AlaskaGas project owners would pay a tax based on gas volume
Qualifying gas project owners would pay a gas-volume tax if a project partner first pays the state, while certain oil and gas businesses would pay tax on Alaska income.
What it does
Qualifying gas project owners would pay a tax based on gas volume, but only after a project partner pays the state at least $50 million and owners make required yearly payments.
Certain business entities earning Alaska income from oil and gas would pay a graduated state tax, with higher rates on higher taxable income.
Oil producers would pay an additional 30 cents per barrel on top of other oil taxes, and could not use tax credits to reduce the charge.
Argument forIf lawmakers appropriate money, gas project tax receipts could help route communities and nearby boroughs pay for construction impacts and local services.
Argument againstGas project owners could face large upfront and yearly payments, and missing a required yearly payment could suspend the volume tax and bring property taxes back for a year.
More detail
Owners of qualifying gas project property would pay a tax based on the amount of gas it moves or processes. It covers qualifying gas pipelines, gas treatment or carbon capture facilities, and liquefied natural gas plants that are major parts of an Alaska liquefied natural gas project. The tax covers major components of an Alaska liquefied natural gas project built on or after January 1, 2026, and owned by a state instrumentality or an affiliated entity that includes one. The state must receive a one-time payment of at least $50 million by January 1, 2038, from an entity partnered with the Alaska Gasline Development Corporation; the tax provisions take effect the day after receipt. Owners must also pay at least $30 million in each of the next five calendar years after the initial payment. If an owner misses a required yearly payment, the volume tax is suspended for the following calendar year, and property taxes apply during that year. Spur lines that branch off to serve a local community or utility system are excluded from the volume tax; related property generally remains subject to property taxes. The tax applies after covered property starts commercial operations. These tax provisions take effect the day after the state receives the required one-time payment.
Certain business entities would pay state tax on income from oil and gas activities in Alaska. It covers specified business entities with Alaska income tied to oil or gas production and related activities. The tax applies to specified entities, such as partnerships and limited liability companies, with income from oil or gas production, transportation, treatment, or processing in Alaska; natural persons are excluded. The rates are graduated: taxable income below $1 million is untaxed, and the top rate is 9.4 percent on income above $5 million. Corporations already subject to the state corporate income tax, businesses in the same unitary group as those corporations, and public corporations are excluded or exempt. The tax applies to tax years beginning on or after January 1, 2026, and the bill makes it retroactive to that date.
Oil producers would pay an additional surcharge for oil produced in Alaska. It applies to producers and oil from leases or properties in Alaska, except oil whose ownership or right is exempt from taxation. The surcharge is 30 cents per barrel, on top of other oil taxes and surcharges. Tax credits under the chapter cannot reduce it. Oil whose ownership or right is exempt from taxation is excluded. The surcharge provisions take effect July 1, 2026. Monthly payments cover oil produced during the prior month.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- May 19(S) Heard & HeldLatest
- May 19(S) FINANCE at 01:30 PM SENATE FINANCE 532
- May 19(S) REFERRED TO FINANCEMinor
- May 19(S) FN6: (REV)
- May 19(S) FN5: (DNR)
- May 19(S) FN4: (CED)
- May 19(S) FN3: (CED)
- May 19(S) AM: CLAMAN, KAWASAKI, MYERS
- May 19(S) NR: RAUSCHER
- May 19(S) DP: GIESSEL, DUNBAR, WIELECHOWSKI
- May 19(S) RES RPT CS 3DP 1NR 3AM NEW TITLE
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- Mar 23(S) RES WAIVED PUBLIC HEARING NOTICE, RULE 23
- Mar 20(S) GOVERNOR'S TRANSMITTAL LETTER
- Mar 20(S) FN2: (REV)
- Mar 20(S) FN1: ZERO(CED)
- Mar 20(S) RES, FIN
- Mar 20(S) READ THE FIRST TIME - REFERRALSIntroduced
Taxes & BudgetEnvironment & Energy