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 55.260 - Direct charges

Current through May 31, 2024
(a) Except as
				limited by (d) and (e) of this section, direct charges for purposes of
				15 AAC 55.250(b) are
(1) costs paid to real property owners to
				acquire surface rights in real property located in the vicinity of oil or gas
				exploration, development, or production operations, and used in support of
				those operations;
(2) net profit
				shares required to be paid to the state under leases issued under
				AS
				38.05.180(f)(3)(B), (D), or
				(E) and paid after June 30, 2007;
(3) labor costs, not including work on tax,
				legal, purchasing, or accounting matters, or matters involving a dispute before
				a government agency, in the form of salaries and wages of
(A) employees of the operator, when those
				employees are directly employed in or in support of oil or gas exploration,
				development, or production operations, and
(i)
				on the site or in the vicinity of those operations;
(ii) in transit to or from the site or
				vicinity of those operations;
(iii)
				on a site of a system described in
				15 AAC 55.250(c) (10) or (11) if
				assigned to and working on that system; or
(iv) on the site of the construction,
				transportation, repair, or maintenance of a facility, a system, equipment, or
				infrastructure described in
				15 AAC 55.250(c) (9) - (11) or (16) if
				assigned to and working on that construction, transportation, repair, or
				maintenance; or
(B) any
				of the following employees of the operator, while those employees are assigned
				to a specific lease or property or unit that is the subject of oil or gas
				exploration, development, or production, and only as to that portion of the
				salaries and wages attributable to the time actually devoted to that
				exploration, development, or production, as supported by an approved timesheet
				or other time writing document:
(i) technical
				employees having special and specific engineering, geological, or other
				technical skills, including engineers, geologists, geophysicists, environmental
				specialists, and other technical personnel whose primary function with respect
				to that exploration, development, or production is the handling of specific
				problems or operating conditions involving the oil or gas exploration,
				development, or production operations or the support of those
				operations;
(ii) employees engaged
				in developing field automation systems dedicated to and specific to a unit or a
				lease or property and necessary for oil or gas production operations of the
				unit or the lease or property;
(iii) employees engaged in developing
				computer applications specific to a unit or a lease or property and necessary
				for oil or gas development or production operations of the unit or the lease or
				property;
(4)
				costs of employee training that directly relates to the job duties for the
				employees described in (3) of this subsection; the costs of professional
				memberships, dues, or periodicals, or of education or training in pursuit of an
				academic degree or professional credential, are not direct charges;
(5) expenditures or contributions made under
				assessments imposed by governmental authority that are applicable to the
				operator's labor costs described in (3) of this subsection; as to workers'
				compensation, if the operator self-insures, it may treat as an expenditure or
				contribution under this paragraph the charge that is regularly recorded as an
				accrual in the operator's general ledger as representing the fair and
				reasonable cost of the self-insurance;
(6) reasonable expenses incurred or
				reimbursed by the employer of those employees described in (3) of this
				subsection for travel by those employees to or from the site or vicinity of oil
				or gas exploration, development, or production operations, and for associated
				living quarters and meals; a reasonable per diem allowance, if paid by the
				employer in place of reimbursement of actual expenses, may be substituted for
				actual expenses for living quarters and meals;
(7) the employer's share of contributions to
				established plans for employee group life, disability, or medical insurance,
				pension, retirement, stock purchase, thrift, bonus, or other similar benefit
				plans, applicable to the operator's labor costs described in (3) of this
				subsection, if
(A) the plans are available on
				a regular basis to all employees of the operator who are directly working in
				oil or gas exploration, development, or production operations, other than
				employees excluded from a plan's coverage because of participation under a
				collective bargaining agreement; and
(B) the amount of the employer's share of
				contributions does not exceed the following percentage, as applicable, of the
				costs under (3) of this subsection incurred for employees covered by the plans:
(i) 32 percent for calendar year
				2006;
(ii) 33 percent for calendar
				year 2007;
(iii) 36 percent for
				calendar year 2008;
(iv) 35 percent
				for calendar year 2009;
