HB 37 Summary

• Establishes a 2.5 percent individual income tax on resident individuals, trusts, and estates, and on nonresident income derived from Alaska sources, effective January 1, 2024.

• Allows individuals to direct the state to withhold permanent fund dividends to pay income tax obligations under the new tax system.

• Modifies permanent fund management by changing how earnings are appropriated: 10 percent to dividends and 90 percent to the general fund, with the legislature having discretion over these appropriations rather than automatic transfers.

• Repeals various tax credits and exemptions under current Alaska law, with most provisions taking effect January 1, 2024, and some provisions effective July 1, 2022.

• Includes comprehensive definitions and rules for calculating taxable income, deductions, and credits for residents, nonresidents, trusts, estates, partnerships, and S corporations.