Opinion ID: 1307781
Heading Depth: 2
Heading Rank: 4

Heading: carry-overs

Text: Under Union's approach, the amount of tax exemption computed by separate accounting exceeded the tax liability of the entire consolidated group for 1975 and 1976. In its 1977 return, Union claimed it was entitled to carry over the unused portion to apply against its tax liability for that year. Under the Hearing Officer's decision, an even larger amount of the tax exemption computed by separate accounting is unused, since the amount of the exemption available for each year is limited to Collier's tax liability as determined by formulary apportionment. To allow carry-overs of this excess would run counter to treating the exemption as what the term means  an exemption from actual tax liability. Absent the exemption, taxes on the Kenai plant's income would not be computed under separate accounting, so an exemption computed by separate accounting should not be directly applied against the consolidated tax liability either in the year the income was generated or in the future. Union acknowledges that the Certificate does not directly address the carry-over issue. The principle that exemption contracts should be strictly construed against the taxpayer is applicable here to prevent an inference that carry-overs are permissible. The unused portion does not reflect the exempt plant's actual tax liability in the absence of the exemption. Since we find no merit to any of the challenges to the Department's decision, the superior court decision is AFFIRMED.