as provided in (4) of this subsection; the denominator of the 5
697	697	property factor is determined according to AS 43.19 (Multistate Tax Compact); 6
698	698	(2) the numerator of the payroll factor is the sum of the wages and 7
699	699	salaries of employees assigned to fixed locations determined according to AS 43.19 8
700	700	(Multistate Tax Compact) and the wages and salaries of employees assigned to 9
701	701	interstate mobile property determined on a days-spent-in-ports basis as provided in (4) 10
702	702	of this subsection; the denominator of the payroll factor is determined in accordance 11
703	703	with AS 43.19 (Multistate Tax Compact); 12
704	704	(3) the numerator of the sales factor is the sum of all revenues from 13
705	705	intrastate activities and revenues from interstate activities determined on a days-spent-14
706	706	in-ports basis as provided in (4) of this subsection; the denominator is determined in 15
707	707	accordance with AS 43.19 (Multistate Tax Compact); 16
708	708	(4) the portions of the numerator of the property, payroll, and sales 17
709	709	factors which are directly related to interstate mobile property operations are 18
710	710	determined by a ratio which the number of days spent in ports inside the state bears to 19
711	711	the total number of days spent in ports inside and outside the state; the term "days 20
712	712	spent in ports" does not include periods when ships are tied up because of strikes or 21
713	713	withheld from Alaska service for repairs, or because of seasonal reduction of service; 22
714	714	days in port are computed by dividing the total number of hours in all ports by 24. 23
715	715	* Sec. 3. AS 43.20.144(a) is amended to read: 24
716	716	(a) All apportionable [BUSINESS] income of a taxpayer engaged in the 25
717	717	production of oil or gas from a lease or property in this state or engaged in the 26
718	718	transportation of oil or gas by pipeline in this state shall be apportioned to this state in 27
719	719	accordance with AS 43.19 (Multistate Tax Compact) as modified by this section. 28
720	720	* Sec. 4. AS 43.20.144(b) is amended to read: 29
721	721	(b) A taxpayer's apportionable [BUSINESS] income to be apportioned under 30
722	722	this section to the state shall be the federal taxable income of the taxpayer's 31 34-LS0564\A
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725	725
726	726	consolidated business for the tax period, except that 1
727	727	(1) taxes based on or measured by net income that are deducted in the 2
728	728	determination of the federal taxable income shall be added back; the tax levied and 3
729	729	paid under AS 43.55 may not be added back; 4
730	730	(2) intangible drilling and development costs that are deducted as 5
731	731	expenses under 26 U.S.C. 263(c) (Internal Revenue Code) in the determination of the 6
732	732	federal taxable income shall be capitalized and depreciated as if the option to treat 7
733	733	them as expenses under 26 U.S.C. 263(c) (Internal Revenue Code) had not been 8
734	734	exercised; 9
735	735	(3) depletion deducted on the percentage depletion basis under 26 10
736	736	U.S.C. 613 (Internal Revenue Code) in the determination of the federal taxable income 11
737	737	shall be recomputed and deducted on the cost depletion basis under 26 U.S.C. 612 12
738	738	(Internal Revenue Code); and 13
739	739	(4) depreciation shall be computed on the basis of 26 U.S.C. 167 14
740	740	(Internal Revenue Code) as that section read on June 30, 1981. 15
741	741	* Sec. 5. AS 43.20.144(c) is amended to read: 16
742	742	(c) A taxpayer's apportionable [BUSINESS] income shall be apportioned to 17
743	743	this state by multiplying the taxpayer's income determined under (b) of this section by 18
744	744	the apportionment factor applicable to the taxpayer among the following factors: 19
745	745	(1) the apportionment factor of a taxpayer subject to this section but 20
746	746	not engaged in the production of oil and gas, or of gas only, as appropriate, from a 21
747	747	lease or property in this state during the tax period is a fraction, the numerator of 22
748	748	which is the sum of the property factor under AS 43.19 (Multistate Tax Compact) and 23
749	749	the sales factor under (d) of this section for the taxpayer for that tax period, and the 24
750	750	denominator of which is two; 25
751	751	(2) the apportionment factor of a taxpayer subject to this section but 26
752	752	not engaged in the pipeline transportation of oil or gas in this state during the tax 27
753	753	period is a fraction, the numerator of which is the sum of the property factor under (e) 28
