HB 281 Summary

• Imposes a 1.5% tax on wages and net earnings from self-employment of individuals with income sources in Alaska, effective January 1, 2019.

• Tax is capped annually at the greater of twice the permanent fund dividend or $2,200 adjusted for inflation based on the Anchorage Consumer Price Index from July 1, 2017.

• Establishes the Alaska economic recovery tax account in the general fund to receive tax receipts, with money available for legislative appropriation to capital projects, grants, municipal improvements, housing programs, and energy efficiency initiatives.

• Requires employers to withhold taxes on wages and remit to the Department of Revenue, with self-employed individuals filing returns aligned with federal income tax deadlines.

• Repeals all wage and self-employment tax provisions on July 1, 2021, making the tax temporary unless renewed by the legislature.