Alaska Administrative Code › Title 15 - Revenue › Chapter 55 - Oil and Gas Production Tax and Oil Surcharge › Article 3 - Tax Credits › 15 AAC 55.315 - Carried-forward annual loss credits

Current through May 31, 2024
(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.
Authority:
AS
					 43.05.080
AS
					 43.55.023
AS
					 43.55.110
AS
					 43.55.160
Sec. 39, ch. 3 SSSLA
					 2017