Revisor’s notes. —

The provisions of this title were redrafted in 1983 to remove personal pronouns pursuant to § 4, ch. 58, SLA 1982, and in 1983, 1990, 2002, 2012, and 2020 to make other minor changes.

Cross references. —

For a temporary provision relating to the COVID-19 public health disaster emergency declared on March 11, 2020, that provides an extension of certain deadlines under this chapter until July 15, 2020, see § 11, ch. 10, SLA 2020 in the 2020 Temporary and Special Acts.

Administrative Code. —

For revenue regulations, see 15 AAC.

Chapter 05. Administration of Revenue Laws.

Administrative Code. —

For administration of revenue laws, see 15 AAC 05.

Article 1. Department of Revenue.

Cross references. —

For provision requiring the department to consult with the Alaska Energy Authority on a plan for developing infrastructure to deliver more affordable energy to areas of the state that are not expected to have direct access to a North Slope natural gas pipeline, as well as a plan for funding that infrastructure, to be provided by the Alaska Energy Authority to the legislature before January 1, 2017, see sec. 75, ch. 14, SLA 2014 in the 2014 Temporary and Special Acts.

Collateral references. —

71 Am. Jur. 2d, State and Local Taxation, §§ 107-115.

84 C.J.S. Taxation §§ 700, 707-711.

Sec. 43.05.010. Duties of commissioner.

The commissioner of revenue shall

  1. exercise general supervision and direct the activities of the Department of Revenue;
  2. supervise the fiscal affairs and responsibilities of the department;
  3. prescribe uniform rules for investigations and hearings;
  4. keep a record of all departmental proceedings, record and file all bonds, and assume custody of returns, reports, papers, and documents of the department;
  5. adopt a seal and affix it to each order, process, or certificate issued by the commissioner;
  6. keep a record of each order, process, and certificate issued by the commissioner, and keep the record open to public inspection at all reasonable times;
  7. hold hearings and investigations necessary for the administration of state tax and revenue laws;
  8. except as provided in AS 43.05.405 43.05.499 and in AS 44.64.030 , hear and determine appeals of a matter within the jurisdiction of the Department of Revenue and enter orders on the appeals that are final unless reversed or modified by the courts;
  9. issue subpoenas to require the attendance of witnesses and the production of necessary books, papers, documents, correspondence, and other things;
  10. order the taking of depositions before a person competent to administer oaths;
  11. administer oaths and take acknowledgments;
  12. request the attorney general for rulings on the interpretation of the tax and revenue laws administered by the department;
  13. call upon the attorney general to institute actions for recovery of unpaid taxes, fees, excises, additions to tax, penalties, and interest;
  14. issue warrants for the collection of unpaid tax penalties and interest and take all steps necessary and proper to enforce full and complete compliance with the tax, license, excise, and other revenue laws of the state;
  15. report to the legislature before February 15 of each year the total amount of contributions reported and the total amount of credit claimed during the previous calendar year under AS 43.20.014 , AS 43.55.019 , AS 43.56.018 , AS 43.65.018 , AS 43.75.018 , and AS 43.77.045 ;
  16. consult with the commissioner of natural resources on negotiation of contracts and development of terms for inclusion in proposed contracts associated with a North Slope natural gas project;
  17. direct the disposition of revenue received from gas delivered to the state under AS 43.55.014(b) by entering into agreements with the commissioner of natural resources related to the management of the custody and disposition of gas delivered to the state under AS 43.55.014(b) .

History. (§ 48-2-9 ACLA 1949; § 7-1-8 ACLA 1949; am § 3 ch 61 SLA 1980; am § 13 ch 161 SLA 1984; am § 38 ch 168 SLA 1990; am § 35 ch 126 SLA 1994; am § 7 ch 108 SLA 1996; am § 8 ch 92 SLA 2003; am § 62 ch 163 SLA 2004; am § 12 ch 92 SLA 2010; am §§ 40, 41 ch 14 SLA 2014; am § 21 ch 61 SLA 2014)

Delayed repeal of paragraph (15). —

Under secs. 21 and 37, ch. 61, SLA 2014, as amended by sec. 40, ch. 101, SLA 2018, paragraph (15) is repealed January 1, 2025.

Cross references. —

For provision requiring the commissioner to identify a range of financing options for state acquisition of an ownership interest and participation in a North Slope natural gas project, and to develop a plan and suggested legislation to allow a municipality, regional corporation, or resident of the state to participate as a co-owner in a North Slope natural gas pipeline, and to present both to the legislature at the time the commissioner of natural resources submits the first agreement or contract to the legislature for approval under AS 38.05.020(b)(11) , see sec. 76, ch. 14, SLA 2014 in the 2014 Temporary and Special Acts.

For provision requiring the department to consult with the Alaska Energy Authority on a plan for developing infrastructure to deliver more affordable energy to areas of the state that are not expected to have direct access to a North Slope natural gas pipeline as well as a plan for funding that infrastructure, to be provided by the Alaska Energy Authority to the legislature before January 1, 2017, see sec. 75, ch. 14, SLA 2014 in the 2014 Temporary and Special Acts.

For governor’s transmittal letter for ch. 14, SLA 2014, which added paragraphs (16) and (17), see 2014 Senate Journal 1423 — 1426.

Administrative Code. —

For hearing procedures, see 15 AAC 5, art. 1.

For application of tax, see 15 AAC 21, art. 1.

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

For warehouses, see 15 AAC 60, art. 2.

Opinions of attorney general. —

This section does not require publication of hearing decisions, even though they are technically orders of the commissioner and subject to the publication requirement of this section, since this section must be read in conjunction with AS 43.05.230 , and, in addition, AS 09.25.100 (now AS 40.25.100 ), both of which prohibit disclosure of the “particulars” of the business of a taxpayer except when in connection with investigations or court proceedings. June 16, 1983 Op. Att’y Gen.

When the taxpayer files the notice of appeal, a Department of Revenue hearing decision may be made public because the taxpayer is, in effect, waiving any right to confidentiality he may have had. June 16, 1983 Op. Att’y Gen., modifying March 12, 1980 Op. Att’y Gen.

The department can publish decisions that have not been appealed or for which confidentiality was not voluntarily waived if it establishes guidelines for publication to protect a taxpayer’s identity. June 16, 1983 Op. Att’y Gen.

Notes to Decisions

Department of Revenue’s failure to affix the seal of the commissioner of revenue to a summons issued under AS 43.05.040 was harmless error. Department of Revenue v. Oliver, 636 P.2d 1156 (Alaska 1981).

