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This chapter may be cited as the Alaska Net Income Tax Act. Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered
Article 02. ALLOCATION AND APPORTIONMENT Repealed or Renumbered
Article 03. ADMINISTRATION Repealed or Renumbered Repealed or Renumbered The tax imposed by this chapter does not apply to individuals or to fiduciaries. However, an individual may file a return under this chapter in order to receive a tax credit under AS 43.20.013
. No tax may be levied and collected upon the net income of resident or nonresident individuals by a general law city or by a home rule city or any other political subdivision of the state. Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered A taxpayer who has income from business activity that is taxable both inside and outside the state or income from other sources both inside and outside the state shall allocate and apportion net income as provided in AS 43.19 (Multistate Tax Compact), or as provided by this chapter. Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered
Article 04. ENFORCEMENT Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered Repealed or Renumbered (a) The provisions of the Internal Revenue Code as now in effect or hereafter amended mentioned in this chapter are incorporated in this chapter by reference and have effect as though fully set out in this chapter.
(b) When portions of the Internal Revenue Code incorporated by reference as provided in (a) of this section refer to rules and regulations adopted by the United States Commissioner of Internal Revenue, or hereafter adopted, they are regarded as regulations adopted by the department under and in accord with the provisions of this chapter, unless and until the department adopts specific regulations in place of them conformable with this chapter.
(a) A taxpayer may apply as a credit against the tax levied under this chapter the exploration incentive credit authorized by AS 27.30.
(b) In a tax year in which a taxpayer applies against the tax levied under this chapter the exploration incentive credit authorized by AS 27.30, the commissioner shall require the taxpayer to submit the accounting of mining operation activities form required by AS 27.30.030(b).
In determining the source of a nonresident partner's income, effect may not be given to a provision in the partnership agreement that
(1) characterizes payments to the partner as being for services or for the use of capital;
(2) allocates to the partner, as income or gain from sources outside the state, a greater proportion of the partner's distributive share of partnership income or gain than the ratio of partnership income or gain from sources outside the state to partnership income or gain from all sources; or
(3) allocates to the partner a greater proportion of a partnership item of loss or deduction connected to Alaska sources than the partner's proportionate share, for federal income tax purposes of partnership loss or education generally.
(a) The department shall administer this chapter.
(b) [Repealed, Sec. 45 ch 113 SLA 1980].
(c) The department shall prescribe and furnish all necessary forms, and adopt and publish all necessary regulations in plain and concise language conformable with this chapter for the assessment and collection of the taxes imposed by this chapter. The department shall apply as far as practicable the administrative and judicial interpretations of the federal income tax law. The department shall also prepare a concise statement of the contents of the code sections referred to in this chapter for the information of the taxpayer and make them available to the taxpayer making a return.
(d) All money collected by the department under this chapter shall be deposited in the general fund of the state.
(e) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(a) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(b) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(c) In computing the tax under this chapter, the taxpayer is not entitled to deduct any taxes based on or measured by net income.
(d) [Repealed, Sec. 1 ch 98 SLA 1984].
(e) An affiliated group of corporations may make or the commissioner may require them to make a consolidated return for the taxable year in place of separate returns. For purposes of calculating the amount of tax payable by the group under a consolidated filing, 26 U.S.C. 1501 - 1552 (Internal Revenue Code), as amended, apply.
(f) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(g) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(h) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(i) A corporation which is a member of a group of unitary corporations which collectively has income from business activity taxable both inside and outside the state, or income from other sources both inside and outside the state,
shall determine its income from sources in this state by use of the combined method of accounting.
In a case where there is a refusal or neglect to pay a tax, including interest, penalty, additional amount, or addition to the tax, together with additional costs that accrue, the attorney general, at the request of the department may file an action in the superior court to enforce the lien of the state for the tax upon property and rights to property, real or personal, or to subject the property and rights to property owned by the delinquent, or in which the delinquent has a right, title, or interest to the payment of the tax. The action shall be commenced and pursued in the manner provided for the foreclosure of liens in AS 09.45.170
- 09.45.220, which are applicable to tax liens arising under this chapter to the extent that the provisions are not inconsistent with other provisions of this chapter. The action may be started at any time within six years after the lien arises. (a) As soon as practicable after a return is filed, the department may examine it and determine the correct amount of the tax. If an error is disclosed by the examination, the department shall so notify the taxpayer by first-class mail. The taxpayer may petition for redetermination of deficiency as provided in AS 43.05.240
.
(b) The same period of limitation upon the assessment and collection of taxes imposed under this chapter and the same exceptions to it shall apply as provided in 26 U.S.C. 6501 - 6503 (Internal Revenue Code). In the case of additional tax due by reason of a modification, recomputation, or determination of deficiency in a taxpayer's federal income tax return, the period of limitation on assessment commences from the date that the notice required in AS 43.20.030
(d) is filed, and if no notice is filed the tax may be assessed at any time.
(a) In this chapter, income from sources in the state includes
(1) income from real or tangible personal property located in the state;
(2) income of whatever nature from a business, trade or profession having a business situs in the state and compensation for services rendered in the state;
(3) income from stocks, bonds, notes, bank deposits, and other intangible personal property having a taxable or business situs in the state;
(4) rentals and royalties for the use of or for the privilege of using, in the state, patents, copyrights, secret processes and formulas, good will, marks, trade brands, franchises, and other property having a taxable or business situs in the state.
