By SUZANNE DOWNING
April 2, 2026 – It’s try, try again on taxes in the Alaska Legislature. The Alaska House has passed a bill aimed at modernizing how the state taxes large multistate corporations, particularly ones that sell digital services to Alaskans but have little or no physical presence in the state.
House Bill 280, approved in a 22–17 vote, with Ketchikan Rep. Jeremy Byrum, a member of the Republican minority voting with the Democrat majority in favor, updates Alaska’s corporate income tax apportionment rules by shifting to what is known as “market-based sourcing,” a change that supposedly is reflective of modern commerce.
This is a new iteration of a bill the governor has vetoed earlier this year.
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Under current law, Alaska generally taxes corporate income based on where a company performs its work, using factors such as payroll, property, and operational costs.
HB 280 instead attributes income to Alaska based on where customers are located, meaning revenue from goods, services, software, streaming, advertising, and other digital products sold to Alaskans would be taxed by the state even if the company operates elsewhere.
The bill would mean Alaska captures taxes from out-of-state corporations that benefit from Alaska consumers, expanding Alaska’s tax reach and creating new compliance burdens or may even discourage companies from doing business in the state.
The legislation specifically updates Alaska’s adoption of the Multistate Tax Compact, modernizing definitions and sourcing rules for broadcasters, telecommunications providers, and financial institutions. It replaces older terminology such as “business income” with “apportionable income” and clarifies what counts as sales for tax purposes.
An earlier version of the bill targeted “highly digitized businesses.” A previous bill with that language was vetoed by the governor. That section was removed in the House Finance Committee substitute before final passage of the new version.
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There is no analysis available to determine just how many C corporations would be impacted by the new tax. The Department of Revenue estimates the change would generate roughly $15 million per year in additional corporate income tax revenue, primarily from large multistate “C” corporations. The bill includes funding for two additional auditors to handle enforcement.
The measure would apply to tax years beginning Jan. 1, 2027.
HB 280 is a revised version of a similar corporate tax modernization bill vetoed by Gov. Mike Dunleavy last year. It still represents an expansion of Alaska’s corporate tax reach. The measure now moves to the Senate.
Dunleavy in the past year has asked for a complete fiscal plan and has in the past opposed one-off taxes that were not part of a comprehensive revenue and spending plan.
5 thoughts on “House passes HB 280 to expand Alaska’s corporate tax reach to online and out-of-state sellers”
Just because you need more money doesn’t mean to go apply for new credit cards
Our government dependent employees (if this tax is enacted) they will (not the online business they are using) will have to pay more for the products they are buying including the legislators, their spouses, their staff members using online shopping. They are so emotional they forget they have a brain too beside just using their heart to make decisions.
It’s not so much going to hurt the business unless they lose customers. It’s going to hurt all of them at the capital, their families, their neighbors, their friends because then they will had less money in their pocket for having to pay the passed on tax on to the shopper added to their order. So instead of paying 57 dollars the shopper would look at 67 because of the tax added to their bill for shipping to Alaska
Striking another giant blow for AFFORDABILITY!!
So, if I’m reading this correctly, it’s a back door tax on Alaskans using online services, which in drives up the cost of goods and services for Alaskans trying to survive in an already over priced economy. These lame duck politicians have nothing better to do than to squeeze every penny they can out all us Alaskans. How about the worthless politicians ( open and in the closet democrats, yes including you Kathy Giessel ) to cut the budget and live with your means! Talk about a swamp!
The impact of this would run far deeper than these money-grubbing clowns imagine it would. Many small vendors (on Ebay, Etsy, whatever) would simply choose not to ship to Alaska, which would significantly limit the choices for Alaskans. What are the arrogant tax leeches in Juneau doing to reduce spending on Medicaid and Education?