Alaska Administrative Code
Title 15 - Revenue
Chapter 20 - Alaska Net Income Tax
Article 4 - Corporate Net Income Tax; Special Rules for Oil and Gas Corporations
15 AAC 20.421 - Apportionment of petroleum business income of a taxpayer subject to AS 4320144

Universal Citation: 15 AK Admin Code 15 AAC 20.421

Current through August 30, 2024

(a) A taxpayer that is subject to AS 43.20.144, the unitary business of which is predominantly a petroleum business, shall apportion all unitary business income determined under AS 43.20.144 to this state using the apportionment factor of the entire unitary business determined under AS 43.20.144 and applicable regulations.

(b) If the unitary business of a taxpayer that is subject to 43.20.144 is not predominantly a petroleum business, the taxpayer:

(1) shall segregate its business income determined under AS 43.20.144 and apportion the petroleum business income of its unitary business to this state using the apportionment factor of the entire unitary business determined under AS 43.20.144 and applicable regulations and shall apportion the other business income of its unitary business to this state using the apportionment factor of the entire unitary business determined under AS 43.19 and 15 AAC 19.131 - 15 AAC 19.900;

(2) shall apportion the general overhead and administrative expenses of its unitary business as a part of the taxpayer's other business income; and

(3) may, for assets of domestic corporations included in its combined report, depreciate assets used principally for its other business, using the methods employed for those assets for federal income tax purposes.

(c) For purposes of (a) and (b) of this section, a taxpayer's unitary business is predominantly a petroleum business if the sum of the gross receipts of the petroleum business divided by the gross receipts of the entire unitary business, plus the payroll of the petroleum business divided by the payroll of the entire unitary business, plus the average property and capitalized rents of the petroleum business divided by the average property and capitalized rents of the entire unitary business, divided by three exceeds 50 percent. The gross receipts, payroll, and average property and capitalized rents of the petroleum business and of the entire unitary business shall be determined under AS 43.19 and 15 AAC 19.131 - 15 AAC 19.900.

(d) In this section, "petroleum business" means oil and gas operations and business activities that are related to or incidental to oil and gas operations, in which

(1) "oil and gas operations" include the following activities: exploration, production, refining, manufacturing, processing, transportation, and marketing of oil and gas or any commodity, product, or feedstock derived from oil or gas, including petrochemicals, whether or not acquired from or transferred between parts of the unitary business; and

(2) a business activity is related to or incidental to oil and gas operations if the activity is conducted in the regular course of oil and gas operations, is customary in the oil and gas business, is within the scope of what an oil and gas business does, or is an integral, functional, necessary or operative component of oil and gas operations; activities that are related to or incidental to oil and gas operations include:
(A) sales of non-petroleum goods at gasoline stations or similar wholesale or retail outlets;

(B) centralized financing, insurance, or other service activities that finance, insure, or otherwise provide services to the oil and gas operations; and

(C) sales of tangible and intangible assets used in or acquired for oil and gas operations.

In 2012 the revisor of statutes, acting under AS 01.05.031, renumbered former AS 43.20.072 as AS 43.20.144. As of Register 204 (January 2013), the regulations attorney made conforming technical revisions under AS 44.62.125(b)(6), to 15 AAC 20.421, so that cross-references to former AS 43.20.072 now refer to the renumbered statute, AS 43.20.144. In addition, the regulations attorney made a conforming technical revision to the authority citation that follows 15 AAC 20.421, so that the citation to former AS 43.20.072 now refers to the renumbered statute, AS 43.20.144.

Authority:AS 43.05.080

AS 43.20.031

AS 43.20.144

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