SB 114 Summary

• Establishes a new 9.4% income tax on entities (sole proprietorships, partnerships, S-corps) with qualified taxable income over $4 million annually, applied to income from Alaska oil and gas production and transportation.

• Modifies oil and gas production tax structure effective January 1, 2022, changing from lease/property-based to unit-based taxation for land north of 68 degrees North latitude.

• Adjusts production tax rates and adds new provisions for calculating taxable production values across different geographic regions and production scenarios.

• Expands definitions of deductible lease and unit expenditures while adding restrictions on certain types of costs (internal transfers, dismantlement, repairs unrelated to production).

• Makes changes retroactive to January 1, 2023, with a transition period requiring tax payments by January 1, 2024, and waiving related interest and penalties.