(b) In this section, income is from a source having a taxable or business situs in the state if it is derived from
(1) owning or operating business facilities or property in the state;
(2) conducting business, farming, or fishing operations in the state;
(3) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(4) a partnership which transacts business in the state;
(5) a corporation which transacts business in the state which has elected to file federal returns under subchapter S of the Internal Revenue Code;
(6) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(7) engaging in any other activity from which income is received, realized or derived in the state.
(c) The receipt of income derived solely from interest earned on property in the state does not alone establish a taxable or business situs in the state.
(a) Sections 26 U.S.C. 1 - 1399 and 6001 - 7872 (Internal Revenue Code), as amended, are adopted by reference as a part of this chapter. These portions of the Internal Revenue Code have full force and effect under this chapter unless excepted to or modified by other provisions of this chapter. However, nothing in this chapter or in AS 43.19 (Multistate Tax Compact) may be construed as an exception to or modification of 26 U.S.C. 883.
(b) For purposes of calculating the federal tax payable on personal holding companies provided for in the provisions of 26
U.S.C. 541 (Internal Revenue Code), the rate is 12.6 percent.
(c) For purposes of calculating the alternative tax on capital gains provided for in the provisions of 26 U.S.C. 1201
(Internal Revenue Code), the rate is 4.5 percent for corporations.
(d) Where a credit allowed under the Internal Revenue Code is also allowed in computing Alaska income tax, it is limited to 18 percent for corporations of the amount of credit determined for federal income tax purposes which is attributable to Alaska. This limitation does not apply to a special industrial incentive tax credit under AS 43.20.042
.
(e) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(f) For the purpose of calculating the alternative minimum tax on tax preferences provided for in 26 U.S.C. 55 - 59
(Internal Revenue Code), the tax is 18 percent for corporations of the applicable alternative minimum federal tax.
(g) For purposes of calculating the accumulated earnings tax as provided in 26 U.S.C. 531 (Internal Revenue Code), the rate is 4.95 percent of the first $100,000 of accumulated taxable income and 6.93 percent of accumulated taxable income in excess of $100,000.
(a) A resident individual is entitled to a tax credit not to exceed $100 for
(1) a contribution made in a calendar year to a person or organization for use exclusively
(A) for a political campaign for a candidate for
(i) President or Vice President of the United States, whether or not the candidate will be voted on in a primary election in Alaska;
(ii) United States senator from Alaska;
(iii) United States representative from Alaska;
(iv) governor or lieutenant governor of Alaska;
(v) the Alaska legislature;
(vi) delegate to an Alaska constitutional convention;
(vii) electoral confirmation as a judge or justice of a court in Alaska; or
(viii) municipal office in Alaska; or
(B) by a group seeking to influence the outcome of a ballot proposition or question in Alaska; and
(2) dues paid in a calendar year to a nonprofit organization organized primarily for the purpose of influencing elections in Alaska.
(b) A resident individual is entitled to a tax credit equal to 16 percent of the tax credit claimed by the individual on the federal income tax return of the individual for household and dependent care services necessary for gainful employment.
(c) The commissioner shall pay the amount of a tax credit allowed by this section to a resident individual who makes a return as provided in AS 43.20.012
. A credit under this section shall be paid in the manner provided in AS 43.20.030
(e) for the payment of refunds and payment may not be made without an appropriation for that purpose.
In this chapter,
(1) 'bank' means a financial institution including a national banking association;
(2) 'corporation' includes an association, joint-stock company, and an insurance company;
(3) [Repealed, Sec. 38 ch 168 SLA 1990].
(4) 'fiscal year' means an accounting period of 12 months ending on the last day of a month other than December;
(5) 'includes' and 'including' when used in a definition do not exclude other things otherwise within the meaning of the word defined;
(6) 'Internal Revenue Code' means the Internal Revenue Code of the United States (26 U.S.C.) as the code exists now or as hereafter amended, as the code and amendments apply to the normal taxes and surtax on net incomes, which amendments are operative for the purposes of this chapter as of the time they became operative or will become operative under federal law;
(7) 'part-year resident' means an individual who enters or leaves the state during the taxable year and who has resided or was domiciled in the state for a period of less than 12 months during the taxable year;
(8) 'person' means an individual, a trust or estate, or partnership, or a corporation;
(9) 'taxable year' means the calendar year or the fiscal year ending during the calendar year upon the basis of which the net income is computed under this chapter; 'taxable year' includes, in the case of a return made for a fractional part of a year under this chapter, the period for which the return is made;
(10) 'taxpayer' means a person subject to a tax imposed by this chapter;
(11) 'trade or business' includes the engaging in or carrying on of a trade, business, profession, vocation, employment,
and rendition of services or commercial activity and includes the performance of the function of a public office.
(a) For purposes of calculating the income tax payable under this chapter, the taxpayer may not apply as a credit against tax liability the foreign tax credit allowed as to federal taxes under 26 U.S.C. 27 (Internal Revenue Code).
(b) For purposes of calculating the income tax payable under this chapter, the taxpayer may apply as a credit against tax liability the investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue Code) upon only the first $20,000,000 of qualified investment, other than qualified investment for a special industrial incentive investment tax credit under AS 43.20.042
, put into use in the state for each taxable year. This limitation does not apply to the amounts invested in equipment that meets the definition of a certified pollution control facility as defined in 26 U.S.C. 169 (Internal Revenue Code)
as in effect on June 19, 1975, except that the date specified in 26 U.S.C. 169(d) (Internal Revenue Code) as a condition of qualifying a certified pollution control facility for a deduction does not apply.
(c) For purposes of calculating the income tax payable under this chapter, the taxpayer may apply as an exemption from tax liability the tax exemption for domestic international sales corporations under 26 U.S.C. 991 (Internal Revenue Code),
except those taxpayers who are engaged in the exportation of nonrenewable resources.
