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(a) Request for a waiver of the annual security required by 15 AAC 10.030 must be made in writing to the department and must state with specificity reasons constituting good cause for granting the waiver. An applicant for a waiver must also submit a financial statement for the three years preceding the year for which the request for waiver is made.
(b) The following factors will be considered in determining good cause for waiver of the annual required security. The department will consider the factors set out in (1) - (8) of this subsection together with the state's interest in assuring payment of taxes.
(1) Past Payment Record of the Taxpayer. A record of prompt payment of taxes will be considered in the taxpayer's favor. A poor record, or no record, will weigh against the possibility of waiver. A good-faith grievance of liability by the taxpayer does not affect a favorable payment record.
(2) Reasonableness of the Taxpayer's Estimates of Tax Liability. A total waiver will not be granted if the taxpayer's estimates are unreasonably low in the opinion of the department or have been consistently low for past tax years.
(3) Length of Time of Doing Business in the State. This factor is related to the past payment record but may indicate that tax liabilities will be met, that the taxpayer is engaged in a stable business enterprise, and that the taxpayer exercises sound business judgment.
(4) Volume of Business Done in the State, Including Number of Alaska Residents Employed. Benefit to the state from the taxpayer's operation will be considered in the taxpayer's favor. Because volume of business done in the state generally results in higher tax liability, it will be considered in conjunction with past payment record, reasonableness of the taxpayer's estimates of current liability, and other relevant factors.
(5) Consideration Will be Given to the Value of Leases and Lease Improvements. While leases cannot be used as security for tax liability, a lease may indicate operational stability and an investment in the state.
(6) Prepayment or quarterly payment before the deadline for posting security of some or all taxes due in the current year will be considered in the taxpayer's favor, especially if combined with a good payment record.
(7) Consideration will be given to the value of other security acceptable to the department which covers a part of the annual security requirement.
(8) The cost of bonding may be given some weight if there is an unusually great difference in the cost of a bond for twice the amount of estimated taxes by contrast to the cost if the doubling requirement is waived and if this cost is unduly burdensome given the size of the business.
(c) A request for a waiver under this section will be reviewed on a case-by-case basis and may be granted in whole or in part. A partial waiver will be granted to the extent that otherwise acceptable security or security posted to cover other specific tax obligations, including liquor excise tax, or salmon in the round or other taxes, is available to meet a part of the annual required security. The department may grant a total or partial waiver upon review of the good cause statement in the applicant's request. The $1,000 minimum requirement is waivable only if the nonresident firm is a sole proprietorship, partnership or other unincorporated business association not subject to any other tax or fee under AS 43, AS 23.20, or any other tax, other than the tax imposed by AS 43.70.030 .
(d) A waiver or partial waiver is effective only for the year for which it is granted and a new waiver or partial waiver must be obtained from the department by June 2 of the following year.
History: Eff. 5/16/81, Register 78
Authority: AS 43.05.080
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Last modified 7/05/2006