Administratively dissolved corporation was properly assessed corporate income taxes under this section where the Office of Tax Appeals and the superior court had subject matter jurisdiction, pursuant to Alaska Const. art. IV, § 1, AS 43.05.405 , 43.05.435 , 22.10.020 , and 43.05.480 , to determine the taxability of corporations operating in the state; such corporation did not cease to exist where it maintained active bank accounts, entered into contracts, and leased vehicles after it had been dissolved by the State of Washington. Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006).

Cited in

Wien Air Alaska, Inc. v. State, Dep't of Revenue, 647 P.2d 1087 (Alaska 1982).

Sec. 43.05.020. Collection agencies.

The commissioner may employ a collection agency outside the state to assist in the collection of revenue owed to the state. The commissioner may pay for these services by entering into contingent fee agreements the commissioner considers reasonable, or by the payment of amounts out of the proper appropriation for the department the commissioner considers reasonable.

History. (§ 48-2-9(y) 1949; § 1 ch 100 SLA 1960)

Sec. 43.05.025. Audit agents.

The commissioner may employ agents outside the state to assist in the audit of books and records located outside the state. Agents employed under this section are subject to the restrictions of AS 43.05.230 .

History. (§ 1 ch 166 SLA 1976)

Sec. 43.05.030. Branch offices.

The department may establish branch offices essential for the efficient administration of its duties.

History. (§ 48-2-8 ACLA 1949)

Sec. 43.05.040. Inspection of records or premises and issuance of subpoenas.

  1. The department may examine the books, papers, records, or memoranda of any person to ascertain the correctness of a return filed or to determine whether a tax is due, or in an investigation or inspection in connection with tax matters. The records and the premises where a business is conducted shall be open at all reasonable times for official inspection, and the department may subpoena any person to appear and produce books, records, papers, or memoranda bearing upon tax matters and to give testimony or answer interrogatories under oath respecting tax matters. The department may administer oaths to persons who are so subpoenaed. A subpoena issued under this section may compel attendance of a witness or production of a document or thing, located either inside or outside the state, to the maximum extent permitted by law.
  2. A subpoena may be served by the commissioner of public safety or a peace officer designated by the commissioner of public safety, by a person designated by the Department of Revenue, or as otherwise provided by law. A subpoena may also be served by registered or certified mail for delivery restricted only to the person subpoenaed. The return delivery receipt must be addressed so that the receipt is returned to the department.
  3. If a person who is subpoenaed neglects or refuses to obey the subpoena issued as provided in this section, the department may report the fact to the superior court or the appropriate court of another jurisdiction, and may seek an order from the court compelling obedience to the subpoena. The court, to the maximum extent permitted by law, may compel obedience to the subpoena to the same extent as witnesses may be compelled to obey the subpoenas of the court.

History. (§ 48-2-12(a), (b) ACLA 1949; am § 4 ch 61 SLA 1980; am § 21 ch 168 SLA 1990; am § 8 ch 108 SLA 1996; am § 6 ch 92 SLA 2003)

Administrative Code. —

For hearing procedures, see 15 AAC 5, art. 1.

For special rules: water transportation carriers, see 15 AAC 19, art. 11.

For warehouses, see 15 AAC 60, art. 2.

Notes to Decisions

Constitutionality of summons. —

Department of Revenue’s summons [now subpoena] which was reasonably specific, asked only for material relevant to a legitimate tax inquiry, and was enforceable only by court order, did not violate taxpayer’s right against unreasonable searches and seizures. Department of Revenue v. Oliver, 636 P.2d 1156 (Alaska 1981).

For a discussion of the proper scope of summons [now subpoena] issued by the Department of Revenue under this section, see Department of Revenue v. Oliver, 636 P.2d 1156 (Alaska 1981).

Harmless error. —

Department of Revenue’s failure to affix the seal of the commissioner of revenue to a summons [now subpoena] issued under this section was harmless error. Department of Revenue v. Oliver, 636 P.2d 1156 (Alaska 1981).

Sec. 43.05.045. Electronic submission of return or report.

  1. Unless an exemption is granted under (b) of this section, a taxpayer required to submit a return or report for a tax levied under this title or for any other tax administered by the department shall submit the return or report electronically in a format prescribed by the department. Failure to comply with this section may result in a civil penalty under AS 43.05.220(f) . If a law under this title requires a report or return or a portion of a report or return to be in writing, an electronically filed report or return satisfies this section. A taxpayer shall submit attachments to a report or return required under this title electronically.
  2. To request an exemption to (a) of this section, a taxpayer shall submit to the department evidence satisfactory to the department that the taxpayer does not have the capability to submit the return or report electronically. An application for an exemption must be submitted before a return or report is due. An exemption granted under this subsection is valid for five years after the first tax filing due date after the exemption is granted. When an exemption under this subsection expires, the taxpayer may apply for another exemption. An exemption granted under this subsection applies to any return or report submitted to the department.

History. (§ 1 ch 20 SLA 2016)

Effective dates. —

Section 9, ch. 20, SLA 2016, makes this section effective July 1, 2016.

Sec. 43.05.050. Return by department upon failure to make return or making false or fraudulent return.

If a person fails to file a return at the time prescribed by law or by regulation, or makes, wilfully or otherwise, a false or fraudulent return, the department shall make the return from the information it obtains. A return made by the department is prima facie good and sufficient for all legal purposes.

History. (§ 48-2-13 ACLA 1949)

Notes to Decisions

Application of privilege against self-incrimination. —

The privilege against self-incrimination does not extend to the right to refuse to file a tax return. Department of Revenue v. Oliver, 636 P.2d 1156 (Alaska 1981); Cogan v. State, Dep't of Revenue, 657 P.2d 396 (Alaska 1983).

A blanket refusal to disclose any financial information on a tax return based on the privilege against self-incrimination is equivalent to filing no return at all. Department of Revenue v. Oliver, 636 P.2d 1156 (Alaska 1981); Cogan v. State, Dep't of Revenue, 657 P.2d 396 (Alaska 1983).

The privilege against self-incrimination may be validly claimed in a prosecution for failure to file to avoid answering particular questions on a tax return if the answers to those questions would tend to incriminate an individual. Department of Revenue v. Oliver, 636 P.2d 1156 (Alaska 1981).

Computation of tax based on W-2 forms. —

An individual’s privacy rights were not violated by the state’s computation of tax liability based on W-2 forms after that person failed to file a tax return because the state did not ask the person anything but rather simply imposed a tax based on available information. Cogan v. State, Dep't of Revenue, 657 P.2d 396 (Alaska 1983).

Sec. 43.05.060. Agreements with department respecting liability.