(d) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(e) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(f) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(g) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(h) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(i) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(j) For purposes of calculating the tax payable under this chapter, a deduction under 26 U.S.C. 170 may only be taken if payment is made on or before the last day of the taxable year.
(a) For cash contributions accepted for direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation or by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association, a taxpayer is allowed as a credit against the tax due under this chapter
(1) 50 percent of contributions of not more than $100,000; and
(2) 100 percent of the next $100,000 of contributions.
(b) [Repealed, Sec. 12 ch 71 SLA 1991].
(c) Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used.
(d) A contribution claimed as a credit under this section may not
(1) be claimed as a credit under another provision of this title;
(2) also be allowed as a deduction under 26 U.S.C. 170 against the tax imposed by this chapter; and
(3) when combined with credits taken during the taxpayer's tax year under AS 21.89.070
, 21.89.075, AS 43.55.019
, AS 43.56.018
, AS 43.65.018, AS 43.75.018
, or AS 43.77.045
, exceed $150,000.
(a) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(b) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(c) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(d) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(e) There is imposed for each taxable year upon the entire taxable income of every corporation derived from sources within the state a tax computed as follows:
If the taxable income is Then the tax is:
Less than $10,000 1 percent of the taxable income
$10,000 but less than $20,000 $100 plus 2 percent of the taxable
income over $10,000
$20,000 but less than $30,000 $300 plus 3 percent of the taxable
income over $20,000
$30,000 but less than $40,000 $600 plus 4 percent of the taxable
income over $30,000
$40,000 but less than $50,000 $1,000 plus 5 percent of the taxable
income over $40,000
$50,000 but less than $60,000 $1,500 plus 6 percent of the taxable
income over $50,000
$60,000 but less than $70,000 $2,100 plus 7 percent of the taxable
income over $60,000
$70,000 but less than $80,000 $2,800 plus 8 percent of the taxable
income over $70,000
$80,000 but less than $90,000 $3,600 plus 9 percent of the taxable
income over $80,000
$90,000 or more $4,500 plus 9.4 percent of the
taxable income over $90,000.
(f) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(a) If a corporation, or a partnership that has a corporation as a partner, is required to make a return under the provisions of the Internal Revenue Code, it shall file with the department, within 30 days after the federal return is required to be filed, a return setting out
(1) the amount of tax due under this chapter, less credits claimed against the tax; and
(2) other information for the purpose of carrying out the provisions of this chapter that the department requires.
(b) The return shall either be on oath or contain a written declaration that it is made under penalty of perjury, and the department shall prescribe forms accordingly.
(c) Notwithstanding (a) of this section, the total amount of tax imposed by this chapter is due and payable to the department at the same time and in the same manner as the tax payable to the United States Internal Revenue Service.
(d) A taxpayer, upon request by the department, shall furnish to the department a true and correct copy of the tax return which the taxpayer has filed with the United States Internal Revenue Service. Every taxpayer shall notify the department in writing of any alteration in, or modification of, the taxpayer's federal income tax return and of a recomputation of tax or determination of deficiency, whether with or without assessment. A full statement of the facts must accompany this notice. The notice shall be filed within 60 days after the final determination of the modification, recomputation or deficiency, and the taxpayer shall pay the additional tax or penalty under this chapter.
For purposes of this section, a final determination shall mean the time that an amended federal return is filed or a notice of deficiency or an assessment is mailed to the taxpayer by the Internal Revenue Service, except that in no event will there be a final determination for purposes of this section until the taxpayer has exhausted rights of appeal under federal law.
(e) [See delayed amendment note]. The department may credit or refund overpayments of taxes, taxes erroneously or illegally assessed or collected, penalties collected without authority, and taxes that are found unjustly assessed or excessive in amount, or otherwise wrongfully collected. The department shall set limitations, specify the manner in which claims for credits or refunds are made, and give notice of allowance or disallowance. When a refund is allowed to a taxpayer, it shall be paid out of the general fund on a warrant issued under a voucher approved by the department.
(f) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(g) [Repealed, Sec. 10 ch 1 SSSLA 1980].
(a) All business income of water transportation carriers shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax Compact) as modified by the following:
(1) the numerator of the property factor is the sum of the value for property in a fixed location, including buildings and land used in the business, and intrastate equipment and personal property determined according to AS 43.19 (Multistate Tax Compact), and the value of interstate mobile property determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator of the property factor is determined according to AS 43.19 (Multistate Tax Compact);
(2) the numerator of the payroll factor is the sum of the wages and salaries of employees assigned to fixed locations determined according to AS 43.19 (Multistate Tax Compact) and the wages and salaries of employees assigned to interstate mobile property determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator of the payroll factor is determined in accordance with AS 43.19 (Multistate Tax Compact);
(3) the numerator of the sales factor is the sum of all revenues from intrastate activities and revenues from interstate activities determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator is determined in accordance with AS 43.19 (Multistate Tax Compact);
(4) the portions of the numerator of the property, payroll, and sales factors which are directly related to interstate mobile property operations are determined by a ratio which the number of days spent in ports inside the state bears to the total number of days spent in ports inside and outside the state; the term 'days spent in ports' does not include periods when ships are tied up because of strikes or withheld from Alaska service for repairs, or because of seasonal reduction of service; days in port are computed by dividing the total number of hours in all ports by 24.
