Title 15 . Revenue

Chapter 20 . (Repealed)

Section 540. Calculation of tax for taxpayers subject to

15 AAC 20.540. Calculation of tax for taxpayers subject to

A taxpayer, whose unitary business begins or ceases the oil and gas activities described in AS 43.20.072 (a) in a tax year, is subject to both AS 43.20.072 and AS 43.20.073 during the transition year and shall calculate tax for that year as follows:

(1) the taxpayer shall determine income that is subject to tax at ordinary rates before any net operating loss deduction by adding

(A) taxable income under AS 20.073, for the entire tax year, multiplied by a ratio, the numerator of which is the number of days the taxpayer was subject to AS 43.20.073 and the denominator of which is the number of days in the tax year; and

(B) taxable income under AS 43.20.072 for the entire tax year, multiplied by a ratio, the numerator of which is the number of days the taxpayer was subject to AS 43.20.072 and the denominator of which is the number of days in the tax year;

(2) the taxpayer shall determine its charitable contribution limitation by applying 26 U.S.C. 170 (Internal Revenue Code) based upon the taxable income calculated under (1) of this section;

(3) the taxpayer shall determine capital gains subject to the alternative rate under AS 43.20.021 (c) by adding

(A) capital gains calculated under AS 43.20.073 , for the entire tax year, multiplied by a ratio, the numerator of which is the number of days the taxpayer was subject to AS 43.20.073 and the denominator of which is the number of days in the tax year; and

(B) capital gains calculated under AS 43.20.072 for the entire tax year, multiplied by a ratio, the numerator of which is the number of days the taxpayer was subject to AS 43.20.072 and the denominator of which is the number of days in the tax year;

(4) the taxpayer shall apportion allowable federal credits and taxes imposed under AS 43.20.021 by using an apportionment factor that is the sum of

(A) the entire tax year's apportionment factor calculated under AS 43.19.010 (Multistate Tax Compact), Article IX. 9, multiplied by a ratio, the numerator of which is the number of days the taxpayer was subject to AS 43.20.073 and the denominator of which is the number of days in the tax year;

(B) the entire tax year's apportionment factor calculated under AS 43.20.072 , multiplied by a ratio, the numerator of which is the number of days the taxpayer was subject to AS 43.20.072 and the denominator of which is the number of days in the tax year;

(5) the taxpayer shall apply the following depreciation rules:

(A) a taxpayer that ceases to be subject to AS 32.20.072 and that becomes subject to AS 20.073 shall use the

(i) taxpayer's federal depreciation expense in determining federal taxable income under (1)(A) of this section; and

(ii) the depreciation methods used in the prior year's return in determining federal taxable income under (1)(B) of this section;

(B) a taxpayer that ceases to be subject to AS 43.20.073 and that becomes subject to AS 43.20.072 shall use the

(i) depreciation methods used in the prior year's return in determining federal taxable income under (1)(A) of this section; and

(ii) depreciation methods under 15 AAC 20.480 as if those methods had been in place on the date of acquisition of each asset in determing federal taxable income under (1)(B) of this section;

(C) the new depreciation methods that the taxpayer uses under this section are the taxpayer's depreciation methods for future tax periods;

(D) a change in depreciation method resulting from a taxpayer's change between AS 43.20.072 and 43.20.073 is not a change in accounting method.

History: Eff. 7/1/2004, Register 170

Authority: AS 43.05.080

AS 43.19.010

AS 43.20.072

AS 43.20.073