State Corporate Income Tax Analysis
Corporate Income Tax
Alaska levies a corporate income tax (CIT) on certain corporations doing business in the state under AS 43.19 and 43.20. Corporate tax
rates are graduated, with a maximum rate of 9.4% applying to Alaska taxable income above $222,000. S-corporations and limited liability
companies (LLCs) that file federally as partnerships are generally exempt from Alaska's corporate income tax.
A non-oil and gas corporation computes its tax liability based on the federal taxable income of its water's edge combined report (a measure
of income earned in the United States), with Alaska adjustments - for example, Alaska tax code allows special treatment for certain
dividends and royalties received from foreign corporations.
U.S. income is apportioned to Alaska based on three factors - sales, property, and payroll. Alaska taxable income is determined by
applying the apportionment factor to the corporation's modified federal taxable income. CIT for oil and gas corporations is calculated
differently and reported separately in Chapter 6.
Generally, a corporation is subject to tax on its current-year Alaska taxable income and any net operating losses may be carried-forward
indefinitely to offset future tax liabilities. However, as part of the federal CARES Act passed in 2020, corporations could "carry back" net
operating losses from tax years 2018, 2019, and 2020 up to five years and receive refunds for previous federal taxes paid. Alaska adopts
most provisions of the federal corporate income tax code by reference, including the provision allowing the five-year carry back for net
operating losses from tax years 2018, 2019, and 2020. Thus, this carry back provision applied to Alaska corporate income tax as well. For
tax years 2021 and beyond, corporations are once again only able to carry forward net operating losses.View entire presentation