(b) The department shall, by regulation, adopt formulas to ensure that the total income subject to apportionment under this chapter has been apportioned only to those states having jurisdiction to tax the income. Transportation carriers other than water carriers shall apportion their income to the state by means of the formulas adopted by the department.
(a) Subject to (c) of this section, for purposes of calculating eligible taxes the taxpayer may apply as a credit against eligible taxes the following percentage of the investment credit allowed as to federal taxes under 26 U.S.C. 38
(Internal Revenue Code) on only the first $250,000,000 of qualified investment in the state for each taxable year after December 31, 1984, for a gas processing project: (1) 100 percent on the first $50,000,000 of qualified investment; (2)
80 percent on qualified investment over $50,000,000 but not exceeding $100,000,000; (3) 70 percent on qualified investment over $100,000,000 but not exceeding $150,000,000; (4) 60 percent on qualified investment over $150,000,000
but not exceeding $200,000,000; and (5) 40 percent on qualified investment over $200,000,000 but not exceeding
$250,000,000. A credit may not be allowed under this subsection for an investment credit that is allowed as to federal taxes for leased property by reason of 26 U.S.C. 168(f)(8) (Internal Revenue Code). In this subsection, 'gas processing project' means the integrated plant, facilities, and equipment, including pollution control equipment, used for preparation of consumer or transportation gas, or for conditioning, fractionation, storage, handling or processing of a product, other than crude oil, of an oil or gas well, into liquefied natural gas, methanol, ammonia, urea,
olefins, propanes, butanes, polymers and intermediate hydrocarbon products; it does not include a pipeline from oil and gas wells to or from a plant and facilities.
(b) Subject to (c) of this section, for purposes of calculating eligible taxes the taxpayer may apply as a credit against eligible taxes the following percentage of the investment credit allowed as to federal taxes under 26 U.S.C. 38
(Internal Revenue Code) on only the first $250,000,000 of qualified investment in the state for each taxable year after December 31, 1984, for exploration, drilling of wells, development, or mining of the minerals and other natural deposits listed in 26 U.S.C. 613(b) (Internal Revenue Code) other than sand or gravel unless the mining of sand or gravel is ancillary to a mining development involving a qualified natural deposit other than sand or gravel: (1) 100
percent on the first $50,000,000 of qualified investment; (2) 80 percent on qualified investment over $50,000,000 but not exceeding $100,000,000; (3) 70 percent on qualified investment over $100,000,000 but not exceeding $150,000,000;
(4) 60 percent on qualified investment over $150,000,000 but not exceeding $200,000,000; and (5) 40 percent on qualified investment over $200,000,000 but not exceeding $250,000,000. A credit may not be allowed under this subsection for any investment credit that is allowed as to federal taxes for leased property by reason of 26 U.S.C.
168(f)(8) (Internal Revenue Code). In this subsection, 'mining' has the meaning given in 26 U.S.C. 613(c)(2) (Internal Revenue Code).
(c) A taxpayer may not claim an investment tax credit under (a) or (b) of this section unless the gas processing project or mining project began operation and production after December 31, 1984. A gas processing or mining project is considered to have begun operation and production when the first product or mineral is produced that is ultimately either sold or transferred for further processing or ultimate use.
(d) A taxpayer may not claim an additional investment tax credit under AS 43.20.036
(b) for an investment for which a special industrial incentive investment tax credit is claimed under (a) or (b) of this section.
(e) If a taxpayer making an investment that qualifies for the investment tax credit under this section is a member of a group of affiliated corporations filing a consolidated return under the provisions of this chapter, the amount of the investment tax credit that may be claimed on the consolidated return is limited to the amount the taxpayer making the qualified investment would have been eligible to claim had a consolidated return not been filed.
(f) The investment tax credit per taxable year allowed by (a) and (b) of this section may not exceed 60 percent of the eligible tax liability. Any unused portion of the investment tax credit shall be subject to the carry forward provisions in 26 U.S.C. 46(b)(3) (Internal Revenue Code) except that the unused credit may not be carried forward to tax years beginning after December 31, 1999.
(g) Except as provided in (f) of this section, a tax credit under this section may not be claimed on investments made after December 31, 1994.
(h) In this section 'eligible taxes' means the total tax liability of a taxpayer for the annual taxes due under the provisions of this chapter and AS 43.65.
(a) A corporation that is a member of an affiliated group shall file a return using the water's edge combined reporting method. A return under this section must include the following corporations if the corporations are part of a unitary business with the filing corporation:
(1) an affiliated corporation that is eligible to be included in a federal consolidated return under 26 U.S.C. 1501 - 1505
(Internal Revenue Code) if the corporation's property, payroll, and sales factors in the United States average
(A) 20 percent or more; or
(B) under 20 percent, if the corporation does not meet the requirements of 26 U.S.C. 861(c);
(2) a domestic international sales corporation; in this paragraph, 'domestic international sales corporation' has the meaning given in 26 U.S.C. 992(a);
(3) a foreign sales corporation; in this paragraph, 'foreign sales corporation' has the meaning given to the term 'FSC' in
26 U.S.C. 922(a);
(4) a corporation, regardless of the place where the corporation was incorporated, if the corporation's property, payroll,
and sales factors in the United States average 20 percent or more;
(5) a corporation that is incorporated in or does business in a country that does not impose an income tax, or that imposes an income tax at a rate lower than 90 percent of the United States income tax rate on the income tax base of the corporation in the United States, if
(A) 50 percent or more of the sales, purchases, or payments of income or expenses, exclusive of payments for intangible property, of the corporation are made directly or indirectly to one or more members of a group of corporations filing under the water's edge combined reporting method;
(B) the corporation does not conduct significant economic activity.
