Title 15 . Revenue

Chapter 20 . (Repealed)

Section 145. Credits adopted by reference

15 AAC 20.145. Credits adopted by reference

(a) A credit may be attributed to Alaska only if the credit is claimed on a federal return. For purposes of this section, a federal credit is generated in the year it is originally claimed on a federal return. A federal credit need not be applied to reduce federal tax in the year generated for the credit to be attributed to Alaska. A federal credit claimed and disallowed, such as a credit disallowed by the Internal Revenue Service at audit, is not attributable to Alaska.

(b) For purposes of illustrating the attribution of a federal credit to Alaska under AS 43.20.021 (d) and (a) of this section, the following example is offered:

EXAMPLE

Taxpayer A does business in Alaska and does not conduct business in any other state. Taxpayer A's business activities in 1998 generated a federal research credit of $100. In 1998, Taxpayer A is subject to the federal alternative minimum tax and cannot claim its federal credit of $100 against federal income tax in 1998. The federal research credit is attributable to Alaska under AS 43.20.021 (d) and (a) of this section. Taxpayer A's 1998 Alaska credit is $18, 18 percent of the federal credit generated during 1998.

(c) The credit attributable to Alaska is the taxpayer's actual federal credit generated in the current year or, if the taxpayer is taxable both inside and outside Alaska, is the credit calculated by apportioning the actual federal credits generated in the current year by the taxpayer's unitary business using the apportionment factor applicable to the taxpayer under AS 43.20.

(d) For purposes of illustrating the attribution of federal credits of a unitary business in a combined report under (c) of this section, the following example is offered:

EXAMPLE

Taxpayer B is engaged in a unitary business, part of which is conducted inside Alaska. Corporation C is part of the unitary business of Taxpayer B and is included in the combined report of Taxpayer B. Corporation C's business activities generated a federal research credit of $100. No other federal credits were generated by the unitary business of Taxpayer B. Taxpayer B has an Alaska apportionment factor of 50 percent. Taxpayer B's federal credit attributable to Alaska is the $100 federal credit generated by its unitary business multiplied by its apportionment factor of 50 percent, or $50. Taxpayer B's Alaska research credit is $9, which is 18 percent of the $50 federal credit attributed to Alaska.

(e) A taxpayer shall apply credits attributable to Alaska against the income tax set out in AS 43.20.011 (e) before any other credits. A taxpayer may not apply credits attributable to Alaska against Alaska alternative minimum tax or other taxes. A taxpayer shall carry back or carry forward unused credits attributable to Alaska as provided under the Internal Revenue Code.

(f) Federal credits allowed under the Internal Revenue Code that represent, in whole or in part, a refund of federal taxes are not attributable to Alaska. The part of a federal credit not subject to carryforward under the Internal Revenue Code that increases net minimum tax under Internal Revenue Code section 53 (26 U.S.C. 53) may not be attributed to Alaska as a credit under AS 43.20.021 (d).

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

Authority: AS 43.05.080

AS 43.20.021