The department may enter into an agreement with a person relating to the liability of the person, or of a person or estate the person represents, for a tax, license fee, or excise tax for a period ending before the date of the agreement. If the agreement is approved by the attorney general, the agreement is final and conclusive and, except upon a showing of fraud or malfeasance, or misrepresentation of a material fact, the case may not be reopened as to the matters agreed upon or the agreement modified. In a suit or proceeding relating to the tax liability of the taxpayer the agreement may not be annulled, modified, set aside, or disregarded.

History. (§ 48-2-14 ACLA 1949)

Administrative Code. —

For administration, see 15 AAC 21, art. 6.

Opinions of attorney general. —

Whenever the department agrees to accept less than the full amount of tax or penalty that has been assessed (as distinguished from making a correction to an assessment in the course of an administrative appeal under AS 43.05.240 ), the department has compromised the tax or penalty within the meaning of AS 43.05.070 , and the attorney general’s approval is required. December 3, 1990, Op. Att’y Gen.

Notes to Decisions

Quoted in

Wien Air Alaska, Inc. v. State, Dep't of Revenue, 647 P.2d 1087 (Alaska 1982).

Sec. 43.05.070. Compromise of tax or penalty.

  1. If in the opinion of the department there is doubt as to the liability of the taxpayer for or the collectibility of a tax, license fee, or excise tax, the department, with the approval of the attorney general, may compromise the tax.
  2. The department, with the approval of the attorney general, may, for cause shown, compromise a penalty accruing under the state tax, license, or excise tax laws.

History. (§ 48-2-15(a), (c) ACLA 1949)

Administrative Code. —

For administration, see 15 AAC 21, art. 6.

Opinions of attorney general. —

Whenever the department agrees to accept less than the full amount of tax or penalty that has been assessed (as distinguished from making a correction to an assessment in the course of an administrative appeal under AS 43.05.240 ), the department has compromised the tax or penalty within the meaning of this section, and the attorney general’s approval is required. December 3, 1990, Op. Att’y Gen.

Sec. 43.05.075. Concealing or falsifying evidence.

A person may not knowingly, in connection with a compromise or offer of a compromise under AS 43.05.070 or in connection with a closing agreement or offer to enter a closing agreement under AS 43.05.060 ,

  1. conceal from an officer or employee of the state property belonging to the estate of the taxpayer or other person liable for the tax; or
  2. receive, destroy, mutilate, or falsify a book, document, or record or make a false statement under oath relating to the estate or the financial condition of the taxpayer or other person liable for the tax.

History. (§ 22 ch 168 SLA 1990)

Sec. 43.05.080. Adoption of regulations.

The department shall adopt and publish regulations necessary for the enforcement of the tax, license, or excise tax laws administered by it. The department shall prepare and distribute all forms necessary or useful in the administration of tax, license, and excise tax laws.

History. (§ 48-2-16 ACLA 1949)

Administrative Code. —

For hearing procedures, see 15 AAC 5, art. 1.

For enforcement, see 15 AAC 10.

For division of income, see 15 AAC 19, art. 1.

For taxable in another state, see 15 AAC 19, art. 2.

For apportionment formula, see 15 AAC 19, art. 3.

For property factor, see 15 AAC 19, art. 4.

For payroll factor, see 15 AAC 19, art. 5.

For sales factor, see 15 AAC 19, art. 6.

For special rules: airlines, see 15 AAC 19, art. 8.

For special rules: land transportation carriers, see 15 AAC 19, art. 9.

For special rules: construction contractors, see 15 AAC 19, art. 10.

For special rules: water transportation carriers, see 15 AAC 19, art. 11.

For corporate net income tax; administration and credits, see 15 AAC 20, art. 2.

For corporate net income tax; combination and apportionment rules, see 15 AAC 20, art. 3.

For corporate net income tax; special rules for oil and gas corporations, see 15 AAC 20, art. 4.

For corporate net income tax; special rules for financial organizations and, see 15 AAC 20, art. 6.

For application of tax, see 15 AAC 21, art. 1.

For taxable income from oil and gas production, see 15 AAC 21, art. 2.

For taxable income from oil and gas pipelines, see 15 AAC 21, art. 3.

For taxable income apportioned to Alaska, see 15 AAC 21, art. 4.

For transition rules, see 15 AAC 21, art. 5.

For administration, see 15 AAC 21, art. 6.

For collection of tax, see 15 AAC 40, art. 4.

For tax return filing requirements; filing credits, see 15 AAC 40, art. 5.

For refunds, see 15 AAC 40, art. 6.

For qualified dealer license and bonding requirements, see 15 AAC 40, art. 7.

For licensing, see 15 AAC 50, art. 1.

For taxation, see 15 AAC 50, art. 2.

For vehicle rental tax, see 15 AAC 52, art. 1.

For excise tax on travel aboard commercial passenger vessels, see 15 AAC 52, art. 2.

For gross value at the point of production of oil and gas, see 15 AAC 55, art. 1.

For production tax value of oil and gas, see 15 AAC 55, art. 2.

For tax credits, see 15 AAC 55, art. 3.

For levy of tax, see 15 AAC 55, art. 4.

For payments and reporting, see 15 AAC 55, art. 5.

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

For administration, see 15 AAC 60, art. 1.

For warehouses, see 15 AAC 60, art. 2.

For licensing and filing requirements, see 15 AAC 65, art. 1.

For computation of tax, see 15 AAC 65, art. 2.

For exemption from tax, see 15 AAC 65, art. 3.

For tax on fisheries business, see 15 AAC 75, art. 1.

For tax imposed on acquisition of fisheries resources, see 15 AAC 75, art. 2.

For tax imposition, see 15 AAC 76, art. 1.

For salmon acquired by buyers, see 15 AAC 76, art. 2.

For salmon prices, see 15 AAC 80.

For tire fees, see 15 AAC 98.

For license officers, see 15 AAC 116, art. 1.

For licensing, see 15 AAC 116, art. 2.

For seafood marketing assessment on processors, see 15 AAC 116, art. 4.

For tax on gaming or gambling activities aboard large passenger vessels, see 15 AAC 165, art. 1.

Notes to Decisions

Applied in

Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Cited in

Wien Air Alaska, Inc. v. State, Dep't of Revenue, 647 P.2d 1087 (Alaska 1982).

Sec. 43.05.085. List of contributions.

The commissioner shall prepare and furnish to the Alaska Public Offices Commission by July 1 of each year a list containing the total amount of contributions received by each candidate and group for which a credit was received by an individual under AS 43.20.013(a) . The commissioner shall also mail a copy of the list to each of the candidates and groups which were recipients of those credited contributions. The list becomes public information under AS 40.25.110 40.25.120 on its delivery to the Alaska Public Offices Commission.

