15 Alaska Admin. Code § 55.315

Current through September 25, 2024

Section 15 AAC 55.315 - Carried-forward annual loss credits

(a) Except as provided in 15 AAC 55.305, a carried-forward annual loss tax credit under AS 43.55.023(b), as the provisions of that subsection read before January 1, 2018, may not be applied against a tax liability for the calendar year in which the adjusted lease expenditures on which the credit is based are incurred.

(b) A determination of a carried-forward annual loss subject to AS 43.55.023(b)(2), as the provisions of that paragraph read before January 1, 2018, for oil and gas produced before January 1, 2018, may be performed by subtracting the reduction under AS 43.55.160(f) or (g) from the amount of excess adjusted lease expenditures otherwise calculated under 15 AAC 55.206(b) for the segment described in 15 AAC 55.206(c)(1)(A). Only the remainder, if positive, constitutes excess adjusted lease expenditures that may establish a carried-forward annual loss under AS 43.55.023(b), as the provisions of that subsection react before January 1, 2018, for oil and gas produced before January 1, 2018. If the remainder is zero or less, there is no carried-forward annual loss.

(c) The following examples illustrate (b) of this section:

Example 1. Producer A produces only oil in a calendar year after 2016 that qualifies for a 20 percent reduction in the gross value at the point of production under AS 43.55.160(f) but not a reduction under AS 43.55.160(g). The gross value at the point of production, before reduction, is $10 million. After reduction under AS 43.55.160(f), the gross value at the point of production is $8 million. The producer's adjusted lease expenditures for the calendar year applicable to the oil are $9 million. The annual production tax value of the oil would be calculated by deducting $9 million from $8 million, except that an annual production tax value may not be less than zero. Therefore, the annual production tax value of the oil is zero, and the $1 million in adjusted lease expenditures that are not deductible are considered excess adjusted lease expenditures. However, for the purpose of determining a carried-forward annual loss and a potential tax credit under AS 43.55.023(b)(2), as the provisions of that paragraph read before January 1, 2018, for oil and gas proiaaiced before January 1, 2018, the $2 million reduction in the gross value at the point of production is subtracted from that $1 million in excess adjusted lease expenditures. This results in a negative value. Therefore, there is no carried-forward annual loss under AS 43.55.023(b)(2), as the provisions of that paragraph read before January 1, 2018, for oil and gas produced before January 1,2018, and no tax credit.

Example 2. The facts are the same as in Example 1 except that the producer's adjusted lease expenditures for the calendar year applicable to the oil are $11 million instead of $9 million. In this situation, the annual production tax value of the oil again is zero, but the amount of excess adjusted lease expenditures is $3 million. After the $2 million reduction in the gross value at the point of production is subtracted from the $3 million figure, the resulting excess adjusted lease expenditures are $1 million. Therefore, there is a $1 million carried-forward annual loss under AS 43.55.023(b)(2), as the provisions of that paragraph read before January 1,2018. for oil and gas produced before January 1, 2018.

15 AAC 55.315

Eff. 5/3/2007, Register 182; am 3/1/2017, Register 221, April 2017; am 1/1/2018,Register 224, January 2018; am 12/6/2018, Register 228, January 2019

Authority:AS 43.05.080

AS 43.55.023

AS 43.55.110

AS 43.55.160

Sec. 39, ch. 3 SSSLA 2017