Alaska

Opinion: Worried about Alaska’s budget crisis? Fix this obvious tax loophole.

Published

8 months ago

March 28, 2025

Opinion: Worried about Alaska’s budget crisis? Fix this obvious tax loophole.

The trans-Alaska pipeline winds through the landscape alongside the Delta River near Castner Glacier in March 2024. (Loren Holmes / ADN)

Alaska is facing a persistent budget deficit. The Anchorage Daily News recently reported that without additional revenue, the state could face a shortfall of over $650 million in the next two fiscal years. This isn’t a new problem; Alaska’s spending has exceeded its revenue almost every year since 2012. Alaska is also the only state that receives more funding from the federal government than it does from all of our internal revenue combined. Our legislators will have to choose between devastating cuts to education and other social services, imposing new taxes on Alaskans, repurposing PFD dividends, or fixing tax loopholes that benefit out-of-state billionaires.

The best choice is obvious. The Alaska Constitution instructs the Legislature to ensure that Alaskans get the “maximum benefit” from the development of our natural resources. Yet a special class of businesses — S corporations — has made billions from our public lands without paying state income taxes. The S corporation structure allows these companies to enjoy a single layer of tax through a personal income tax, like private businesses, while protecting themselves from liability, like a traditional corporation. In most states, S corporation owners pay a state personal income tax on their earnings. Other states without a personal income tax, like Texas, impose a franchise tax on S corporations. Alaska is one of only two states in the country that taxes traditional corporations but not S corporations (the other state, Florida, brings in revenue with a sales tax instead).

Fortunately, the Legislature appears poised to correct the S corporation tax loophole. Senate Bill 92 would impose an income tax on oil and gas S corporations operating in Alaska — traditional corporations already pay income taxes in Alaska. The bill would make a meaningful dent in our state budget deficit; the Department of Revenue estimated that SB 92 would bring more than $100 million per year through 2030. That money could fund public schools and critical infrastructure.

Instead, we are giving that revenue away to a billionaire in Texas. In 2020, affiliated S corporations, Hilcorp and Harvest Midstream, acquired all of British Petroleum’s Alaska assets — including its nearly 50% share of the Trans-Alaska Pipeline System. Tens of millions in annual corporate income tax revenue from BP disappeared. While we can’t recover that lost revenue, we can modernize Alaska’s tax code to accommodate the increasing proportion of S corporations in our oil and gas industry.

Alaskans should also be frustrated by the way that the S corporation loophole diverts tax revenue from the state to the federal government. S corporations, like anyone else, write off state income taxes on their federal tax returns. Alaska’s nonsensical tax code means that S corporations pay more income taxes to the federal government while the state gets no revenue at all.

Oil and gas interests have suggested that the state will somehow bring in more revenue by not taxing S corporations. This is a misguided argument that has been proven wrong throughout Alaska’s history. It is foolish to assume that a large company with operations across the country would reinvest extra profits in Alaska. That company is just as likely to transfer the capital to projects in the Lower 48 or simply enrich its billionaire owner. The Legislature can guarantee investment in Alaskans by taxing S corporations and using the revenue to fund public services.

It is equally silly to argue that imposing an income tax would be unfair to S corporations. It is unfair that traditional corporations pay state income taxes while S corporations don’t! Nearly every other state in the country — red or blue — creates a level playing field for business by taxing S corporations. Changing Alaska’s tax code to reflect the national consensus is foreseeable and common sense.

An overwhelming majority of Alaskans in every region of the state — 77% on average — want Hilcorp to pay a state income tax. This unusual consensus reflects the clear right choice on this issue. Do the state legislators representing you care about fiscal responsibility, tax parity, and addressing our budget deficit? Consider giving them a call to find out and to express your support for SB 92.

Catherine Rocchi is the regulatory lead for the Alaska Public Interest Research Group, a nonprofit consumer advocacy group. She holds a bachelor’s degree from Dartmouth College, a law degree from Stanford Law School and a master’s from the Stanford School of Earth. Before joining AKPIRG, she worked as a law clerk at the Alaska Supreme Court.

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The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.

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Alaska

Opinion: When $100 stays home: Shopping small strengthens Alaska

Published

14 hours ago

November 28, 2025

Press Room

Opinion: When 0 stays home: Shopping small strengthens Alaska

A pedestrian walks past a pair of Christmas trees in Town Square Park on Thursday afternoon, Dec. 10, 2020. (Bill Roth / ADN)

The holiday season is a time of giving, but for many Alaskans, this season means tightening belts instead. Between rising costs, inflation and the lingering impacts of tariffs and supply chain disruptions, burdens may feel heavier than usual.

That’s exactly why it matters where we spend what we can, keeping dollars local.

This Small Business Saturday, on Nov. 29, the Alaska Small Business Development Center, Anchorage Downtown Partnership, Anchorage Chamber of Commerce, Visit Anchorage and the Small Business Administration are inviting Alaskans to take a small but meaningful step: pledge to spend at least 10% of your holiday gifting with local businesses.

Because in Alaska, sticking together isn’t just something we say, it’s a way of life.

Consider a $100 purchase. If bought from a major online retailer or national chain, about $22 stays in Alaska — mostly covering shipping, logistics and applicable local wages. The rest flows to corporate headquarters, distant warehouses and out-of-state shareholders.

Spend that same $100 at an Alaskan-owned business and about $63 stays here at home. It pays employee salary and benefits, allowing them to save for college or a first home, and to stay and grow their careers here. It supports local manufacturers and artists, suppliers and service providers. It funds youth sports, sponsorships and nonprofit donations. One purchase. Multiple local impacts.