History. (§ 4 ch 76 SLA 1974; am § 111 ch 6 SLA 1984; am § 1 ch 10 SLA 1986)

Revisor’s notes. —

In 2000, “AS 40.25.110 40.25.120 ” was substituted for “AS 09.25.110 — 09.25.120” to reflect the 2000 renumbering of AS 09.25.110 — 09.25.120.

Sec. 43.05.090. Preparation and publication of statistics.

The department shall prepare and annually publish statistics of the revenues derived under the tax laws administered by it.

History. (§ 48-2-17 ACLA 1949)

Sec. 43.05.095. Indirect expenditure report.

  1. The commissioner shall, not later than July 1 before the first regular session of each legislature, submit a report to the chair of the finance committee of each house of the legislature and to the legislative finance division that states, for each indirect expenditure made by the state,
    1. the name of the indirect expenditure;
    2. a brief description of the indirect expenditure;
    3. the statutory authority for the indirect expenditure;
    4. the date the statute authorizing the indirect expenditure is to be repealed, if applicable;
    5. the intent of the legislature in enacting the statute authorizing the indirect expenditure;
    6. the public purpose served by the indirect expenditure;
    7. the estimated annual effect on revenue of the indirect expenditure for the previous five fiscal years, excluding the fiscal year immediately preceding the date the report is due;
    8. the estimated cost to administer the indirect expenditure, if applicable;
    9. the number of beneficiaries of the indirect expenditure.
  2. For purposes of (a) of this section, federal tax credits adopted under AS 43.20.021 shall be reported in the aggregate.
  3. A department, agency, or public corporation of the state shall, upon the request of the commissioner, provide the records, reports, data analysis, or other information necessary for the commissioner to complete the report required by this section. The commissioner may enter into a confidentiality agreement if necessary to obtain information or a record required to prepare the report under this section.
  4. In this section, “indirect expenditure” means an express provision of state law that results in foregone revenue for the state by providing
    1. a tax credit or other credit;
    2. an exemption, but does not include federal tax exemptions adopted by reference in AS 43.20.021 ;
    3. a discount;
    4. a deduction, but does not include costs incurred in the ordinary course of business that are deducted in the calculation of a tax under this title or in the calculation of a royalty or net profit share payment for a lease issued under AS 38;
    5. a differential allowance.

History. (§ 11 ch 61 SLA 2014)

Sec. 43.05.100. Designation of depositories and deposit of money.

  1. [Repealed, § 3 ch 149 SLA 1978.]
  2. The department may designate banks in the state as depositaries of tax revenues and may deposit tax revenues in these banks.

History. (§ 48-2-18 ACLA 1949; am § 3 ch 149 SLA 1978)

Sec. 43.05.110. Property in possession of deceased employee.

The personal representative of a deceased employee of the department who has possession or control of a tax list, record, return, paper, document, or book or money collected shall deliver it to the department.

History. (§ 48-2-19 ACLA 1949; am § 23 ch 168 SLA 1990)

Sec. 43.05.120. Concealing property or evidence. [Repealed, § 38 ch 168 SLA 1990.]

Sec. 43.05.130. Penalty.

A person who, by conduct not described in AS 43.05.290 , violates a provision of AS 43.05.010 43.05.130 or a regulation adopted under those provisions is subject to a civil penalty of not more than $1,000 for each violation.

History. (§ 48-2-12 (c) ACLA 1949; am § 24 ch 168 SLA 1990)

Article 2. Fiscal Responsibilities.

Sec. 43.05.140. Bond of commissioner.

Before taking office, the commissioner shall furnish a bond to the state. The bond shall be approved by the attorney general and filed with the Department of Administration, and a copy of it shall be filed in the attorney general’s office. The bond shall be conditioned that the principal will faithfully discharge the duties of the office, keep a strict, true and correct account of all money disbursed, and that the principal will properly account for it and will pay over to a successor or other person entitled by law to receive it all money or property in the hands or possession of the principal, in accordance with law; or, in default, that the parties executing the bond will pay to the state and others injured all damages, costs, and expenses resulting from the default. The surety on the bond shall be a surety company authorized to transact business in the state. All premiums for the commissioner’s bond shall be paid by the state. The amount of the bond shall be $200,000, but if the funds in the treasury of the state exceed the amount of the bond given by the commissioner, or if for any reason the governor and the Department of Administration consider the bond insufficient they shall notify the commissioner of that fact, and the commissioner shall give the additional bond with sufficient sureties, within the time and in the amount that the governor and the Department of Administration consider necessary for the safety of the state.

History. (§ 7-1-4 ACLA 1949)

Sec. 43.05.150. Collection of state money.

  1. The department shall demand, sue for, collect, receive, and safely keep all money of the state that is not by law entrusted to the care and custody of some other office.
  2. [Repealed, § 53 ch 32 SLA 1971.]
  3. [Repealed, § 53 ch 32 SLA 1971.]
  4. [Repealed, § 53 ch 32 SLA 1971.]
  5. [Repealed, § 9 ch 218 SLA 1976.]

History. (§ 7-1-6 (a) ACLA 1949; am § 1 ch 50 SLA 1949; am § 19 ch 186 SLA 1957; am § 1 ch 39 SLA 1963; am §§ 52, 53 ch 32 SLA 1971; am § 9 ch 218 SLA 1976; am § 4 ch 149 SLA 1978)

Administrative Code. —

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

Sec. 43.05.170. Payment and negotiability of warrants.

A warrant drawn by the Department of Administration against the state treasury must be a negotiable instrument. Upon presentation for payment, the department shall pay all warrants drawn by the Department of Administration against the state treasury that have been properly endorsed and have not been cancelled by law. The commissioner may designate one or more agents for the purpose of redeeming state warrants and may require that these agents be used exclusively for the purpose of redeeming state warrants. Warrants made payable to two or more persons in an amount less than $50 may be paid if endorsed by only one of the designated payees. In this section, “negotiable instrument” has the meaning given in AS 45.03.104(a) .

History. (§ 7-1-6 (c) ACLA 1949; am § 20 ch 186 SLA 1957; am § 1 ch 44 SLA 1969; am § 5 ch 149 SLA 1978; am § 1 ch 37 SLA 2005)

Notes to Decisions

Nature of warrant. —

A warrant is nothing more nor less than an order; it does not have to be in any particular form; it does not have to be in the shape of a negotiable instrument. Sheelor v. Smith, 6 Alaska 398 (D. Alaska 1921).

Sec. 43.05.180. Accounting for state funds.

The department shall keep an account of money received, money disbursed, and money and investments in its custody.

