Title 15 . Revenue

Chapter 20 . (Repealed)

Section 135. Alternative minimum tax and credit for prior year minimum tax

15 AAC 20.135. Alternative minimum tax and credit for prior year minimum tax

(a) The Alaska alternative minimum tax is 18 percent of the applicable alternative minimum federal tax determined under (b) and (c) of this section and is in addition to, and independent of, the income tax imposed at the rates set out by AS 43.20.011 (e).

(b) The applicable alternative minimum federal tax is the taxpayer's actual federal alternative minimum tax or, if the taxpayer is taxable both inside and outside Alaska, the applicable alternative minimum federal tax is the actual federal alternative minimum tax of the taxpayer's unitary business multiplied by the taxpayer's apportionment factor.

(c) If a corporation included in the taxpayer's combined report is a member of a federal consolidated group that incurs the federal alternative minimum tax and that federal consolidated group includes one or more corporations that are not included in the combined report, the federal alternative minimum tax of the federal consolidated group must be allocated between members inside and outside the taxpayer's combined group. The allocation shall be made by multiplying the actual federal alternative minimum tax of the federal consolidated group by a fraction, the numerator of which is the pro forma alternative minimum tax of the corporations included in the taxpayer's combined group that are also members of the federal consolidated group, and the denominator of which is the sum of the pro forma alternative minimum tax for the corporations included in the taxpayer's combined group that are also members of the federal consolidated group plus the pro forma alternative minimum tax for the remaining corporations included in the consolidated federal return. For purposes of allocating the federal consolidated alternative minimum tax under this subsection, the pro forma alternative minimum tax of the corporations inside the taxpayer's combined group and of the corporations outside the taxpayer's combined group shall be computed on a consolidated basis for each group and may not be less than zero.

(d) For purposes of illustrating the method of determining the amount of a federal consolidated alternative minimum tax that is allocable to a unitary business under (c) of this section, the following example is offered:

EXAMPLE

Taxpayer A joins in the filing of a federal consolidated return with corporations B, C, and D. The federal alternative minimum tax of the consolidated group is $1,000. Corporation B is part of Taxpayer A's unitary business and is included in the combined report of Taxpayer A. Corporations C and D are not part of the unitary business conducted in this state and are not included in the combined report of Taxpayer A. The pro forma federal alternative minimum tax of Taxpayer A and corporation B is $480. The pro forma federal alternative minimum tax of corporations C and D is $720. Taxpayer A's apportionment factor is 50 percent. The applicable federal alternative minimum tax allocable to the unitary business of Taxpayer A is $1,000 X ($480/($480+$720)) or $400. Taxpayer A's Alaska alternative minimum tax is $36 ($400 X 50 percent X 18 percent).

(e) Except as provided in (g) of this section, a taxpayer's Alaska credit for prior year minimum tax is 18 percent of the taxpayer's actual federal credit for prior year minimum tax or, if the taxpayer is taxable both inside and outside Alaska, the credit is 18 percent of the actual federal credit of the taxpayer's unitary business multiplied by the taxpayer's Alaska apportionment factor.

(f) If a corporation included in the taxpayer's combined group is a member of a federal consolidated group that applied a federal credit for prior year minimum tax against consolidated federal income tax payable and the federal consolidated group also includes one or more corporations that are not included in the combined report of the taxpayer, the federal credit for prior year minimum tax of the federal consolidated group shall be allocated between the members inside and outside the taxpayer's combined group. The allocation shall be made by multiplying the federal credit for prior year minimum tax of the federal consolidated group by a fraction, the numerator of which is the pro forma credit for prior year minimum tax for the corporations included in the taxpayer's combined group that are also members of the federal consolidated group, and the denominator of which is the sum of the pro forma credit for prior year minimum tax for the corporations included in the taxpayer's combined group that are also members of the federal consolidated group plus the pro forma credit for prior year minimum tax for the remaining corporations included in the federal consolidated group. For the purpose of making a determination required by this subsection, a group's pro forma credit for prior year minimum tax is the credit allowable to that group determined on a consolidated basis and limited by Internal Revenue Code section 53(c) (26 U.S.C. 53(c)). The Alaska credit for prior year minimum tax is the resulting amount multiplied by the taxpayer's apportionment factor and then by 18 percent.

(g) The Alaska credit for prior year minimum tax is limited to the cumulative Alaska alternative minimum tax paid by the taxpayer for tax years after 1986 less the Alaska prior year minimum tax credits allowed in prior years.

History: Eff. 3/6/98, Register 145

Authority: AS 43.05.080

AS 43.20.021