The Wrangell sentinel., 1945-02-16
Of Ter. Income
 TaXMeaSure

Digest Of Senate Bill No. 12. AL aska Income Tax Bill.
 Senate Bill No. 12. which is designated as the Alaska Income Tax Bill" proposes a net income tax applicable to individuals. cor porations and banks. In all essen tial features it is patterned after and follows as nearly as possible the federal income tax law provi- Sions. The tax rates proposed and the amount Of personal exemptions however. differ substantially from those of the federal law. While the bill is similar in form to the income tax bill which was proposed to the Alaska legislature in l94I. Senate Bill No l2 is substantially different from the 1941 bill
 AS to banks and corporations, the bill proposes a flat rate of 1 per cent applicable To all net income derived from business carried on in the Territory of Alaska.
 As to individuals. the rates vary from ? percent on the first S2,000 of net income to 4 percent net in- come of $l0,O00 or more. Up to SI0.o00 of net income the rates are exactly one tenth of the surtax rates under the federal law now in effect As to all over Sl0,000. the rate is 4 percent.
 Personal Exemption
 In the case of individuals, a per sonaI exemption equal to $l,000 is allowed to the taxpayer with an additional $1.000 each for his wife and each dependent This is to be contrasted with an exemption Of $500 each for the taxpayer, his wife and dependent under the fed eral law. It means that in the case of a single person without depeu- dents there is no tax liability un. less his net income exceeds Sl000 per year. In the case of a husband l. and wife with TWO dependents . there would be no territorial tax unless the net income exceeds ! $400O
 Like the federal law in deter mining his net income each person . is entitled 10 take a standard de- ! duction equal To 10 percent of his | adjusted gloss income, but not ln | excess of $500. This means h | under the ter. Ijo.Ia tax person !. need not keep records of taxes, in- ! tereSt. combinations, medical e&- ! beus.s. rtr. paiu in order to obtain 1. deductions For example a person .r,c,nlt.E s-s annual income u entitled To $-50 as deduction ! WnetaeI or uat actually spent ane : whether or n.t he has kept records. [ His lie .u.o...e is therefore not | more t..al .--5s. If he has spent | more Chan -.8 on deductible items | he may al#o e,r to obtain full | amount o. deductions by showing | them in deta on his return.
 The territorial bal also contains table showing the exact amount | of tax on any amount Of income up | to $1O.O00 This taOle permits a | short form of return which requires that the taxpayer show only his | adjusted gross income for the year. The amount of tax due would be | shown in the table without the | necessity for any additional figures or computations. Under the table | the taxpayer would automatically i receive the benefit of the standard | 10 percent deduction and the total number of exemption credits to which he is entitled.
 Withholding Tax
 The bill also proposes the with holding of tax upon wages as earned and provides tables for the use of employer in determining the exact amount to be withheld what ever the number of exemption ere dits claimed by the employee may | be. The withholding tables are so l constructed that the actual amount of tax due will be withheld. A spe- cial tax on seasonal workers is also | proposed. This tax would be with held by employers and no return would be required of the seasonal worker
 The bill proposes to repeal most of the territorial license taxes now levied on businesses and profes- eiope iDcludinU tho ayistinP SalmDn