15 AAC 21.128. Choice of methods for determining reasonable cost of transportation

The reasonable cost of transportation is the actual cost of transportation as determined in 15 AAC 21.130(a) and (b). However, the reasonable cost of transportation is the fair market value as defined in 15 AAC 21.130(c) if the department determines that all of the following conditions exist:

(1) the parties to the transportation of oil or gas are affiliated;

(2) the contract for the transportation of oil or gas is not an arm's-length transaction or is not representative of the market value of the transportation at the time the contract was executed or renegotiated; and

(3) the method of transportation of oil or gas is not reasonable in view of the existing alternative methods of transportation at the time the taxpayer entered into the transportation commitment.

History: Eff. 5/21/81, Register 78

Authority: AS 43.05.080

Art. IV, бї 18

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