As the state of Alaska stares down a projected $536 million deficit over the next two fiscal years, legislators are scrambling for solutions to avoid yet another budget crisis. Among the clearest and most straightforward answers on the table is Senate Bill 92 (SB 92), introduced earlier this year by Sen. Rob Yundt (R-Wasilla).
SB 92 aims to close a glaring loophole in Alaska’s tax code—one that allows pass-through entities, known as S corporations, to avoid paying state corporate income taxes. While most large corporations contribute to state revenues through corporate income taxes, oil and gas S corporations, such as Hilcorp, do not pay a dime in state income tax under current law.
This legislation, if passed, would impose a tax on S corporation income over $5 million, generating an estimated $100 million per year in much-needed revenue for the state. That money could be invested in critical public services and infrastructure, including electrical and energy upgrades that are vital for Alaska’s long-term energy security.
Closing the S corporation loophole is not a radical proposal—it is simply a matter of fairness. When Sen. Yundt first introduced SB 92 on February 19, he was direct in his reasoning: “I believe everybody should be treated the same. That is all this is for me.” However, he later withdrew his support for the bill—speculatively under pressure from the oil and gas industry, which has aggressively lobbied against it.
Despite industry claims that taxing S corporations would harm business, there is no evidence to suggest that this tax break has stimulated job creation or investment in Alaska. In fact, S corporations already pay income taxes in every other state except Alaska, making our state an extreme outlier. A 2021 Fiscal Working Group recommended closing this loophole as a common-sense measure to stabilize Alaska’s budget.
Continuing to allow this loophole is not indicative of public will, and legislators have a responsibility to pursue this option. SB 92 enjoys widespread bipartisan support, demonstrating that Alaskans recognize the necessity of closing this loophole and ensuring fair taxation.
A recent survey from Data for Progress asked Alaska voters if they support or oppose changing the state’s tax structure so that Hilcorp, a major oil and gas producer, would pay state corporate income tax. The results were decisive:
- 77% of Alaskans support requiring Hilcorp to pay corporate income tax, while only 17% oppose it.
- Two-thirds of Republicans (66%) support this proposal.
- This proposal enjoys broad popular support in every region of Alaska. Even in the Kenai Peninsula, where Southcentral Alaska’s natural gas shortage looms and Hilcorp is the primary producer, voters support the tax by a +50-point margin. Support is even stronger in every other part of the state.
The Path Forward
Alaskans can no longer afford to subsidize oil and gas companies at the expense of our schools, infrastructure, and essential services. If legislators are serious about addressing the state’s ongoing fiscal crisis, they must prioritize policies that bring in fair and sustainable revenue—not continue to bow to industry influence.
SB 92 is a practical and necessary step toward ensuring that Alaska’s wealth is reinvested in its people and its future. Now is the time to speak up. On April 2nd in an exciting showing of bipartisanship this bill advanced to the Senate Finance Committee with a 5-2 vote! Call your legislators and urge them to support SB 92.
Senate Finance Committee
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Lyman Hoffman 907-465-4453, Senator.Lyman.Hoffman@akleg.gov
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Donny Olson 907-465-3707, Senator.Donald.Olson@akleg.gov
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Bert Stedman 907-465-3873, Senator.Bert.Stedman@akleg.gov
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Kelly Merrick 907-465-3777, Senator.Kelly.Merrick@akleg.gov
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James Kaufman 907-465-4949, Senator.James.Kaufman@akleg.gov
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Mike Cronk 907-465-4527, Senator.Mike.Cronk@akleg.gov
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Jesse Kiehl 907-465-4947, Senator.Jesse.Kiehl@akleg.gov