Governor Signs Bill Helping Small & Medium Businesses Grow
Senate Bill 7 encourages business growth by updating outdated tax code
SOLDOTNA-Today, Governor Sean Parnell signed a bill into law providing tax relief to small and medium size businesses in Alaska. Senate Bill 7, sponsored by Senator Cathy Giessel, R-Anchorage Hillside/Turnagain Arm/North Kenai, helps businesses keep more of their earnings so they can grow.
"Today we take another step in ensuring Alaskan families' security...security in good paying jobs and economic growth. Our job market and economy are driven by businesses, large and small, whose hard work and ingenuity create economic success. SB 7 allows businesses to keep more of their profits,
enabling reinvestment and healthy growth.”
Addressing the concerns of small business owners in her district, Senator Giessel and her staff discovered that the ten tax brackets used in calculating tax on corporate income had not been adjusted since 1981. SB 7 adjusts those brackets to account for 30 years of inflation at 2.4% per year. With this adjustment, taxpayers will be able to keep and reinvest more of their profits. The bill also adjusts the tax rate for the lowest bracket so that corporations with taxable income of less than 25,000 will pay no tax and it moves the top tax bracket from $90,000 to $222,000.
“The impact of the bill is that our local restaurants, construction companies, tourism businesses and other retailers will be able to keep more of their profits so that they can grow their enterprises,” said Senator Giessel. “While those with the lowest taxable income will benefit the most, all tax payers will see some positive relief. For example, a company with $45,000 in taxable income will see roughly a 50% reduction, while a company which has a taxable income of $550,000 will see about a 6% cut.”
Senate Bill 7 was also amended in the House Finance Committee to include a provision that makes certain kinds of film productions ineligible for the Alaska State film tax credit. Now, productions such as infomercials, political advertisements and pornography will not be eligible for the film tax credit.
Troy McAllister, project manager at Udelhoven Oilfield Services, joined Senator Giessel, as Governor Parnell signed SB 7. Udelhoven is a local Kenai Peninsula oilfield service company with a long Alaska history throughout the state.
The provisions in Senate Bill 7 will take effect immediately.
Senator Giessel also highlighted the Alaska Manufacturing Tax Credit that appears in the More Alaska Production Act (SB 21). This credit promotes Alaska hire by giving a 10% tax credit to Alaska companies who manufacture or modify equipment for the oil and gas industry.
"The Manufacturing Credit is an often overlooked piece of SB 21 which was inserted in the Senate Resources Committee. We wanted to find a way to benefit Alaska companies, here on Alaska soil, and promote hiring Alaskans for good paying jobs."
For more information, please call Lindsay Williams in Senator Giessel’s office at 907-269-0181.