Title 15 . Revenue

Chapter 21 . (Repealed)

Section 140. Extraordinary production revenue (or loss)

15 AAC 21.140. Extraordinary production revenue (or loss)

(a) A taxpayer's extraordinary production revenue or loss for a lease or property is fully recognized for purposes of this chapter in the year in which it is realized. There is no carry-back or carry-forward of extraordinary production revenue or loss under this chapter to any other year except to the extent that an extraordinary production loss may contribute to a taxpayer's net loss under 15 AAC 21.070. Multiple realizations of extraordinary production revenue or loss by a taxpayer during a single year are cumulative, with revenues added to revenues and losses to losses, and with revenues and losses offset against each other.

(b) A retroactive decrease or increase in the tariff or fee allowed to be charged by a regulated carrier for transporting a taxpayer's oil and gas produced from a lease or property in the state results in extraordinary production revenue or loss, respectively, for that taxpayer, which is realized for purposes of this chapter at the time when the retroactive change takes effect.

(c) A retroactive increase or decrease in the sales price in a bona fide, arm's-length sale of a taxpayer's oil and gas produced from a lease or property in the state results in extraordinary production revenue or loss, respectively, for that taxpayer, which is realized for purposes of this chapter at the time when the retroactive change takes effect.

(d) The amount of a taxpayer's extraordinary production revenue or loss under (b) or (c) of this section for a lease or property is the amount of the increase or decrease, respectively, in the value at the point of production for the taxpayer's oil and gas from that lease or property to which the retroactive tariff change or change in sales price applies, offset by any corresponding increase or decrease in deductions under 15 AAC 21.200 - 15 AAC 21.290 which change as the result of changing the value at the point of production for that oil and gas.

(e) In the case of catastrophic loss of a taxpayer's oil or gas that has passed its point of production but for which the risk of loss has not shifted from the taxpayer to a common carrier or a third party, the taxpayer realizes an extraordinary production loss for that oil or gas. The amount of the taxpayer's extraordinary loss in such a case equals the reasonable cost of transportation borne by the taxpayer for that oil or gas from its point of production to the point of its loss, plus the value at the point of production for that oil or gas but only to the extent that the value at the point of production for that oil or gas is included in the taxpayer's gross production revenue for the lease or property from (or to) which that oil or gas was produced (or allocated), and minus reimbursements to the taxpayer from insurance or from one or more third parties for that loss.

History: Eff. 2/22/79, Register 69

Authority: AS 43.05.080

AS 43.19.010 ,

Art. IV, § 18

AS 43.21.020

AS 43.21.090