History. (§ 7-1-6 (d), (e) ACLA 1949; am §§ 21, 22 ch 186 SLA 1957; am § 2 ch 44 SLA 1969)

Administrative Code. —

For corporate net income tax; special rules for oil and gas corporations, see 15 AAC 20, art. 4.

Sec. 43.05.190. Embezzlement. [Repealed, § 112 ch 6 SLA 1984. For current law see AS 11.46.210.]

Sec. 43.05.200. Application for and receipt of funds due from United States.

The department shall apply to the federal government for money which is due to the state. The department may receive the money and deposit it in the state treasury to be expended in accordance with the law.

History. (§ 7-1-10 ACLA 1949)

Sec. 43.05.210. Funds received under the Federal Mineral Leasing Act. [Repealed, § 70 ch 14 SLA 1987.]

Article 3. Remedies, Procedure, Interest, and Penalties.

Cross references. —

For additional appeal procedures, see AS 43.05.405 43.05.499 .

Sec. 43.05.220. Civil penalties.

  1. Five percent shall be added to a tax for each 30-day period or fraction of the period during which the taxpayer fails to file at the time or times required by law or regulation a return or report, or pay the full amount of the tax, or a portion or a deficiency of the tax, as finally determined by the department and required by this title, unless it is shown that the failure is due to a reasonable cause and not to wilful neglect.  The penalty may not exceed 25 percent in the aggregate.  The penalty is computed only on the unpaid balance of the tax liability as determined by the department.  The department shall prescribe by regulation circumstances which constitute reasonable cause for purposes of this section.
  2. If a tax deficiency or part of a tax deficiency is due to negligence or intentional disregard of law or regulation without intent to defraud, five percent of the total amount of the tax deficiency shall be assessed, collected, and paid in the same manner as a tax deficiency.
  3. If a tax deficiency or part of a tax deficiency is due to fraud, a civil fraud penalty equal to 50 percent of the tax due or $500, whichever is greater, shall be added to the tax. This penalty is in addition to penalties determined under (a) or (b) of this section.
  4. A person required to collect or account for a tax imposed by this title who wilfully fails to collect the tax or to truthfully account for and pay over the tax, or wilfully attempts to evade payment of the tax is, in addition to other penalties provided by law, liable for a civil penalty equal to the total amount of the tax not collected, not accounted for, not paid over, or evaded.  The penalty imposed by this subsection is in place of the tax not paid to the state.  This penalty shall be paid upon demand by the commissioner or a designee of the commissioner, and shall be assessed and collected in the same manner as taxes are assessed and collected under this title.
  5. A penalty imposed by this section shall be collected at the same time, in the same manner, and as a part of the original tax.  However, if the original tax is paid before neglect or fraud is discovered, the penalty shall be collected in the same manner as the original tax.  Interest may not be collected on a penalty imposed by this section.
  6. Unless the department determines that failure to comply with AS 43.05.045 is due to a reasonable cause, the department shall assess a civil penalty of $25 or one percent of the total tax before any payment, whichever is greater, against a taxpayer who fails to submit electronically a return or report under AS 43.05.045 .

History. (§ 2 ch 166 SLA 1976; am § 1 ch 113 SLA 1980; am § 1 ch 39 SLA 1982; am § 2 ch 20 SLA 2016)

Administrative Code. —

For administration, see 15 AAC 21, art. 6.

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

For warehouses, see 15 AAC 60, art. 2.

For fishery resource landing tax, see 15 AAC 77.

Effect of amendments. —

The 2016 amendment, effective July 1, 2016, added (f).

Notes to Decisions

Reasonable cause for late notification. —

The Office of Tax Appeals erred in finding that the corporation had reasonable cause for notifying the Department of Revenue of changes to its federal tax returns more than sixty days after the IRS’s action, because being “too busy” is not reasonable cause for late filing, and the corporation cannot avoid the late filing penalty. Dep't of Revenue v. Dyncorp & Subsidiaries, 14 P.3d 981 (Alaska 2000).

Collateral references. —

What constitutes “reasonable cause” under state statutes imposing penalty on taxpayer for failure to file timely tax return unless such failure was due to “reasonable cause.” 29 ALR4th 413.

Sec. 43.05.225. Interest.

Unless otherwise provided,

  1. a delinquent tax  under this title
    1. before January 1, 2014, bears interest in each calendar quarter at the rate of five percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District as of the first day of that calendar quarter, or at the annual rate of 11 percent, whichever is greater, compounded quarterly as of the last day of that quarter;
    2. on and after January 1, 2014,  and before January 1, 2018, bears interest in each calendar quarter at the rate of three percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District as of the first day of that calendar quarter;
    3. on and after January 1,  2018, bears interest in each calendar quarter at the rate of  5.25 percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District as of the first day of that calendar quarter, compounded quarterly as of the last day of that quarter;
  2. the interest rate is 12 percent a year for
    1. delinquent fees payable under  AS 05.15.095(c) ; and
    2. unclaimed property that is not timely paid or delivered, as allowed by  AS 34.45.470(a) .

History. (§ 2 ch 166 SLA 1976; am § 2 ch 82 SLA 1982; am § 2 ch 23 SLA 1991; am § 46 ch 107 SLA 1996; am § 2 ch 10 SLA 2013; am § 8 ch 4 4SSLA 2016; am § 3 ch 3 SSSLA 2017)

Revisor’s notes. —

Subparagraph (2)(B) was formerly (2)(C); relettered in 2012 to conform to the 1996 repeal of what was formerly (2)(B).

Cross references. —

For transition provision relating to the interest that a delinquent tax under AS 43.55 bears each calendar quarter of 2017, see sec. 36, ch. 3, SSSLA 2017, in the 2017 Temporary and Special Acts.

Administrative Code. —

For administration, see 15 AAC 21, art. 6.

Effect of amendments. —

The 2016 amendment, effective January 1, 2017, in (1)(B), inserted “except as provided in (C) of this paragraph,” following “January 1, 2014”, added (1)(C), and made stylistic changes.

The 2017 amendment, effective January 1, 2018, in (1)(B), substituted “and before January 1, 2018” for “except as provided in (C) of this paragraph”; in (1)(C), substituted “January 1, 2018” for “January 1, 2017”, and in (1)(C)(i) deleted “For the first three years after a tax becomes delinquent” at the beginning, and substituted “5.25 percentage” for “seven percentage”, deleted (1)(C)(ii), which read, “after the first three years after a tax becomes delinquent, does not bear interest;”; made related and stylistic changes.

Legislative history reports. —

For the governor’s transmittal letter concerning the amendment of this section by § 2, ch. 23, SLA 1991 (CSSB 158 (FIN)(efd am)), see 1991 Senate Journal, p. 405.