754	754	of this section and the extraction factor under (f) of this section for the taxpayer for the 29
755	755	tax period, and the denominator of which is two; 30
756	756	(3) the apportionment factor of a taxpayer engaged both in the 31 34-LS0564\A
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759	759
760	760	production of oil or gas from a lease or property in this state and in the pipeline 1
761	761	transportation of oil or gas in this state during the tax period is a fraction, the 2
762	762	numerator of which is the sum of the sales factor under (d) of this section, the property 3
763	763	factor under (e) of this section, and the extraction factor under (f) of this section for 4
764	764	the taxpayer for the tax period, and the denominator of which is three. 5
765	765	* Sec. 6. AS 43.20.145(e) is amended to read: 6
766	766	(e) The department may require a corporation that files under (a) of this 7
767	767	section to file a report under AS 43.20.142, [AND] 43.20.143, and 43.20.148 prepared 8
768	768	without regard to this section if the corporation or an affiliated corporation 9
769	769	(1) fails to comply with regulations adopted under this chapter, 10
770	770	including domestic disclosure spread sheet filing requirements; or 11
771	771	(2) does not provide information that is requested by the department 12
772	772	that is necessary for the department to audit the taxpayer's corporate return in a 13
773	773	reasonable period of time. 14
774	774	* Sec. 7. AS 43.20 is amended by adding a new section to article 2 to read: 15
775	775	Sec. 43.20.148. Highly digitized businesses. (a) All apportionable income of a 16
776	776	taxpayer engaged in a highly digitized business in the state shall be apportioned to this 17
777	777	state in accordance with AS 43.19 (Multistate Tax Compact) as modified by this 18
778	778	section. 19
779	779	(b) The apportionment factor of a taxpayer subject to this section is the sales 20
780	780	factor. The sales factor is determined in accordance with AS 43.19 (Multistate Tax 21
781	781	Compact). 22
782	782	(c) A taxpayer is engaged in a highly digitized business in this state when 50 23
783	783	percent or more of the taxpayer's sales in this state consist of any combination of sales 24
784	784	of 25
785	785	(1) intangible property delivered by electronic transmission in this 26
786	786	state; 27
787	787	(2) services delivered by electronic transmission in this state; 28
788	788	(3) services related to computers, electronic transmissions, or Internet 29
789	789	technology delivered in this state; or 30
790	790	(4) tangible personal property delivered in this state from Internet 31 34-LS0564\A
791	791	SB 113 -24- SB0113A
792	792	New Text Underlined [DELETED TEXT BRACKETED]
793	793
794	794	sales, if the Internet is the primary mode of customer access in this state. 1
795	795	(d) The department may require a taxpayer to apportion income under this 2
796	796	section if the department determines that the taxpayer's business activity in this state 3
797	797	may be otherwise characterized as a highly digitized business. 4
798	798	(e) This section does not apply to a 5
799	799	(1) public utility allocating and apportioning income under 6
800	800	AS 43.20.146; or 7
801	801	(2) utility furnishing telecommunications services. 8
802	802	(f) In this section, 9
803	803	(1) "delivered" includes delivered to or on behalf of a customer or 10
804	804	delivered through a customer; 11
805	805	(2) "electronic transmission" includes transmission by wire, lines, 12
806	806	cable, fiber optics, electronic signals, satellite transmission, audio or radio waves, or 13
807	807	similar means, whether or not the provider owns, leases, or otherwise controls the 14
808	808	transmission equipment; 15
809	809	(3) "intangible property" includes licenses and sublicenses for data 16
810	810	access, streaming or other electronic transmission of music, videos, books, games, or 17
811	811	other digital goods, and remote access software; 18
812	812	(4) "Internet sales" includes sales through an Internet website, 19
813	813	application, or other electronic means, including sales made by computer, tablet, 20
814	814	telephone, or other similar device. 21
815	815	* Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 22
816	816	read: 23
817	817	APPLICABILITY. AS 43.20.148, added by sec. 7 of this Act, applies to a taxpayer 24
818	818	that is filing a return for a tax year beginning on or after January 1, 2026. 25
819	819	* Sec. 9. This Act takes effect January 1, 2026. 26