Alaska Corporation
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Upon signing the regulatory flexibility bill Governor Frank Murkowski said, “HB 33 is a step in the right direction to ensure the small business community in Alaska has a voice in crafting the regulations that affect their ability to make a living. This in turn will mean that agencies specified in the bill will have to consider the adverse impacts to small business before promulgating regulations. I am encouraged by this move to help return common sense to the regulatory process affecting a very important sector of our economy.”
Alaska Corporation advantages and disadvantages - Articles of Incorporation must be drafted and submitted to the Alaska Secretary of State, Corporations Division. Once articles of incorporation have been successfully filed, your Alaska Corporation has been formed and this begins its existence as a Alaska corporate entity.
Should I Incoprorate in Alaska ?
A corporation, chartered by the state in which it is headquartered, is considered by law to be a unique entity, separate and apart from those who own it. A corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes.Advantages and Disadvantages:
Alaska Corporation
Advantages of a Corporation
- Shareholders have limited liability for the corporation's debts or judgments against the corporations.
- Generally, shareholders can only be held accountable for their investment in stock of the company. (Note however, that officers can be held personally liable for their actions, such as the failure to withhold and pay employment taxes.)
- Corporations can raise additional funds through the sale of stock.
- A corporation may deduct the cost of benefits it provides to officers and employees.
- Can elect S Corporation status if certain requirements are met. This election enables company to be taxed similar to a partnership.
- A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 - $75,000; 34% tax on income from $75,001 - $100,000; 39% tax on income from $100,001 - $335,000; and 34% tax on income over $335,000.
- A sole proprietor who filed a federal income tax return under the status of married, filing jointly, would pay 15% federal income tax on taxable income up to $35,800; 28% tax on income from $35,801 to 86,500; and 31% tax on income over $86,501.
Disadvantages of a Corporation
- The process of incorporation requires more time and money than other forms of organization.
- Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations.
- Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible form business income, thus this income can be taxed twice.
Federal Tax Forms for Regular or "C" Corporations
- Form 1120 or 1120-A: Corporation Income Tax Return
- Form 1120-W Estimated Tax for Corporation
- Form 8109-B Deposit Coupon
- Form 4625 Depreciation
Alaska’s 2011 Business Tax Climate Ranks 2nd
Alaska ranks 2nd in the Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. The ranks of the nearest states were as follows: Hawaii (22nd), Oregon (14th), Washington (11th) and California (49th).Alaska's Individual Income Tax System
Alaska levies no individual income taxes, joining six other states with the same policy: Wyoming, Washington, Nevada, Florida, Texas and South Dakota.Alaska's Corporate Income Tax System
Alaska's corporate tax structure consists of ten separate brackets with a top rate of 9.4% kicking in at an income level of $90,000 the 4th highest rate in the nation. In FY2008, Alaska's state-level corporate tax collections (excluding local taxes) reached $1,433 per capita, which ranked highest in the nation.Alaska Sales and Excise Taxes
Alaska levies no general sales or use tax on consumers, joining Delaware, New Hampshire, Montana and Oregon as the only other states with no sales tax. At the local level, Alaska collected $717 per person in general and selective sales taxes in 2007. Alaska's gasoline tax stands at 8.0 cents per gallon (lowest nationally). Alaska's cigarette tax stands at $2.00 per pack of twenty (10th highest nationally). The gasoline tax was adopted in 1946 and the cigarette tax in 1949.Alaska Property Taxes Comparatively High
Alaska is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Alaska's localities collected $1,358.24 per capita in property taxes in fiscal year 2006, the latest year for which the Census Bureau has published state-by-state data. At the state level, Alaska collected $80.94 per capita during FY 2006, making its combined state/local property taxes $1,439.18 per capita, ranked 12th highest nationally.Federal Tax Burdens and Expenditures:
Alaska is a Beneficiary State Alaska taxpayers receive more federal funding per dollar of federal taxes paid compared to the average state. Per dollar of Federal tax collected in 2005, Alaska citizens received approximately $1.84 in the way of federal spending. This ranks the state 3rd highest nationally and represents a large rise from 1995 when Alaska received $1.21 per dollar of taxes in federal spending (then ranked at 17th highest nationally). The nearest states and the amount of federal spending they received per dollar of federal taxes paid were: Hawaii ($1.44), Oregon ($0.93), Washington ($0.88) and California ($0.78).Home | Alaska Corporation Advantages and Disadvantages | Site-Map