Title 15 . Revenue

Chapter 20 . (Repealed)

Section 500. Sales, property and extraction factors

15 AAC 20.500. Sales, property and extraction factors

(a) The sales factor of a taxpayer subject to AS 43.20.072 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 unitary business; and

(B) the total sales of the taxpayer's unitary business in this state determined in accordance with the Multistate Tax Compact (AS 43.19), 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 unitary 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 unitary business; and

(B) the total sales of the taxpayer's unitary business everywhere, determined in accordance with the Multistate Tax Compact (AS 43.19), but excluding those sales already included in the tariffs described in (A) of this paragraph.

(b) The property factor of a taxpayer subject to AS 43.20.072 is a fraction

(1) the numerator of which is the sum of the following for the tax period:

(A) the average value, determined under the Multistate Tax Compact (AS 43.19) of the taxpayer's real and tangible personal property owned or rented in the taxpayer's unitary business and used in this state during the tax period; and

(B) the average amount of cumulative intangible drilling and development costs capitalized or expensed for federal income tax purposes under Internal revenue Code section 263(c) (26 U.S.C. 263(c)), 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 the Multistate Tax Compact (AS 43.19) of the real and tangible personal property everywhere owned or rented and used by the taxpayer's unitary business during the tax period; and

(B) the average amount of cumulative intangible drilling and development costs capitalized or expensed for federal income tax purposes under Internal Revenue Code section 263(c) (26 U.S.C. 263(c)), for the producing oil and gas wells everywhere of the taxpayer's unitary business.

(c) The extraction factor of a taxpayer 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 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 gas consumed for production operations for the lease or property from which it is recovered; 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 unitary business (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer's unitary business everywhere; and

(B) one-sixth of the number of Mcf of gas of the taxpayer's unitary business (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer's unitary business everywhere, excluding reinjected gas and gas consumed for production operations for the lease or property from which it is recovered.

(d) The factors may not include intercompany income and expenses, except the tariffs allowed under AS 43.20.072 (d).

History: Eff. 4/14/82, Register 82; am 3/17/85, Register 93; am 3/6/98, Register 145

Authority: AS 43.05.180

AS 43.19.010 ,

Art. IV, § 18

AS 43.20.072