AK SB113

Amends Alaska's Multistate Tax Compact to shift from "cost of performance" to "market-based sourcing" for apportioning income from sales of services and intangible property, assigning sales to the state where the customer receives the benefit

Creates a new "highly digitized business" tax category (AS 43.20.148) for businesses where 50% or more of Alaska sales come from electronically delivered intangible property, electronic services, computer/Internet-related services, or Internet-based tangible goods sales

Requires highly digitized businesses to apportion income to Alaska using only the sales factor, rather than the traditional three-factor formula of property, payroll, and sales

Replaces terminology throughout the Multistate Tax Compact, changing "business income" to "apportionable income" and "nonbusiness income" to "non-apportionable income" to align with broader constitutional apportionment standards

Takes effect January 1, 2026, applying to tax years beginning on or after that date; exempts public utilities and telecommunications providers from the highly digitized business provisions