HB 115 Summary: Education Funding Act

• Establishes a new individual income tax in Alaska with progressive rates ranging from 2.5% to 7% on taxable income, applying to residents and nonresidents earning income from sources within the state.

• Creates tax-exempt thresholds of $10,300 for single filers and $20,600 for joint filers, plus $4,000 additional exemption per dependent, with permanent fund dividends excluded from taxable income.

• Allows individuals to direct the Department of Revenue to withhold all or part of their permanent fund dividend to pay income taxes due under the new tax system.

• Imposes income tax on partnerships, S corporations, trusts, and estates with specific rules for calculating taxable income and apportioning income for nonresidents.

• Repeals certain existing tax provisions effective January 1, 2019, and authorizes the Department of Revenue to adopt necessary regulations for implementation, with tax collections dedicated to potential appropriation for public education funding.