Alaska Administrative Code › Title 15 - Revenue › Chapter 55 - Oil and Gas Production Tax and Oil Surcharge › Article 2 - Production Tax Value of Oil and Gas › 15 AAC 55.224 - Lease expenditures incurred after June 30, 2007, for Cook Inlet, for gas used in the state, and for oil and gas subject to AS 43.55.011 (p)

Current through May 31, 2024
(a) For purposes of the calculations required
				under (d), (e), or (f) of this section, in calculating an annual production tax
				value for a segment described in
				15 AAC 55.206(c)(1)(C), (D), (E), or (F), a producer shall deduct applicable
				adjusted lease expenditures for the calendar year to the maximum extent that
				deductibility is allowed under applicable law, including (d), (e), or (f), as
				applicable of this section.
(b)
				Repealed 1/1/2022.
(c) This section
				applies to lease expenditures incurred after June 30, 2007.
(d) For a calendar year after 2013 and before
				2017 for which a limitation under
				AS
				43.55.011(j), (k), (o), or
				(p) on the tax levied by
				AS
				43.55.011(e) has the effect
				of reducing the producer's tax on oil or gas produced from one or more leases
				or properties below the amount of the tax that would be levied in the absence
				of that limitation, the producer shall account under this subsection for
				adjusted lease expenditures that are excess adjusted lease expenditures, if
				any, under
				15 AAC 55.206(b) in the calculation of
				annual production tax values for segments described in
				15 AAC 55.206(c)(1)(C), (D), (E), or (F). Only the amount, if any, of those excess
				adjusted lease expenditures that is calculated under (7) of this subsection may
				be used to establish a carried-forward annual loss under
				AS
				43.55.023(b), as the
				provisions of that subsection read before January 1, 2018. The fraction of the
				amount calculated under (7) of this subsection that is subject to a 25 percent
				tax credit under
				AS
				43.55.023(b), as the
				provisions of that subsection read before January 1, 2018, is equal to the
				amount calculated under (1) of this subsection divided by the sum of the
				amounts calculated under (1) and (2) of this subsection. The fraction of the
				amount calculated under (7) of this subsection that is subject to a 45 percent
				tax credit under
				AS
				43.55.023(b), as the
				provisions of that subsection read before January 1, 2018, in the case of lease
				expenditures incurred after December 31, 2013, and before January 1, 2016, or a
				35 percent tax credit under
				AS
				43.55.023(b), as the
				provisions of that subsection read before January 1, 2018, in the case of lease
				expenditures incurred after December 31, 2015 and before January 1, 2017, is
				equal to the amount calculated under (2) of this subsection divided by the sum
				of the amounts calculated under (1) and (2) of this subsection. The
				calculations to be perfomied for the accounting under this subsection are as
				follows:
(1) calculate the total amount of
				excess adjusted lease expenditures subject to this subsection for segments
				described in
				15 AAC 55.206(c)(1)(C), (D), and (F) and
				for segments described in
				15 AAC 55.206(c)(1)(E) for gas produced
				from leases or properties no part of which is north of 68 degrees North
				latitude;
(2) calculate the total
				amount of excess adjusted lease expenditures subject to this subsection for
				segments described in
				15 AAC 55.206(c)(1)(E) for gas produced
				from leases or properties that include land north of 68 degrees North
				latitude;
(3) sum the amounts
				calculated under (1) and (2) of this subsection and multiply that sum by 35
				percent;
(4) calculate for each
				segment the amount by which a limitation under
				AS
				43.55.011(j), (k), (o), or
				(p) reduces the amount of the producer's tax
				otherwise levied by
				AS
				43.55.011(e);
(5) sum the total of the reductions
				calculated under (4) of this subsection for all affected segments;
(6) if the amount calculated under (3) of
				this subsection is
(A) greater than the
				amount calculated under (5) of this subsection, subtract the latter amount from
				the former amount;
(B) equal to or
				less than the amount calculated under (5) of this subsection, consider the
				amount calculated under this paragraph to be zero;
(7) divide the amount calculated under (6) of
				this subsection by 0.35.