Notes to Decisions

Cited in

Vokacek v. Vokacek, 933 P.2d 544 (Alaska 1997).

Sec. 43.05.230. Disclosure of tax returns and reports.

  1. It is unlawful for a current or former officer, employee, or agent of the state to divulge the amount of income or the particulars set out or disclosed in a report or return made under this title, except
    1. in connection with official investigations or proceedings of the department, whether judicial or administrative, involving taxes due under this title;
    2. in connection with official investigations or proceedings of the child support enforcement agency, whether judicial or administrative, involving child support obligations imposed or imposable under AS 25 or AS 47;
    3. as provided in AS 38.05.036 pertaining to audit functions of the Department of Natural Resources;
    4. as provided in AS 43.05.405 43.05.499 ; and
    5. as otherwise provided in this section or AS 43.55.890 .
  2. The department, upon written request, shall furnish to the taxpayer a copy of the taxpayer’s tax return upon payment of a fee of $1 per page.
  3. The department may permit the proper officer of the United States or of a state, territory or possession of the United States or of Canada or of a province or territory of Canada, or the officer’s authorized representative, to inspect tax returns or reports filed with the department, or may furnish to the officer or representative a copy of the tax return, if the other jurisdiction grants substantially similar privileges to the department or its representative or to counsel for the state, and if the department determines that the other jurisdiction provides adequate safeguards for the confidentiality of the returns and reports, and that the returns and reports will be used for tax purposes only. The department may also permit the division responsible for employment and training services of the state Department of Labor and Workforce Development to inspect tax returns or reports filed with the department or may furnish a copy of the tax returns for tax purposes only.
  4. The commissioner may furnish to the Multistate Tax Commission or other authorized agent information contained in the tax returns, reports, related schedules and documents filed under an audit or investigation of a multistate business made by the department.  This information may be furnished for tax purposes only.  The Multistate Tax Commission or other authorized agent may make the information available to the tax officials of other states, the District of Columbia, and the United States and its territories for tax purposes only.
  5. Nothing in this section prohibits the publication of statistics so classified as to prevent the identification of particular returns or reports or the publication of delinquent lists showing the names of taxpayers who have failed to pay their taxes at the time and in the manner provided by law, together with other relevant information which in the opinion of the department may assist in the collection of delinquent taxes.
  6. A wilful violation of the provisions of this section or of a condition imposed under AS 43.55.040 (1)(B) is punishable by a fine of not more than $5,000, or by imprisonment for not more than two years, or by both.
  7. The information contained in a license issued by the commissioner of revenue or the commissioner of commerce, community, and economic development under AS 43.40, AS 43.50, AS 43.60, AS 43.65, AS 43.70, and AS 43.75 is public information.
  8. The commissioner shall, upon request, furnish to the Department of Natural Resources copies of tax returns, reports, and other documents filed under AS 43.55 or AS 43.65, and the Department of Revenue’s determinations and workpapers under those chapters. The Department of Natural Resources shall maintain the confidentiality that the Department of Revenue is required to extend to the returns, reports, documents, determinations, and workpapers furnished to the Department of Natural Resources under this subsection.
  9. The commissioner shall, upon request, furnish to the Department of Environmental Conservation or the Department of Fish and Game all names and addresses of businesses that are required to file confidential reports under AS 43.75.015 . The Department of Environmental Conservation and the Department of Fish and Game shall maintain the confidentiality that the Department of Revenue is required to extend to the names and addresses furnished under this subsection.
  10. The name of each person claiming a credit and the amount of credit received for each gas storage facility by that person under AS 43.20.046 is public information. The commissioner shall furnish the information to the Regulatory Commission of Alaska on request.
  11. The name of each person that the department has allowed to make an election under AS 43.55.014(a) and the amount of gas produced from each lease or property to which an effective election under AS 43.55.014 applies is public information.
  12. For tax credit certificates purchased by the department in the preceding calendar year under AS 43.55.028 , the department shall make the following information public by April 30 of each year:
    1. the name of each person from which the department purchased a transferable tax credit certificate; and
    2. the aggregate amount of the tax credit certificates purchased from the person in the preceding calendar year.

History. (§ 2 ch 166 SLA 1976; am § 32 ch 126 SLA 1977; am § 5 ch 61 SLA 1980; am §§ 2, 3 ch 113 SLA 1980; am E.O. No. 68, § 3 (1988); am § 9 ch 101 SLA 1989; am § 9 ch 108 SLA 1996; am § 3 ch 37 SLA 1998; am § 7 ch 92 SLA 2003; am § 63 ch 163 SLA 2004; am § 2 ch 2 TSSLA 2006; am §§ 12, 13 ch 1 SSSLA 2007; am § 11 ch 16 SLA 2010; am § 42 ch 14 SLA 2014; am § 1 ch 37 SLA 2015; am E.O. No. 118, § 3 (2016); am § 9 ch 4 4SSLA 2016)

Revisor’s notes. —

In 1999, in this section, “commissioner of commerce and economic development” was changed to “commissioner of community and economic development” in accordance with § 88, ch. 58, SLA 1999, and “Department of Labor” was changed to “Department of Labor and Workforce Development” in accordance with § 90, ch. 58, SLA 1999. In 2004, in (g) of this section, “commissioner of community and economic development” was changed to “commissioner of commerce, community, and economic development”, in accordance with § 3, ch. 47, SLA 2004.

In 2004, “child support enforcement agency” was changed to “child support services agency” in (a) of this section in accordance with § 12(a), ch. 107, SLA 2004.

In 2016, “division responsible for employment and training services” was substituted for “employment security division” in the last sentence of (c) to implement E.O. No. 118, Sec. 3.

Cross references. —

For governor’s transmittal letter for ch. 14, SLA 2014, which added subsection (k), see 2014 Senate Journal 1423 — 1426.

For the governor's transmittal letter for Executive Order 118 which amended subsection (c), see 2016 Senate Journal 1581 — 1582.

Administrative Code. —

For mining production royalty, see 11 AAC 86, art. 9.

Effect of amendments. —

The 2016 amendment, by E.O. 118, in (c), substituted “division responsible for employment and training services” for “employment security division”. E.O. No. 118, § 4, provides that the 2016 amendment to subsection (c) takes “effect July 1, 2016.” However, E.O. No. 118 was signed by the governor July 28, 2016.

The 2016 amendment, effective January 1, 2017, added ( l ).

