DOR says revenue impact of pass‑through entity tax is indeterminate; committee sets amendment deadline

Department of Revenue officials told the House Labor and Commerce Committee they cannot produce a precise revenue estimate for House Bill 350, which would subject certain pass‑through entities to a new Alaska tax treatment.

Brandon Spanos, acting director of the Tax Division, said the department lacks the underlying federal and apportionment data needed to translate corporate gross receipts into "Alaska taxable income" for pass‑through entities and observed that some companies’ tax information would be confidential. Because of that, DOR provided a wide illustrative range of potential revenue — $0 to $110 million — rather than a point estimate.

Spanos said the bill’s design (taxing entities with Alaska taxable income above $25 million) means the taxpayer base could be very small and that state taxable income differs from publicly reported gross revenue due to deductions, credits and apportionment. He said department programming could be ready in eight to 12 months and that an effective date of January 1, 2027 was feasible, with filings beginning in 2028; the department would add a position that would focus on testing and later auditing taxpayers.

Committee members asked whether the department could identify likely affected companies from publicly available revenue data; Spanos explained the technical limits of converting gross revenue to Alaska taxable income and the confidentiality concerns for privately held entities. Representative Paul asked about implementation timing and Spanos confirmed the department believed it could have online filing tools ready with the timeline provided.

The committee set an amendment deadline for Monday, April 27 at 5 p.m. and left further action pending additional materials and stakeholder input.