• Alaska Legislature passed SB 113, a new corporate tax targeting out-of-state digitized businesses.
• The bill focuses on businesses deriving 50% or more of their Alaska sales from intangible property or electronically delivered services.
• Concerns raised about the bill's rushed process, potential impact on Alaskan businesses and consumers, and complexity for small business owners.

The Alaska Legislature has approved Senate Bill 113, also known as the 'Etsy Tax'. This new corporate tax targets out-of-state, highly digitized businesses, like Amazon and Etsy, that conduct digital transactions with Alaskan consumers. Sponsored by Democrat Sen. Bill Wielechowski, the bill amends Alaska’s corporate income tax code and has been met with criticism regarding its rushed process and potential negative impacts on small businesses operating in Alaska.

• What: Senate Bill 113 amends Alaska's corporate income tax code to target out-of-state, highly digitized businesses conducting digital transactions with Alaskan consumers. It focuses on businesses deriving 50% or more of their Alaska sales from intangible property or electronically delivered services.
• Who: Key individuals include Sen. Bill Wielechowski (sponsor), Rep. Sarah Vance (critic), and businesses like Amazon and Etsy. Key organizations include the Alaska Legislature, Alaska State Chamber of Commerce, Tax Foundation, and Reason Foundation.
• When: The House voted on the bill Wednesday. The bill had only 1.5 hours of committee review before the final vote.
• Where: The bill impacts businesses selling to Alaskan consumers.

SB 113's passage raises concerns about its impact on small businesses and consumers in Alaska. The rushed process and limited debate have drawn criticism. The bill's focus on market-based sourcing for tax apportionment could lead to inequities and increased complexity for businesses. The high corporate tax rate might discourage businesses from operating in Alaska, potentially impacting rural Alaskans who rely on these services.

The Alaska Legislature's approval of the 'Etsy Tax' (SB 113) marks a significant change to the state's corporate tax code, with potential implications for out-of-state digital businesses and Alaskan consumers. The long-term effects of this new tax, especially on small businesses and rural communities, remain to be seen and will likely depend on how the regulations are implemented and enforced.