(v) 30
				percent for a calendar year after 2009;
(8) the employer's share of contributions to
				established plans for employee group life, disability, or medical insurance,
				pension, retirement, stock purchase, thrift, bonus, or other similar benefit
				plans, applicable to the operator's labor costs described in (3) of this
				subsection, and available to employees under a collective bargaining
				agreement;
(9) costs to purchase or
				transport a facility, equipment, materials, or supplies used in oil or gas
				exploration, development, or production operations;
(10) costs to purchase or transport a
				facility, a system, equipment, or infrastructure described in
				15 AAC 55.250(c) (10), (11), or (16), or
				to purchase or transport equipment, materials, or supplies used in a facility,
				a system, equipment, or infrastructure described in
				15 AAC 55.250(c) (10), (11), or (16);
(11) costs paid to a third party for contract
				services, utilities, or use of a facility, equipment, or infrastructure
				provided by the third party and used in oil or gas exploration, development, or
				production operations, or used in support of those operations, or for use of a
				system described in
				15 AAC 55.250(c) (10) or (11) provided
				by the third party; for purposes of this paragraph,
(A) contract services
(i) do not include work in tax, legal, or
				accounting matters, or matters involving a dispute before a government
				agency;
(ii) are limited to
				services the labor costs of which, under (3) of this subsection, would be
				allowable as direct charges if the operator's employees performed the
				services;
(B) support
				facilities, equipment, and infrastructure are limited to the categories
				described in
				15 AAC 55.250(c) (16);
(12) costs charged to a unit or
				other joint operation for use in its oil or gas exploration, development, or
				production operations of a facility or equipment that
(A) is wholly or partly owned by a producer
				or explorer with an interest in the unit or other joint operation;
				and
(B) is not, and has not
				previously been, wholly or partly owned or acquired by or on behalf of the unit
				or other joint operation;
(13) a premium paid to a third-party insurer
				for insurance covering oil or gas exploration, development, or production
				operations;
(14) standby costs paid
				to a third party drilling rig contractor, and incurred
(A) while rig operations are deferred,
				suspended, or curtailed by reason of force majeure or another cause beyond the
				reasonable control of the operator; or
(B) to secure a rig for drilling if the rig
				is actually used for the operation for which it was secured;
(15) payments of property taxes,
				sales or use taxes, motor fuel taxes, or excise taxes if incurred with respect
				to the sale, acquisition, ownership, or use of a good, service, or property,
				the cost of which is a lease expenditure under
				AS
				43.55.165, or would be a lease expenditure if
				incurred during the period for which the payment is made;
(16) payments in lieu of property taxes,
				sales or use taxes, motor fuel taxes, or excise taxes that would otherwise be
				incurred with respect to the sale, acquisition, ownership, or use of goods,
				services, or property, the cost of which is a lease expenditure under
				AS
				43.55.165, or would be a lease expenditure if
				incurred during the period for which the payment is made;
(17) a regulatory cost charge under
				AS
				31.05.093;
(18) a fee charged by a government agency for
				a regulatory license, permit, or similar regulatory approval required for oil
				or gas exploration, development, or production operations, or for a facility,
				equipment, or infrastructure described in
				15 AAC 55.250(c) (16);
(19) costs to transport to the injection
				site, oil, gas, or other fluid recovered from a well and injected for reservoir
				pressure maintenance, repressuring, or enhanced recovery purposes, and costs
				paid to a third party producer to purchase that oil, gas, or other fluid from
				the producer;
(20) if a producer
				owns a refinery or crude oil topping plant that is located on or near the
				premises of the producer's lease or property in the state and that processes
				the producer's oil produced from that lease or property into a product that the
				producer uses in the operation of the lease or property in drilling for or
				producing oil or gas, the amount calculated by subtracting from the fair market
				value of the product used the prevailing value of the oil that is processed;
				for purposes of this paragraph,
(A) the amount
				of the oil that is processed equals the number of barrels of the product into
				which the oil is processed;
(B) the
				prevailing value of the oil that is processed in a field topping plant in the
				Alaska North Slope area is the gross value at the point of production of that
				oil as determined under
				15 AAC 55.163(b);
(21) costs paid to a third party to acquire
				geological or geophysical data used in oil or gas exploration, development, or
				production operations.