Gov. Sean Parnell was in Petersburg today and signed into law two pieces of legislation important to fish folk:
Senate Bill 163 revises the Fishermen's Fund, a kind of state insurance program for commercial fishermen who are injured or fall ill on the job. The new law increases the claim allowance from $2,500 to $10,000. The Fishermen's Fund is what's known as a "payer of last resort." That means, for example, that the fund can pay for care in the case of an injured fisherman who is underinsured. The prime sponsor of SB 163 was Sen. Joe Paskvan, D-Fairbanks.
House Bill 344 extends the salmon product development tax credit by four years, through 2015. This tax break has been around since 2003. It was among steps the state took to help the depressed salmon industry better compete with fish farmers. The goal is to encourage processors to add value to the salmon. Equipment for filleting fish, removing pinbones and packing salmon in convenient pop-top cans are examples of investments eligible for the tax credit. The new law adds ice machines to the list of qualified investments. Processors already have earned several million dollars in credits, the Department of Revenue says. The prime sponsor of HB 344 was Haines Republican Rep. Bill Thomas, himself a commercial fisherman.
Showing posts with label tax break. Show all posts
Showing posts with label tax break. Show all posts
Friday, June 25, 2010
Tuesday, February 2, 2010
A touchy tax question
After a good deal of effort, Dockboss managed to land a copy of this fascinating letter to Alaska's senators, Lisa Murkowski and Mark Begich.
The letter, from the Joint Committee on Taxation, estimates how much tax revenue Uncle Sam would lose if Congress clarified the law to exempt certain income the state's six Community Development Quota companies generate through various business ventures.
The tax break would be a humdinger: $92 million to $124 million through the year 2019, the committee staff estimates.
Murkowski and Begich requested the estimate last spring.
Regular visitors know we touch on the subject of the CDQ program a good bit.
It's a unique federal initiative started in 1992 to vest western Alaska villages with shares of the lucrative Bering Sea commercial fish and crab harvests. Six nonprofit companies represent groups of villages and arrange to catch their "community quotas."
The CDQ companies have grown into strong contenders in Alaska's rich seafood industry.
Recently, some doubt has arisen as to whether the companies can continue to avoid paying taxes on parts of their expanding business portfolios.
Not long ago one CDQ company, Norton Sound Economic Development Corp., which represents villages in the Nome region, decided it does owe taxes. The company worked out an IRS settlement to pay taxes, penalties and interest of $10.2 million, an aide with Alaska’s congressional delegation said. It also paid $2.2 million in state tax.
Most other CDQ companies, however, don’t believe they owe taxes.
And why is that?
Also, why would Alaska's senators even think of sponsoring legislation to secure tax breaks for firms that, in 2008, tallied an impressive $139 million in combined revenue?
CDQ companies and congressional staffers argue that the CDQ companies aren't like regular corporations, which are driven mainly by a profit motive.
The CDQ companies have a much broader mission to supply the often disadvantaged villages they represent with jobs, scholarships, local construction and other benefits.
Taxing the CDQ companies, and potentially demanding many millions of dollars in back taxes, could hamstring a program that's done much good in bush Alaska, supporters say.
We'll have to wait and see whether the Alaska delegation can win the CDQ tax break.
This year, however, might be a difficult time to ask considering the enormous federal deficit the country is building to finance the economic stimulus, the war on terror and general budget needs.
One final note: Norton Sound has told the delegation it's "only fair" to receive a refund if the tax break passes.
The letter, from the Joint Committee on Taxation, estimates how much tax revenue Uncle Sam would lose if Congress clarified the law to exempt certain income the state's six Community Development Quota companies generate through various business ventures.
The tax break would be a humdinger: $92 million to $124 million through the year 2019, the committee staff estimates.
Murkowski and Begich requested the estimate last spring.
Regular visitors know we touch on the subject of the CDQ program a good bit.
It's a unique federal initiative started in 1992 to vest western Alaska villages with shares of the lucrative Bering Sea commercial fish and crab harvests. Six nonprofit companies represent groups of villages and arrange to catch their "community quotas."
The CDQ companies have grown into strong contenders in Alaska's rich seafood industry.
Recently, some doubt has arisen as to whether the companies can continue to avoid paying taxes on parts of their expanding business portfolios.
Not long ago one CDQ company, Norton Sound Economic Development Corp., which represents villages in the Nome region, decided it does owe taxes. The company worked out an IRS settlement to pay taxes, penalties and interest of $10.2 million, an aide with Alaska’s congressional delegation said. It also paid $2.2 million in state tax.
Most other CDQ companies, however, don’t believe they owe taxes.
And why is that?
Also, why would Alaska's senators even think of sponsoring legislation to secure tax breaks for firms that, in 2008, tallied an impressive $139 million in combined revenue?
CDQ companies and congressional staffers argue that the CDQ companies aren't like regular corporations, which are driven mainly by a profit motive.
The CDQ companies have a much broader mission to supply the often disadvantaged villages they represent with jobs, scholarships, local construction and other benefits.
Taxing the CDQ companies, and potentially demanding many millions of dollars in back taxes, could hamstring a program that's done much good in bush Alaska, supporters say.
We'll have to wait and see whether the Alaska delegation can win the CDQ tax break.
This year, however, might be a difficult time to ask considering the enormous federal deficit the country is building to finance the economic stimulus, the war on terror and general budget needs.
One final note: Norton Sound has told the delegation it's "only fair" to receive a refund if the tax break passes.
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