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KNBA News - Gov. Bill Walker proposes statewide sales tax

by the Associated Press

Gov. Bill Walker is proposing a new, statewide 3-percent sales and use tax, an alternative to his proposal to reinstate a personal income tax.

The sales tax bill was among the measures introduced Monday, as lawmakers began a special session called by Walker to address the state's budget deficit. Certain items would be exempted from the sales tax, including groceries, wages and real estate purchases or rentals.

The Department of Revenue estimates the tax could generate $500 million annually.

Walker has proposed the use of Alaska Permanent Fund earnings and taxes to help address the deficit. A permanent fund bill passed the Senate but faltered in the House. Lawmakers so far have shown little interest in new or increased taxes. Gov. Walker says the state is in a fiscal crisis as a result of inaction by the state Legislature.