Section 15.55.330. Transitional investment expenditure credits.

	(a)  Except as provided under (b) of this section, a tax credit under AS 43.55.023(i)(2) may not be taken for a calendar year after 2006 based on a transitional investment expenditure that is not included in the statement described in 15 AAC 55.345(g), except for an expenditure that  
		(1) would have been recognized as a transitional investment expenditure but for the fact that the producer or explorer treated it as an expense for federal income tax purposes before April 1, 2008; and  
		(2) the United States Internal Revenue Service subsequently required to be capitalized under 26 U.S.C. (Internal Revenue Code), as amended.  
	(b)  A person that did not have commercial production of oil or gas from a lease or property in the state before January 1, 2008, and that wishes to take a tax credit under AS 43.55.023(i)(2) may not take a tax credit under AS 43.55.023(i)(2) based on a transitional investment expenditure that is not included in the statement described in 15 AAC 55.345(g), except for an expenditure that  
		(1) would have been recognized as a transitional investment expenditure but for the fact that the producer or explorer treated it as an expense for federal income tax purposes before the statement was filed with the department; and  
		(2) the United States Internal Revenue Service subsequently required to be capitalized under 26 U.S.C. (Internal Revenue Code), as amended.  
	(c)  The exclusion of certain expenditures as provided under AS 43.55.165(e)(18) and 15 AAC 55.275 applies to the calculation of a producer's transitional investment expenditures incurred during a calendar year or, as prorated under AS 43.55.165(e)(18), during the last nine months of 2001 or the first three months of 2006. The portion that is excluded is a single amount calculated for the total of the producer's expenditures that would otherwise be transitional investment expenditures, irrespective of the lease or property or area of the state with respect to which the expenditure was incurred. Subject to prorating as applicable, the excluded portion for a calendar year is $1 less than the product of $.30 multiplied by the total amount of taxable oil and gas, in BTU equivalent barrels, produced by the producer from all leases or properties in the state during that calendar year. However, the excluded portion for a calendar year may not exceed the total amount of the producer's expenditures incurred during that calendar year that, but for the exclusion provided under AS 43.55.165(e)(18), would be qualified capital expenditures if they were incurred after March 31, 2006. For purposes of applying the exclusion under this subsection,  
		(1) oil and gas are considered to be produced from a lease or property according to  
			(A) AS 43.55,  as that chapter read on March 31, 2006; and   
			(B) this chapter, as it read on March 31, 2006;  
		(2) "gas" has the meaning given in AS 43.55.900, as that section read on March 31, 2006;  
		(3) "oil" has the meaning given in AS 43.55.900, as that section read on March 31, 2006; and  
		(4) "taxable oil and gas" means all oil and gas produced from a lease or property in the state except oil and gas the ownership or right to which is exempt from taxation.  

Authorities

43.05.080;43.55.023;43.55.110;43.55.165

Notes

Reference

15 AAC 55.800

Authority

AS 43.05.080 AS 43.55.023 AS 43.55.110 AS 43.55.165

History

Eff. 5/3/2007, Register 182