The visible difference is keeping our main streets alive and our neighbors employed.

Buy Alaska: Go local first

We know shopping local isn’t always easy. Prices can feel higher, and options can be harder to find, especially across such a vast state.

That’s why BuyAlaska.com was created. This free online directory connects shoppers with more than 1,200 Alaskan-owned businesses across our great state. You can search by product, service or location, from Utqiagvik to Ketchikan, and discover just how many local options already exist. BuyAlaska also helps businesses find local suppliers through the B2B Exchange, keeping even more money circulating among Alaskans.

The 10% shift

Redirecting just 10% of your regular purchases to Alaska-owned businesses could keep hundreds of millions of dollars in our economy. That money fuels paychecks, keeps doors open and gives small-business owners breathing room to weather rising costs and invest in growth.

Before you click “add to cart,” check BuyAlaska.com. If there’s a local option, choose it. If not, that’s OK, just look for the next opportunity. Every small shift adds up.

Alaska’s entrepreneurs operate in one of the most complex business environments in the country: high shipping costs, unpredictable seasons and supply chains that stretch across oceans. Yet they continue to adapt, innovate and show up for their communities.

They’re not just business owners, they’re our neighbors, parents at the hockey rink, and volunteers at local schools. Nearly 140,000 Alaskans work for small businesses. When they thrive, so does Alaska.

Your economy, your choice

Downtown Anchorage will kick off Small Business Saturday with local deals, community events and the annual Holiday Tree Lighting, a bright start to the season. But the opportunity to support each other extends far beyond one weekend.

Leave a positive review on a small business you frequent. Share your favorite local finds. Take the 10% Challenge and encourage others to do the same.

Our state’s economy grows stronger when we grow together. Every purchase is a vote for the kind of community we want, one that is resilient, connected and uniquely Alaskan.

This Small Business Saturday, and every day, you have the power to help Alaska thrive, one meaningful choice at a time.

Kendra Conroy is acting state director and associate state director, UAA Alaska SBDC.

Gretchen Fauske is director of Special Programs & Strategy, UAA Alaska SBDC.

Radhika Krishna is executive director of the Anchorage Downtown Partnership.

Julie Saupe is president and CEO of Visit Anchorage.

Kathleen McArdle is president and CEO of the Anchorage Chamber of Commerce.

• • •

The Anchorage Daily News welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.

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Alaska

The Sun

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1 day ago

November 28, 2025

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Alaska

Opinion: Typhoon Halong’s aftermath revealed Alaska at its best

Published

2 days ago

November 27, 2025

Press Room

Opinion: Typhoon Halong’s aftermath revealed Alaska at its best

Kipnuk resident Garrett Kashatok holds 11-month-old Shameka while attending a town hall for people displaced by ex-typhoon Halong at Bettye Davis East High School on Wednesday evening, Nov. 12, 2025. (Bill Roth / ADN)

As we enter this holiday season, it is important to recognize and give thanks to the countless Alaskans who helped in Western Alaska’s emergency response to Typhoon Halong. In doing so, you helped preserve the dignity of your fellow Alaskans in need.

At the Yukon-Kuskokwim Health Corp. (YKHC), we had medical, behavioral health, construction and remote maintenance teams who worked very long hours and slept in affected villages. We shipped tens of thousands of pounds of critical supplies throughout the region. We set up and managed the Bethel shelter, its travel, meal preparation, laundry and cleaning operations. In future months, we will continue to lead water and sewer rebuilding efforts.

Since October, the daily local/state/federal emergency operations center has been hosted by YKHC at the Bethel hospital. YKHC helped lead and coordinate the local emergency operations center with other local agencies until the beginning of November and has since transitioned out of that role. YKHC assisted the Alaska National Guard and Coast Guard and evacuated more than 100 residents from affected villages to safe places of their choosing with more than 50 YKHC charter flights. We shipped more than 22,000 bottles of water, 12,000 ready-to-eat meals and other supplies throughout the region. Most of that was accomplished within the first five days after the storm.

We hosted Sen. Dan Sullivan, Sen. Lyman Hoffman, Rep. Nellie Jimmie, Speaker Bryce Edgmon, and other state and federal officials at YKHC for disaster coordination meetings. The state emergency operations center moved more than 600 evacuees out of the shelters to hotels and other noncongregate lodging by Oct. 31 — which for disasters, must be in record time. Hundreds more were taken in by family members from around the region, Anchorage or beyond.

I thank all 1,600 YKHC employees who helped survivors of Typhoon Halong. Your dedication and devotion toward achieving our mission and vision is applauded.

A special thank you to the Alaska National Guard and Coast Guard for their heroic and life-saving missions during the storm and those that continue today in order to help ready survivors’ homes for winter. The professionalism, urgency and compassion shown by the Guard, President Trump, Gov. Dunleavy, state of Alaska emergency operations center, FEMA, the Alaska Divisions of Forestry and Transportation, American Red Cross, AVCP, AVCP RHA, City of Bethel, Lower Kuskokwim School District, Samaritan’s Purse, Team Rubicon, World Kitchen, airline/cargo operators, local churches and businesses, the Municipality of Anchorage and many others is truly commended.

While recovery and repatriation will continue for months and years, if Alaskans continue to act with the same resolve as we did with this emergency response, more can be accomplished in the future.

Although many lost much during this tragedy, each of us still has much more to be thankful for during this holiday season.

Dan Winkelman is president and CEO of the Yukon-Kuskokwim Health Corp.

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