Personal Service Corporations

The Alaska Department of Revenue is allowing the use of the graduated tax rates for personal service corporations.  The State has lost several cases on appeals regarding the use of a flat 9.4% tax on personal service corporate income. (Send thanks to Kevin Walsh in Fairbanks.)  Michael Williams of the tax division of the Alaska Department of Revenue confirmed the state has lost on several appeals.  At this time the tax division has not made a decision on what they are going to do.  In the meantime, if you file an Alaska Corporation Tax Return for a personal service corporation, you can use the graduated rates.  The State of Alaska will accept it.