(b) When computing taxable income for a corporation under (a) of this section, the following amounts shall be excluded:
(1) 80 percent of dividend income received from foreign corporations;
(2) an amount treated as a dividend under 26 U.S.C. 78;
(3) 80 percent of the royalties accrued or received from a foreign corporation.
(c) In (b)(1) and (3) of this section, a payment is considered to be received from a corporation that is part of the unitary business if the payment is received
(1) by a member of an affiliated group included in a water's edge combined report filed under this section; and
(2) from a corporation in which the recipient owns 50 percent or more of the stock of the corporation.
(d) Dividends and royalties taxable to a corporation using the water's edge combined reporting method are in lieu of an expense attribution for income excluded under (b) of this section.
(e) The department may require a corporation that files under (a) of this section to file a report under AS 43.20.065
- 43.20.071 prepared without regard to this section if the corporation or an affiliated corporation
(1) fails to comply with regulations adopted under this chapter, including domestic disclosure spread sheet filing requirements; or
(2) does not provide information that is requested by the department that is necessary for the department to audit the taxpayer's corporate return in a reasonable period of time.
(f) This section does not apply to taxpayers subject to AS 43.20.072
engaged in
(1) the production of oil or gas from a lease or property in the state; or
(2) the transportation of oil or gas by regulated pipeline in the state.
(g) A corporation that has signed a contract approved by the legislature as a result of submission of a proposed contract developed under AS 43.82 or as a result of acts by the legislature in implementing the purposes of AS 43.82, providing for payments in lieu of the tax under this chapter and that has nexus with the state solely as the result of the corporation's participation in the approved qualified project that is subject to the contract is not required to file a return under this section unless required to do so by the contract.
(h) In this section,
(1) 'affiliated corporation' means a member of an affiliated group to which the taxpayer filing a return under (a) of this section belongs;
(2) 'affiliated group' means a group of two or more corporations in which 50 percent or more of the voting stock of each member of the group is directly or indirectly owned by one or more corporate or noncorporate common owners, or by one or more of the members of the group;
(3) 'foreign corporation' means a corporation created or organized outside of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, or a possession of the United States;
(4) 'water's edge combined reporting method' means a reporting method in which the only corporations besides the taxpayer that may be included in the return are the corporations listed in (a) of this section.
(a) Subject to the terms and conditions of this section, and in addition to any other credit authorized to the taxpayer by this chapter, a taxpayer that is an operator or working interest owner directly engaging in the exploration for and development of gas may apply as a credit against the state tax liability that may be imposed on the taxpayer under this chapter, for a tax year beginning after December 31, 2002,
(1) 10 percent of the taxpayer's qualified capital investment; and
(2) 10 percent of the annual cost incurred by the taxpayer for qualified services in the state during each tax year for which a credit is allowable for a qualified capital investment under (1) of this subsection.
(b) Expenditures qualifying for the taxpayer's qualified investment credit under (a)(1) of this section must be
(1) cash expenditures or binding payment agreements entered into after June 30, 2003; and
(2) made for assets first placed in service in the state in or before the tax year in which the credit is claimed through the date the reserves produce gas for sale and delivery; for purposes of this paragraph, 'placed in service in the state' means that the first use of the qualified investment is in this state; if the property on which the claim of the credit is based has been used elsewhere in the tax year of acquisition and is brought to this state during that year or a subsequent year, the property does not qualify for the investment credit.
(c) The credit per tax year allowed by (a) of this section may not exceed 50 percent of the taxpayer's total tax liability under this chapter, but shall be calculated before the application of any other credits allowed under this chapter. An unused portion of the credit for the tax year
(1) may be carried forward into one or more of the following tax years, except that the unused credit from one tax year may not be carried forward for more than five following tax years;
(2) shall be applied to the taxpayer's tax liability under this chapter during the following tax year before allowance of a credit allowed by (a) of this section for that following tax year.
(d) To obtain the credit allowed by this section, the taxpayer shall, with the taxpayer's tax return, submit, on a form prescribed by the department, information that demonstrates that the taxpayer is eligible for the credit and evidence of the expenses that are the basis of the claim of the credit. The taxpayer has the burden of demonstrating compliance with the requirements of this section to entitle the taxpayer to the claim of and the amount of the credit.
(e) A taxpayer entitled to a credit under this section
(1) may not convey, assign, or transfer the credit to another taxpayer or business entity unless the conveyance,
assignment, or transfer of the credit is part of the conveyance, assignment, or transfer of the taxpayer's business;
(2) forfeits the credit to which the taxpayer is entitled during the tax year and any carryover of it under (c) of this section, but does not forfeit the portion of the credit that accrued in a previous taxable year that may be carried over under (c) of this section, if the taxpayer
(A) disposes of the qualified capital investment;
(B) takes the qualified investment out of service; or
(C) transfers the qualified investment out of this state.
(f) A taxpayer is not entitled to a credit under this section for expenditures that are made or incurred for the qualified capital investment or for qualified services made for exploration and development of gas that occur in the area of Alaska lying north of 68 degrees North latitude or that are made or incurred to transport gas from reserves located in the area of Alaska lying north of 68 degrees North latitude.
(g) A taxpayer who obtains a credit under this section may not claim a tax credit or royalty modification provided for under any other title. However, a taxpayer may, at the taxpayer's election, forgo a credit under this section in order to continue to qualify for a credit provided for in another title.
(h) For purposes of determining allowable credits under this section, the department shall allow only expenditures and payments that are not inconsistent with the expenditures authorized under 26 U.S.C. (Internal Revenue Code) for exploration and development of natural resources.
