HB 118 Summary

• Establishes the Alaska Tax Break Transparency Act requiring the legislature to include rationale and purpose statements in bills creating tax expenditures.

• Requires the legislative finance division to analyze tax expenditures exceeding $1,000,000 annually, with existing expenditures analyzed between July 1, 2015 and June 30, 2020, and new expenditures analyzed after seven years or one year before delayed repeal dates.

• Mandates the Department of Revenue to annually publish a revenue and tax expenditure report including statutory authority, annual tax expenditure sums by type, current year estimates, number of benefiting taxpayers, and administration costs.

• Creates a qualified research and development tax credit allowing taxpayers to claim 20 percent of qualified R&D expenditures exceeding a three-year average baseline, with a maximum credit of $10,000,000 per year and seven-year carryforward for unused credits.

• Takes effect immediately except for tax expenditure analysis provisions, which take effect July 1, 2018.