Tax Thee, Not Me

Fiscal Policy, Recent News — By on June 26, 2017 at 1:13 PM

During the current legislative session, Representative Seaton (R, Homer) introduced an income tax bill (HB115) that passed the House but got little traction in the Senate.  Apparently, Representative Seaton believes that the state bureaucracy cannot be slimmed down and that Alaska is not spending enough money on its services.  The House voted 22-17 (one excused) in favor of levying an income tax on the people of Alaska.  Here is the vote tally:

Yeas: Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn, Guttenberg, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux, Ortiz, Parish, Seaton, Spohnholz, Stutes, Tarr, Tuck, Westlake, Wool

Nays: Birch, Chenault, Eastman, Johnson, Johnston, Knopp, Kopp, Millett, Pruitt, Rauscher, Reinbold, Saddler, Sullivan-Leonard, Talerico, Thompson, Tilton, Wilson

Excused: Neuman

The bill was defeated in the Senate by a vote of 4-15 (one excused).  Here is the Senate vote tally:

Yeas: Begich, Egan, Gardner, Olson

Nays: Bishop, Coghill, Costello, Dunleavy, Giessel, Hoffman, Hughes, Kelly, MacKinnon, Meyer, Micciche, Stevens, von Imhof, Wielechowski, Wilson

Excused: Stedman

When one reads a bill it is important to look at the definition of terms included in the bill.  Usually, this is at the end of the bill, as in HB115. There is one very “intriguing” definition of a “resident” subject to this income tax. Here is one of the several definitions of a “resident”:

“(17)  “resident individual ” means an individual who

(C) is domiciled in the state for the entire taxable year unless the individual maintains a permanent place of abode outside the state and spends, in the aggregate, not more than 30 days during the taxable year in the state:”

This would mean that the following would have to pay a State of Alaska income tax on income earned during the time that they spent more than 30 days total in Alaska:

  1. A person hunting and/or fishing for more than 30 days;
  2. A person coming to Alaska to care for aged parents for more than 30 days;
  3. Grandparents visiting grandchildren for more than 30 days;
  4. Parents visiting their children for more than 30 days;
  5. A tourist spending more than 30 days in Alaska;
  6. A student attending the University of AK system;
  7. Military personnel stationed in AK even though they claim a state other than AK for their residence/domicile;
  8. Military personnel on temporary duty (TDY) assigned to AK;
  9. Summer lodge workers who use no infrastructure

Meanwhile, state legislators receive $285 in per diem pay on which they do not pay an income tax.  In a 30 day period this would be $8,550. Is this fair?  Only if you are a legislator and writing an income tax bill!  Does anyone really read the bills before they vote? Ask those legislators above who voted “Yea” on HB115.

 

Tax Thee, Not Me

 

 



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