Alaska Republican Gov. Mike Dunleavy issued his ninth veto of the 2025-2026 Legislature, blocking a bipartisan bill that would have extended corporate income taxes to online businesses to fund reading and job-training programs at public schools.
Senate Bill 113, sponsored by Anchorage Democratic Sen. Bill Wielechowski, would have applied the state’s corporate income tax law to cover online sales by Outside companies and would have raised between $25 and $65 million annually. Wielechowski and other backers noted that because the companies’ home states are already collecting those corporate income taxes, it wouldn’t have changed what Alaskans pay.
More: Legislature approves first tax in years as Alaska’s financial picture turns grim
A bipartisan coalition of legislators supported the measure, with the primary attraction being that the funds would be allocated toward K-12 education in Alaska. The money would have gone toward reading incentive grants for K-12 schools that are showing improvements in reading scores, as well as career and technical programs. Both the job-training and merit-based reading grants are things that conservatives have typically favored.
“SB 113 was a common-sense, bipartisan solution to help close our revenue gap without costing Alaskans or Alaska businesses a penny,” Wielechowski said in a prepared statement. “The Governor had the opportunity to stand with Alaska families, students, and communities – but instead, he chose to side with tech corporations that profit from Alaskans and utilize our infrastructure, while paying nothing back to our state.”
In technical terms, the bill would have opted Alaska into the Multistate Tax Compact, which enables states to collect income taxes from businesses based outside their borders. Thirty-six other states have opted into the compact, allowing the collection of income taxes based on the market where they’re doing business. Because Alaska is more of an importer than an exporter with online services, it was expected to be a net positive for the state.
Senate Bill 113 passed with a 16-4 vote in the Senate and a 26-14 vote in the House. The combined 42 votes are two more than the 40 that legislators would need to override the governor’s veto. While legislative vetoes are rare, they’ve become more commonplace as legislators have grown increasingly frustrated with the governor’s leadership.
Also: Legislators’ pair of veto overrides was a truly remarkable rebuke of Dunleavy
Just this year, legislators have successfully overridden the governor’s veto three times. That included an exceedingly rare budget veto override, which requires a higher bar of 45 votes, when they overrode his veto of public school funding from the state’s budget.
Legislators will have the opportunity to override the governor’s veto when they return to session in January, or at a special session if one is called earlier.
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Bluesky.