Legislative history reports. —

For governor’s transmittal letter for ch. 1, SSSLA 2007 (HB 2001), presenting, among other matters, proposals to establish new rules affecting information sharing between the departments principally responsible for oil and gas production tax and royalty collection activities, see 2007 House Journal 1547 — 1550.

Opinions of attorney general. —

Division of audit to have access to records of state agencies, whether confidential or not. 1972 Op. Att’y Gen., issued under former AS 43.20.190 .

A legislative auditor may not examine confidential records on file for state income tax returns and wage information submitted by employees and employers to the Department of Labor in connection with the administration of the State Employment Security Act to determine if persons receiving assistance from the Department of Health and Social Services under their Adult Public Assistance and Aid to families with dependent children were eligible. Such data is within the ambit of protection intended to be afforded the right of privacy under § 22, art. I, of the Alaska Constitution. 1972 Op. Att’y Gen., issued under former AS 43.20.190 .

When the taxpayer files the notice of appeal, a Department of Revenue hearing decision may be made public because the taxpayer is, in effect, waiving any right to confidentiality he may have had. June 16, 1983 Op. Att’y Gen., modifying March 12, 1980 Op. Att’y Gen.

The department can publish decisions that have not been appealed or for which confidentiality was not voluntarily waived if it establishes guidelines for publication to protect a taxpayer’s identity. June 16, 1983 Op. Att’y Gen.

Publication of delinquent taxpayer lists under subsection (e) would not violate Ak. Const. art. I, § 22, which guarantees the right of privacy. August 21, 1985 Op. Att’y Gen.

Subsection (e), authorizing publication, does not conflict with subsection (a), which makes confidential the reports and returns filed under this title since subsection (e) simply exempts from the broader confidentiality provision the name of a delinquent taxpayer. August 21, 1985 Op. Att’y Gen.

For discussion of liability for errors in names and amounts if a list is published under subsection (e), see August 21, 1985 Op. Att’y Gen.

The department may choose to not publish the names of delinquent taxpayers owing less than a certain amount, so long as there is a rational basis for excluding certain names from publication. August 21, 1985 Op. Att’y Gen.

The department may limit publication by publishing certain names in certain localities so long as there is a rational basis for doing so. August 21, 1985 Op. Att’y Gen.

Adoption of regulations setting forth the dates of publication and other pertinent information and providing notice regarding publication to the taxpayer at the time notice and demand is made, taken together, would provide adequate notice to each delinquent taxpayer, sufficient to satisfy due process requirements. August 21, 1985 Op. Att’y Gen.

The department should be relatively immune from attack on due process and other grounds for publishing a list of delinquent taxpayers owing more than a certain amount if publication is not made until notice has been provided under AS 43.05.245 and the appeal period under AS 43.05.240 has run. August 21, 1985 Op. Att’y Gen.

The Department of Revenue could disclose information obtained in the audit of Big Three Industries, Inc., to Big Three Lincoln Alaska, Inc., in the course of the hearing process on Big Three Lincoln’s administrative appeal of the determination that it was engaged in a unitary business with Big Three Industries. September 10, 1986 Op. Att’y Gen.

The Alaska Seafood Marketing Institute may not have access to a list of processors whose total value paid for seafood products during the previous calendar year exceeds $50,000, since the list can only be produced by extracting information from tax returns of seafood processors and since release of the list would divulge exactly which processors reported over $50,000 paid for seafood during the previous calendar year. September 9, 1987 Op. Att’y Gen.

Under limited circumstances, the Department of Revenue may disclose confidential tax records to members of the legislative branch under AS 09.25.100 (now AS 40.25.100 ) and this section. January 12, 1989 Op. Att’y Gen., distinguishing 1972 Op. Att’y Gen. No. 8 and overruling January 17, 1986 Inf. Att’y Gen. Op. to the extent that it conflicts with this opinion.

Fisheries business license applications are required to be kept confidential and may not be released, even to such agencies as the National Marine Fisheries Service and the state Division of Fish & Wildlife Protection. July 26, 1989 Op. Att’y Gen.

Notes to Decisions

Constitutionality. —

Given the lack of connection between most information sought on a tax return and a person’s more intimate concerns and the confidentiality protections afforded by this section, the state’s interest in the implementation of its tax system justifies and outweighs any privacy rights violated by compulsion to fill out tax forms or testify before a revenue agent. Department of Revenue v. Oliver, 636 P.2d 1156 (Alaska 1981).

Initiative. —

Ballot summary's statement was an inaccurate and misleading statement because a section of the initiative directly conflicted with AS 40.25.100 , making tax information in the Department of Revenue's possession confidential; the initiative further conflicted with AS 43.05.230 , and the initiative's text did not explain how it would interact with those existing statutes. Office of Lieutenant Governor, Div. of Elections v. Vote Yes For Alaska's Fair Share, 478 P.3d 679 (Alaska 2021).

Subsection (c) provides adequate protection for an invasion of privacy rights that might occur as the result of the implementation of the state tax system. Cogan v. State, Dep't of Revenue, 657 P.2d 396 (Alaska 1983).

An individual’s privacy rights were not violated by the state’s computation of tax liability based on W-2 forms after that person failed to file a tax return because the state did not ask the person anything but rather simply imposed a tax based on available information. Cogan v. State, Dep't of Revenue, 657 P.2d 396 (Alaska 1983).

Protective order held proper where the parties disputed whether the information which would be contained in the accounting, particularly the dates and amounts of individual settlements, would effectively reveal both the identity of individual taxpayers and “particulars” of their returns. Hickel v. Halford, 872 P.2d 171 (Alaska), modified, — P.2d — (Alaska 1994).

Collateral references. —

Validity, construction, and effect of state laws requiring public officials to protect confidentiality of income tax returns or information. 1 ALR4th 959.

Sec. 43.05.240. Taxpayer remedies.

  1. A taxpayer aggrieved by the action of the department in fixing the amount of a tax or penalty may apply to the department within 60 days after the date of mailing of the notice required to be given to the taxpayer by the department, giving notice of the grievance, and requesting an informal conference to be scheduled with an appeals officer. The taxpayer shall be given access to the taxpayer’s file in the department in the matter for preparation for the informal conference. At the informal conference, the taxpayer may present to the appeals officer arguments and evidence relevant to the amount of tax or penalty due the state. If the department determines that a correction is warranted, the department shall make the correction.
  2. A party who believes that the appeals officer is unduly delaying a hearing process may notify the commissioner in writing. Within 30 days after being notified by a party, the commissioner may issue an order prescribing a schedule for the appeals officer to complete the informal conference or setting a meeting at which that schedule will be discussed and prescribed. The schedule may be subsequently modified by consent of the parties. If the commissioner fails to issue an order within 30 days after receiving notice of a party’s belief of undue delay, the department’s action in fixing the amount of tax or penalty shall be considered to have been summarily affirmed by the appeals officer the same as if an informal conference decision to that effect were issued on the last day of that 30-day period.

