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(a) For a taxpayer's oil, the prevailing value for purposes of this chapter is the arithmetic average acquisition cost C.I.F. (at the refinery inlet in the same market in which the taxpayer's Alaskan oil is refined) based on the sales price of like oil sold in up to three third-party, arm's-length transactions selected by the department, if disclosure of the sales price information is permitted by the parties to those transactions at the time of an audit of the taxpayer. In this subsection, "like oil" means an oil of substantially similar quality produced in the same general area of the state and subject to the same federal price controls, if any, as the oil for which the prevailing value is to be determined.
(b) If the information under (a) of this section may not be disclosed or is unavailable, then the prevailing value for purposes of this chapter equals the arithmetic average acquisition cost C.I.F. (at the refinery inlet in the same market in which the taxpayer's Alaskan oil is refined) of up to six oils selected by the department including
(1) up to three domestic oils of substantially similar quality which are sold in significant quantities in the same market or near the same market; and
(2) up to three imported oils of substantially similar quality which are sold in significant quantities in the same market or near the same market.
(c) The respective acquisition cost C.I.F. at the refinery inlet in a market for each of the sources of oil used in this section equals the sum of
(1) the respective official government sales price or posted price of the oil (with adjustments for differentials and surcharges) appearing in the latest Platt's Oilgram Price Report published on or before the last day of a month; plus
(2) the respective tanker transportation cost of the oil from its port of origin to ship's rail in the same market as that in which the taxpayer's Alaskan oil is refined, to be calculated
(A) by multiplying the London Tanker Broker's average freight rate assessment ("AFRA") applicable to that voyage during that month for AFRA LR 2 (Long range 2) oil tankers, by the most recently published Worldscale rate for that voyage; or
(B) by applying another applicable freight rate if foreign flag vessels are prohibited from transporting that oil; plus
(3) any canal tolls and expenses not included in the applicable freight rate for that voyage; plus
(4) pipeline or other carrying charges.
History: Eff. 5/21/81, Register 78
Art. IV, Â§ 18
AS 43.21.020 (b)
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Last modified 7/05/2006