Bill > HB194

This bill establishes a new income tax for certain entities in Alaska that produce or transport oil or gas, with the tax rate increasing based on the amount of taxable income derived from these activities within the state, and it also approves and ratifies a specific sale of royalty oil from the State of Alaska to Marathon Petroleum Supply and Trading Company LLC. The new tax applies to "qualified entities," which include sole proprietorships, partnerships, limited liability companies, and certain other entities that have elected to file federal returns as corporations, and it defines "taxable income" as income from oil or gas production or pipeline transportation within Alaska, including income from related businesses operating as a "unitary business" (meaning they are so interconnected that they are treated as a single entity for tax purposes). The bill also makes changes to existing tax laws to ensure that these qualified entities and their unitary businesses are subject to the new tax structure, preventing them from using certain federal tax deductions or credits against this state tax, and it includes provisions for aggregating income from multiple entities if they are part of a single business operation to prevent tax evasion. Furthermore, the bill formally approves a contract for the sale of royalty oil to Marathon Petroleum Supply and Trading Company LLC, and all new tax provisions are retroactive to January 1, 2026, with some transition rules for tax payments and penalties.