(i) In this section,
(1) 'qualified capital investment' means a cash expenditure or binding payment agreement, as described in (b)(1) of this section, for real property or tangible personal property used in this state in the exploration and development of gas reserves in a gas reservoir for which there has not been commercial production if the reserves produce gas for sale and delivery; in this paragraph, 'property' includes
(A) property used in the operation or maintenance of facilities for exploration or development of gas;
(B) property that is placed in use under a capitalized lease or an operating lease; and
(C) the following property used for the exploration and development of gas:
(i) machinery, appliances, supplies, and equipment;
(ii) drilling rigs, wells, gathering lines and transmission lines, pumping stations, compressor stations, power plants,
topping plants, and processing units;
(iii) roads, docks and other port facilities, and helicopter pads;
(iv) maintenance equipment and facilities, and maintenance camps and other related facilities; and
(v) communications facilities owned by a person whose principal business in the state is the exploration for or development of gas and whose operation of the communications facilities directly relates to the conduct of that business;
(2) 'qualified services'
(A) means expenditures for labor, seismic, and other services that are directly applicable to a qualified capital investment;
(B) does not include lease operating expenses.
(a) All business income of a taxpayer engaged in the production of oil or gas from a lease or property in this state or engaged in the transportation of oil or gas by pipeline in this state shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax Compact) as modified by this section.
(b) A taxpayer's business income to be apportioned under this section to the state shall be the federal taxable income of the taxpayer's consolidated business for the tax period, except that
(1) taxes based on or measured by net income that are deducted in the determination of the federal taxable income shall be added back;
(2) intangible drilling and development costs that are deducted as expenses under 26 U.S.C. 263(c) (Internal Revenue Code)
in the determination of the federal taxable income shall be capitalized and depreciated as if the option to treat them as expenses under 26 U.S.C. 263(c) (Internal Revenue Code) had not been exercised;
(3) depletion deducted on the percentage depletion basis under 26 U.S.C. 613 (Internal Revenue Code) in the determination of the federal taxable income shall be recomputed and deducted on the cost depletion basis under 26 U.S.C. 612
(Internal Revenue Code) and
(4) depreciation shall be computed on the basis of 26 U.S.C. 167 (Internal Revenue Code) as that section read on June 30,
1981.
(c) A taxpayer's business income shall be apportioned to this state by multiplying the taxpayer's income determined under
(b) of this section by the apportionment factor applicable to the taxpayer among the following factors:
(1) the apportionment factor of a taxpayer subject to this section but not engaged in the production of oil and gas, or of gas only, as appropriate, from a lease or property in this state during the tax period is a fraction, the numerator of which is the sum of the property factor under AS 43.19
(Multistate Tax Compact) and the sales factor under (d) of this section for the taxpayer for that tax period, and the denominator of which is two;
(2) the apportionment factor of a taxpayer subject to this section but not engaged in the pipeline transportation of oil or gas in this state during the tax period is a fraction, the numerator of which is the sum of the property factor under (e) of this section and the extraction factor under (f) of this section for the taxpayer for the tax period, and the denominator of which is two;
(3) the apportionment factor of a taxpayer engaged both in the production of oil or gas from a lease or property in this state and in the pipeline transportation of oil or gas in this state during the tax period is a fraction, the numerator of which is the sum of the sales factor under (d) of this section, the property factor under (e) of this section, and the extraction factor under (f) of this section for the taxpayer for the tax period, and the denominator of which is three.
(d) The sales factor of a taxpayer subject to this section is a fraction,
(1) the numerator of which is the sum of the following for the tax period:
(A) the tariffs allowed and received by or for the taxpayer for transporting oil or gas by pipeline in this state,
regardless of whether the tariffs are paid by third parties or by entities within the taxpayer's consolidated business;
and
(B) the total sales of the taxpayer in this state, determined in accordance with AS 43.19 (Multistate Tax Compact), but excluding those sales already included in the tariffs described in (A) of this paragraph; and
(2) the denominator of which is the sum of the following for the tax period:
(A) the tariffs allowed and received by or for the taxpayer's consolidated business for transporting oil or gas by pipeline everywhere, regardless of whether the tariffs are paid by third parties or by entities within the taxpayer's consolidated business; and
(B) the total sales of the taxpayer's consolidated business everywhere, determined in accordance with AS 43.19 (Multistate Tax Compact), but excluding those sales already included in the tariffs described in (A) of this paragraph.
(e) Unless otherwise specified in this section, the property factor of a taxpayer subject to this section is a fraction,
(1) the numerator of which is the sum of the following for the tax period:
(A) the average value, determined under AS 43.19 (Multistate Tax Compact), of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax period; and
(B) the cumulative intangible drilling and development costs capitalized or expensed for federal income tax purposes under
26 U.S.C. 263(c) (Internal Revenue Code), for the taxpayer's producing oil and gas wells in this state; and
(2) the denominator of which is the sum of the following for the tax period:
(A) the average value, determined under AS 43.19 (Multistate Tax Compact), of the real and tangible personal property everywhere owned or rented and used by the taxpayer's consolidated business during the tax period; and
(B) the cumulative intangible drilling and development costs capitalized or expensed for federal income tax purposes under
26 U.S.C. 263(c) (Internal Revenue Code), for the producing oil and gas wells everywhere of the taxpayer's consolidated business.
