Lawmakers move rewrite of Walker’s fisheries tax bill

JUNEAU — A House fisheries committee advanced a rewrite of Gov. Bill Walker’s fisheries tax bill on Tuesday, diverting half of the potential revenue into a seafood marketing fund.

The bill, one of six proposed taxes on industries from Walker, could raise an additional $18 million in revenue by adding a one percent tax increase to portions of the commercial fishing industry.

The new language requires that one-half of the tax increase to be deposited into a newly created Alaska Seafood Marketing Fund. The legislature is also given the option to appropriate the marketing fund to the Alaska Seafood Marketing Institute.

Seafood marketing has been an ongoing fight in the state legislature. Both the House and the Senate cut the marketing institute’s budget in their respective versions of the state operating budget. Lawmakers said they wanted to see the institute become self-sustaining, with the Senate declaring that it wanted to see a plan by 2017 on how the institute would wean itself off of the general fund by 2019. The operating budget has yet to be finalized.

After the committee voted to move the bill to House Finance, chair Rep. Louise Stutes, R-Kodiak, asked for an update from the Alaska Department of Fish and Game and the Alaska Department of Revenue on taxing issues raised during public testimony on the bill.

Jerry Burnett, a deputy Revenue commissioner, said his department has added a tax auditor and will be examining tax records to account for price adjustment checks that fishermen sometimes get post-season to account for changes in the market price of fish.

Burnett said in an email after the meeting that at least one processor handles the price adjustments checks in such a way that the revenue isn’t notated correctly on tax returns.

“So we are not collecting all the tax due,” Burnett wrote. “As the concern has been brought up by a number of persons in the industry, the Department of Revenue will be focusing on this in future audits.”

Fish and Game Deputy Commissioner Kevin Brooks said the department has been working for several months on recalculating the value of six groundfish species including Yellowfin Sole and Atka mackerel. During public testimony, lawmakers heard that the fish were chronically undervalued.

Combined, they accounted for more than 513.2 million pounds of flatfish caught in 2014, according to Fish and Game data. However, fishermen paid taxes on the species that are based on a fraction of what they’re worth, Brooks said after the meeting.

One reason for the undervaluation of the fish is that they’re typically not processed in Alaska.

Commercial fisheries division operations manager Forrest Bowers said the groundfish trawlers are combined catcher and processor vessels that will offload fish onto a freighters bound for other countries. “They’re generally not fish that we see in the domestic market,” he said.

Brooks said the values of the fish are being recalculated and Fish and Game intends to send letters to affected fishermen within the next month. He said the values will be applied to 2015 taxes and will likely generate an additional $1 million to $2 million in tax revenue for the state annually.

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