The Daily Alaska empire., 1941-02-14
INCOME TAX BILL LANDS
 IN SENATE
96-Page Measure Covers Both Individuals and
 Corporations

A 06-page bill setting up an Alaska net income tax on both individuals and corporations was introduced in the Territorial Senate this morning as Senate Bill No. 10 (remember the number) by Senators Don Carlos Brownell, Hjalmar Nordale and N. R. Walker, as members of the Com mittee on Taxation.
 Repeating of g miscellaneous taxes and the equivalent of repeal (by allowing offsets against income tax payments) of 40 Federal license taxes is provided in the bill.
 1 Short title of the bill is the Al aska income tax act" It was drawn by Prof. Albert Harsch of the Uni versity of Washington Law School, who has spent several months here studying taxation problems. He has been drafting similar measures for the State of Washington for the past 10 years.
 Preamble and Index
 The bill even has preamble of six "whereases" referring to the present Alaska tax structure as a survival of the earliest frontier days and as patchwork" of miscellan- eous taxes of every kind and descrip- tion, long since outmoded, and grow ing steadily less appropriate The present structure is called inequit- able, burdensome and arbitrary.
 Growth of the Territory, the pre- amble states, requires the enact iment of an effective and just tax program to satisfy existing needs, correct economic abuses peculiar to Alaska to foster the further expan- sion of Territorial activities.
 ( In general, the bill follows out two-thirds of the tax recommenda- tions included in the Governors mes sage, the other one third being a general property tax, for which no bill has yet been introduced.
 Applies to This Year
 If passed the bill will apply to the taxable year 1941 and succeed ing taxable years.
 The act applies to individuals both resident and non-residents, estates trusts, corporations. and banks, both national and Territorial. The tax rates proposed on individuals begin at two per cent and increase one half per cent for each additional thousand dollars of taxable income until they reach a maximum of five per cent for incomes in excess of six thousand dollars of taxable .income.
 Non-residents receive no exemp- ton. For residents there is an ex- emption of one thousand dollars for single persons, two thousand dollars for married persons and four hun dred dollars for each dependent. The tax rate on estates and trusts is the same as on individuals The tax rate proposed on corporations and banks is flat four per cent on the net income
 A commission to be known as the Alaska Tax Commission would be created by the bill. It consists of the Territorial Treasurer, Auditor and Attorney General, with the Treasurer as Chairman The Tax Commission will appoint the neces- sary employees to help in the ad- fministration of this act, including an executive official to be known as . the Supervisor of Taxation
 ! On Net Income
 The tax is upon net income, i. e gross income less the deduction specifically allowed. Gross income : is defined as it is in the Fedora law. The gross income of residen !. individual includes income from ev cry source whatever. Gross incom of a non-re resident individual, banl , or corporation, includes only tha :. derived from sources within the Ter ritory. While it may appear tha gross income" is easily determined in fact many complex problems, re quiring detailed statutory provision. are presented The Federal law ha r been followed as nearly as possible ] but some variations are here requir ! ed because of the limited geographi l area to which the tax applies an 9 the later effective date of the act
 The same tyes of gross income ar excluded and the same deductions
 for business expense, interest, taxe' 3 losses, bad debts, depreciation, con , tributions. etc. are permitted a :. under the Federal aw. In the cas of depletion, however, limitatio } upon the total amount allowed, no found in the Federal law, is pro
 posed. Capital gains are treated a