(f) The extraction factor of a taxpayer subject to this section is a fraction,
(1) the numerator of which is the sum of the following for the tax period:
(A) the number of barrels of the taxpayer's oil (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer in this state; and
(B) one-sixth of the number of Mcf of the taxpayer's gas (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer in this state, excluding reinjected gas; and
(2) the denominator of which is the sum of the following for the tax period:
(A) the number of barrels of oil of the taxpayer's consolidated business (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer's consolidated business everywhere; and
(B) one-sixth of the number of Mcf of gas of the taxpayer's consolidated business (net of royalty to an unrelated party)
produced from or allocated to leases or properties of the taxpayer's consolidated business everywhere, excluding reinjected gas.
(g) A taxpayer that has signed a contract approved by the legislature as a result of submission of a proposed contract developed under AS 43.82 or as a result of acts by the legislature in implementing the purposes of AS 43.82, providing for payments in lieu of the tax under this chapter and that has nexus with the state solely as the result of the taxpayer's participation in the approved qualified project that is subject to the contract or would not, but for such participation, be engaged in the production of oil or gas from a lease or property in this state or engaged in the transportation of oil or gas by pipeline in this state, is not required to file a return under this section unless required to do so by the contract.
(h) In this section,
(1) 'barrel' means the quantity of oil contained in 42 United States gallons of 231 cubic inches each, measured at a temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds per square inch;
(2) 'consolidated business' means a corporation or group of corporations having more than 50 percent common ownership,
direct or indirect, or a group of corporations in which there is common control, either direct or indirect, as evidenced by any arrangement, contract, or agreement; the requirements of this chapter apply whether or not the taxpayer is the parent or controlling corporation;
(3) 'federal taxable income' means taxable income as the term is used in AS 43.20.011
- 43.20.065;
(4) 'gas' means all hydrocarbons produced that are not defined as oil, including all liquid hydrocarbons extracted at a gas processing plant;
(5) 'lease or property' has the meaning given it by the department in its regulations;
(6) 'Mcf ' means the quantity of gas contained in 1,000 cubic feet of space, measured at a temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds per square inch; and
(7) 'oil' means crude petroleum oil and other hydrocarbons, regardless of API gravity, which are produced in liquid form,
including the liquid hydrocarbons sometimes known as distillate or condensate which are recovered by separation from gas other than at a gas processing plant.
(a) The department may collect taxes, with interest, penalties, and other additional amounts permitted by law, by distraint and sale, in the manner provided in this section, of the property of a person liable to pay the taxes,
interest, penalties, or other additional amounts, who neglects or refuses to pay them within 10 days from the mailing of notice and demand for payment of them, and who has not appealed from the assessment of the taxes, interest,
penalties, and other additional amounts determined under AS 43.05.240
or following appeal taken under AS 43.05.241
or 43.05.242.
(b) Notwithstanding the provisions of AS 09.38 or any other provision of law exempting property from execution, only the following property, if it belongs to the head of a family,
is exempt from distraint and sale under this chapter:
(1) the schoolbooks and wearing apparel necessary for the family;
(2) arms for personal use;
(3) one cow, two hogs, five sheep and their wool, but the aggregate market value of the sheep may not exceed $50;
(4) the necessary food for the exempt cow, hogs, and sheep, for not more than 30 days;
(5) fuel to an amount not greater than $25;
(6) provisions to an amount not greater than $50;
(7) household furniture kept for use to an amount not greater than $300; and
(8) the books, tools, or implements of a trade or profession, to an amount not greater than $100.
(c) In case of neglect or refusal to pay taxes or deficiencies as provided in this chapter, the department may levy, or,
by warrant issued by it, authorize a deputy or agent to levy upon, seize and sell all property, except exempt property belonging to the person, for the payment of the amount due, with interest and penalty for nonpayment, and also of a further amount sufficient for the fees, costs, and expenses of the levy.
(d) When distraint is made, as provided in this section
(1) the deputy or agent charged with the collection shall make or have made an account of the property distrained, a copy of which, signed by the deputy or agent making the distraint, shall be left with the owner or possessor of the property, or at the dwelling or usual place of business of the owner or possessor, with a person of suitable age and discretion, if a person of suitable age and discretion can be found, or if the taxpayer is a corporation, with an officer, manager, general agent, or agent for process, with a note of the amount demanded and the time and place of sale;
(2) the deputy or agent shall immediately publish a notice of the time and place of sale, together with a description of the property distrained, in a newspaper within the judicial district in which the distraint is made, and in the discretion of the department have the notice publicly posted in three public places within five miles of the place where the sale is to be held, one of the notices to be posted at the post office nearest to the place where the sale is to be made; and
(3) the time of sale may not be less than 10 nor more than 60 days from the date of the notification to the owner or possessor of the property, and the place proposed for the sale may not be more than five miles from the place of making the distraint; the sale may be adjourned from time to time by the deputy or agent, if the deputy or agent considers it advisable, but not for more than 90 days in all.
(e) When property is advertised for sale under distraint, the deputy or agent making the seizure shall proceed to sell the property at public auction, offering the property at not less than a fair minimum price, including the expenses of making the seizure and of advertising the sale, and if the amount bid for the property at the sale is not equal to the fair minimum price so fixed, the agent or deputy conducting the sale may declare the property to be purchased by the agent or deputy for the state. The property so purchased may be sold by the deputy or agent under regulations prescribed by the department.
