Bill would provide tax credits for salmon industry

Posted: Tuesday, April 01, 2003

JUNEAU (AP) -- Salmon processors could get state tax credits for investing in new equipment under a bill that passed the House on Monday.

House Bill 90 would allow up to a 50 percent credit on fisheries business taxes for investments in equipment, if the equipment adds value to the salmon processed or if it creates a product out of salmon waste.

Advocates said the measure will help Alaska's struggling salmon industry, which has faced stiff competition from farmed salmon from countries such as Chile.

''We need new investment in this industry and this is a way to get it and get it now,'' said Rep. Ralph Samuels, R-Anchorage.

Opponents said the state cannot afford to give up taxes at a time when lawmakers are discussing raising money from Alaska residents through increased gasoline taxes and other measures.

''These tax giveaways put us deeper and deeper in the hole,'' said Rep. Eric Croft, D-Anchorage.

The tax credits would apply on investments made between Jan. 1, 2003, and Dec. 31, 2005.

Rep. Lesil McGuire, R-Anchorage, asked why the measure was retroactive.

Rep. Paul Seaton, R-Homer, said the bill was a recommendation of the Joint Legislative Salmon Industry Task Force, and some processors are going ahead with investments now, making a calculated risk that the measure will pass.

The Department of Revenue estimates the state would need to spend about $92,000 on personnel to implement the law and make sure credits aren't awarded improperly.

The department said it could not estimate how much the state would lose in taxes without knowing how many people would take advantage of the law. The loss could range from zero to the entire amount of tax that would have been collected by the state, according to a department fiscal note.

The state estimates it will collect $5.6 million in fiscal year 2003 in fisheries business taxes, with half of that going back to municipalities.

The tax credit would come only from the state's 50 percent share of tax collections. The municipalities would bear none of the burden.

The bill passed 29-6, with Reps. Les Gara, D-Anchorage; Carl Gatto, R-Palmer; Bev Masek, R-Willow; Bill Stoltze, R-Eagle River; Beth Kerttula, D-Juneau; and Croft voting against it.

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