Alaska Senate president considering state sales tax

In response to Gov. Bill Walker's proposed state budget, the president of the Alaska Senate says the Legislature should consider a sales tax similar to one that died in the state House more than 10 years ago.

Sen. Kevin Meyer, R-Anchorage, said in an email this week to 14 state senators that "in light of the taxation legislation package recently submitted by the governor, it seems a statewide sales tax should also be part of the discussion."

State lawmakers have been grappling with how to fix the state's $3.5 billion deficit, driven by falling oil prices and production. In early December, Walker released a budget plan that included new taxes, smaller Permanent Fund dividends, and $100 million in cuts to state agencies -- smaller than last year's cuts.

Meyer and House Speaker Mike Chenault, R-Nikiski, later said the Legislature would pursue deeper cuts but didn't offer many concrete ideas for how to close the budget gap.

Meyer, who didn't respond to repeated requests for comment, said in the email that he has requested a draft of a sales tax bill -- to be modeled on proposed legislation from the House Special Committee on Ways and Means from 2003 -- "that can be used to bring the discussion forward."

The bill from 2003 that fits that description was House Bill 293, which proposed a 3 percent statewide sales and use tax. The measure would have brought in $120 million in the 2004 fiscal year and about $300 million each year after that, the Anchorage Daily News reported in 2003. It also included a 12-cent increase in Alaska's gas tax, which would have brought in $40 million more.

Rather than have the bill fail in a vote, the Daily News reported, the bill was pulled off the House floor. It seemed to have been about five or six votes short of being able to pass.

HB 293 included tax exemptions for property and services used for operations and maintenance in natural resource extraction of oil and gas, fish and seafood, timber and other forest products.

Alaska does not currently have a sales tax, though many local jurisdictions within the state do.

Meyer also asked the other lawmakers in his email to alert him if similar legislation was already in the works.

Annie Zak

Annie Zak was a business reporter for the ADN between 2015 and 2019.