Alaska House Approves State Corporate Tax for Online Businesses

JUNEAU — The Alaska Legislature voted on May 7, 2025, to approve a significant measure aimed at raising new state revenue through a corporate income tax on out-of-state businesses operating online. Senate Bill 113 is projected to generate between $25 million and $65 million annually for the state treasury, funding vital reading initiatives and career and technical education programs.

This legislation is the first substantial revenue-raising move by Alaska in years, shifting the tax burden to companies that do business within state lines, even without a physical presence. While supporters argue it targets large, highly digitized businesses like Hulu and Netflix, detractors voice concerns that the costs could ultimately trickle down to consumers.

The measure garnered approval from the House with a 26-14 vote, with bipartisan support from five Republican minority members alongside the Democratic majority. Rep. Will Stapp, who introduced the bill, emphasized that it would not affect most local businesses.

However, opposing lawmakers, including Rep. Jamie Allard, cautioned that any new tax could impact Alaska’s consumers and businesses. The additional revenue is linked to House Bill 57, a bipartisan education package previously passed by the Legislature.

Next, the bill awaits Governor Mike Dunleavy’s decision, with speculation surrounding a potential veto. Dunleavy has historically resisted tax measures, raising questions about whether the Legislature would possess the votes to override such a decision.

Democratic Sen. Bill Wielechowski described the bill as a rare opportunity to enhance revenue without burdening Alaskans directly.