(f) The property distrained shall be restored to the owner or possessor if, before the sale, payment of the amount due is made to the deputy or agent charged with the collection, together with the fees and other charges; but in case of nonpayment, the deputy or agent shall proceed to sell the property at public auction. The owner of real property sold under this section, the owner's heir, executor, or administrator, or a person in behalf of the owner may redeem the property sold or a particular tract of the property at any time within 120 days after the sale of the property or tract. The property or tract may be redeemed upon payment to the purchaser or, if the purchaser cannot be found in the state, then to the commissioner of revenue for the use of the purchaser, the purchaser's heirs, or assigns, the amount paid by the purchaser and interest on it at the rate of 12 percent a year. If land sold is redeemed under this subsection, the commissioner shall cause entry of the fact to be made upon the record mentioned in (g)(6) of this section and the entry shall be evidence of such redemption.
(g) The following provisions apply to sale of property under this section.
(1) In the case of property sold under this section, the deputy or agent conducting the sale shall give to the purchaser a certificate of sale upon payment in full of the purchase price. In the case of real property, the certificate shall set out the real property purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid for it.
(2) In the case of real property sold under this section and not redeemed in the manner and within the time provided in
(f) of this section, the commissioner shall execute to the purchaser of the real property at the sale a deed of the real property so purchased, reciting the facts set out in the certificate.
(3) If real property is declared purchased by the deputy or agent for the state at a sale under (e) of this section, the deputy or agent shall at the proper time execute a deed for it after its preparation and the endorsement of approval as to its form by the attorney general and, without delay, cause the deed to be duly recorded in the proper registry of deeds.
(4) In all cases of sale of property under this section other than real property, the certificate of sale
(A) is prima facie evidence of the right of the deputy or agent to make the sale, and conclusive evidence of the regularity of the proceedings in making the sale;
(B) transfers to the purchaser all right, title, and interest of the delinquent in and to the property sold;
(C) where the property consists of stock, is notice, when received, to a corporation, company, or association of the transfer, and is authority to the corporation, company, or association to record the transfer on their books and records in the same manner as if the stock was transferred or assigned by the party holding the stock in lieu of an original or prior certificate, which is void, whether cancelled or not; and
(D) where the subject of sale is security or other evidence of debt, is a good and valid receipt to the person holding it,
as against a person holding or claiming to hold possession of the security or other evidence of debt.
(5) In the case of the sale of real property under this section
(A) the deed of sale given under (2) of this subsection is prima facie evidence of the facts stated in it; and
(B) if the proceedings of the commissioner or a deputy or agent of the commissioner as set out have been substantially in accordance with the provisions of law, the deed is considered and operates as a conveyance of all the right, title, and interest the party delinquent had in and to the real property thus sold at the time the lien of the state attached to it.
(6) The commissioner or a deputy or agent of the commissioner shall keep a record of all sales of real property under this section and of redemption of the property. The record shall set out the tax for which the sale was made, the date of seizure and sale, the name of the party assessed and all proceedings in making the sale, the amount of expenses, the names of the purchasers, and the date of the deed. A copy of the record or a part of it certified by the commissioner is evidence in any court of the truth of the facts stated in it.
(h) When property liable to distraint for taxes is not divisible, so as to enable the department by sale of a part of it to raise the whole amount of the tax or deficiency, with all costs and charges, the whole of the property shall be sold, and the surplus of the proceeds of the sale, after making allowance for the amount of the tax or deficiency,
interest, penalties, and additions to it and for the costs and charges of the distraint and sale, shall be surrendered to the owner of the property.
(i) If property seized and sold under this section is not sufficient to satisfy the claim of the state for which distraint or seizure is made, the deputy or agent may, thereafter, and as often as is necessary, proceed to seize and sell in like manner any other property liable to seizure of the taxpayer against whom the claim exists until the amount due from the taxpayer, together with all expenses, is fully paid.
(j) A person in possession of property, or rights to property, which is subject to distraint, upon which a levy is made,
shall, upon demand by the deputy or agent making the levy, surrender the property or rights to the deputy or agent,
unless the property or right is, at the time of the demand, subject to an attachment under judicial process. A person who fails or refuses to so surrender the property or rights is personally liable to the state in a sum equal to the value of the property or rights not so surrendered, but not exceeding the amount of the taxes or deficiencies,
including penalties, and interest, for the collection of which levy is made, together with costs and interest from the date of the levy.
(k) All persons shall, on demand of an agent or deputy about to distrain or having distrained on property, or rights of property, exhibit all books containing evidence or statements relating to the subject of distraint, or the property or rights of property liable to distraint for the tax due.
(l) The department shall by regulation determine the fees and charges to be allowed in cases of distraint, and may determine whether an expense incurred in making a distraint or seizure is necessary.
(m) The period of limitation upon distraint is the same as provided under 26 U.S.C. 6501(c), 6502(a), and 6503(a)
(Internal Revenue Code). In determining the running of a period of limitation in respect of distraint, the distraint is considered to begin when the levy upon property is made.
(n) The provisions of this chapter are not exclusive but are in addition to all other existing remedies provided by law for the enforcement of the revenue laws of the state.
(o) The department may be made a party defendant in an action by a person aggrieved by the unlawful seizure or sale of the person's property, but only the state is responsible for a final money judgment secured against the department, and the judgment shall be satisfied out of the general fund of the state treasury.
(p) The department shall adopt and publish all necessary regulations for the enforcement of this section.
(q) In this section 'person' includes an officer or employee of a corporation or a member or employee of a partnership,
who as an officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.
(r) In AS 43.20.250
- 43.20.270
(1) 'property' means all property, real and personal, tangible and intangible, a right, title, or interest to property,
and, without limitation, stocks, securities, bank accounts, and evidences of debt.
(2) 'taxes' includes deficiencies in respect to the taxes.
Article 05. GENERAL PROVISIONS
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