History. (§ 2 ch 166 SLA 1976; am § 10 ch 108 SLA 1996)

Administrative Code. —

For hearing procedures, see 15 AAC 5, art. 1.

For warehouses, see 15 AAC 60, art. 2.

Opinions of attorney general. —

For effect of the statute of limitations on assessments on consideration of new issues during taxpayer appeals, see notes to AS 43.05.260 . October 16, 1984 Op. Att’y Gen.

The enforcement division can consolidate a tax enforcement action with taxpayer’s appeal to the superior court and proceed to judgment before the revenue decision is reviewed unless the taxpayer files a request for a stay and an accompanying supersedeas bond under Appellate Rule 603(a)(2) to prevent collection proceedings pending appeal. December 7, 1984 Op. Att’y Gen.

The department cannot use the AS 43.20.270 distraint on property procedures when a taxpayer has appealed an assessment under this section. December 7, 1984 Op. Att’y Gen.

Whenever the department agrees to accept less than the full amount of tax or penalty that has been assessed (as distinguished from making a correction to an assessment in the course of an administrative appeal under this section), the department has compromised the tax or penalty within the meaning of AS 43.05.070 , and the attorney general’s approval is required. December 3, 1990, Op. Att’y Gen.

The term “administrative proceeding” in Alaska Const., art. IX, § 17 does not include the informal conference process established by this section for the resolution of tax disputes. The amendment applies only to the proceeds of disputes that have progressed to an adjudicatory stage of the dispute resolution process. 1992 Alas. Op. Att'y Gen. No. 1.

Notes to Decisions

Means of challenging tax assessment. —

Under this section and App. R. 601-611, the exclusive means of challenging a tax assessment is by appeal to the superior court. Fedpac Int'l, Inc. v. State, Dep't of Revenue, 646 P.2d 240 (Alaska 1982).

Superior court, applying the doctrine of exhaustion of administrative remedies, did not err in dismissing taxpayer’s complaint under Alaska’s Declaratory Judgment Act, where its claims for declaratory relief could be characterized as raising both constitutional and nonconstitutional issues, as well as mixed questions of law and fact. Standard Alaska Prod. Co. v. State, Dep't of Revenue, 773 P.2d 201 (Alaska 1989).

Collateral estoppel. —

If a later proceeding is concerned with a similar or unlike claim relating to a different tax year, a prior judgment acts as a collateral estoppel only as to those matters in the second proceeding which were actually presented and determined in the first suit. State v. Baker, 393 P.2d 893 (Alaska 1964) (Decided under former AS 43.70.050 ).

Res judicata. —

If a claim of liability or nonliability relating to a particular tax year is litigated, a judgment on the merits is res judicata as to any subsequent proceeding involving the same claim and the same tax year. State v. Baker, 393 P.2d 893 (Alaska 1964) (Decided under former AS 43.70.050 ).

Quoted in

Bethel Utils. Corp. v. City of Bethel, 780 P.2d 1018 (Alaska 1989).

Cited in

Sjong v. State, Dep't of Revenue, 622 P.2d 967 (Alaska 1981); Cogan v. State, Dep't of Revenue, 657 P.2d 396 (Alaska 1983); Hickel v. Halford, 872 P.2d 171 (Alaska 1994); Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006); Exxon Mobil Corp. v. Dep't of Revenue, 488 P.3d 951 (Alaska 2021).

Sec. 43.05.241. Administrative appeal.

For a matter within the jurisdiction of the office of administrative hearings (AS 44.64) under AS 43.05.405 , the taxpayer aggrieved by an informal conference decision entered under AS 43.05.240 may file with the office of administrative hearings a notice of appeal for formal hearing, as provided in AS 43.05.430 , no later than 30 days after service of the decision resulting from an informal conference.

History. (§ 11 ch 108 SLA 1996; am § 64 ch 163 SLA 2004)

Editor’s notes. —

Section 17, ch. 108, SLA 1996 provides as follows: “This Act does not affect the remedies and procedures

“(1) specified in AS 04.11, including AS 04.11.560 ; AS 05.15, including AS 05.15.610 ; AS 42.05, including AS 42.05.551 ; or AS 43.56, including AS 43.56.120 and 43.56.130 ; or

“(2) adopted by regulation by the Department of Revenue governing appeal of a decision of the Department of Revenue regarding

“(A) a game of chance or skill made under AS 05.15;

“(B) a permanent fund dividend under AS 43.23;

“(C) a coin-operated device or punchboard under AS 43.35; or

“(D) a child support obligation under AS 25.27.”

Section 18(a) and (c), ch. 108, SLA 1996 provide as follows: “(a) The remedies and procedures provided by this Act apply to all revenue tax appeals in which a request for formal hearing is filed with the Department of Revenue on or after the effective date of this subsection. The remedies and procedures existing before the effective date of this subsection apply to all revenue tax appeals in which a request for formal hearing was filed with the Department of Revenue before the effective date of this subsection, unless all of the parties to an appeal agree in writing to the remedies and procedures established by this Act.

“(c) Until 15 AAC 05.001 - 15 AAC 05.320 and other Department of Revenue regulations in effect on the effective date of this subsection are revised as necessary, those regulations continue to govern an administrative appeal of a Department of Revenue decision not within the jurisdiction of the office of tax appeals, including a decision regarding a

“(1) game of chance or skill under AS 05.15;

“(2) permanent fund dividend under AS 43.23; and

“(3) coin-operated device or punchboard under AS 43.35.”

Sec. 43.05.242. Judicial appeal challenging validity of tax.

  1. Within 30 days after a decision resulting from the informal conference, a person aggrieved by the action of the department under AS 43.05.240 on a ground specified in this section may appeal to the superior court.
  2. An appeal under this section may be taken from an informal conference decision only with respect to an issue in the assessment for tax, interest, and penalties that the taxpayer raises upon the ground that a tax statute or tax regulation is
    1. violative of the United States Constitution;
    2. violative of the state constitution; or
    3. preempted by federal statute, regulation, or treaty.
  3. An appeal of an issue under this section may not be taken from an informal conference decision if
    1. there is a dispute of material fact;
    2. a factual record is necessary to decide the question of law raised;
    3. development of a factual record will render it unnecessary to reach the question of law raised; or
    4. the taxpayer challenges the assessment of the tax related to the issue on a ground other than one listed in (b) of this section.
  4. An issue may not be presented to the superior court unless the issue first has been presented in writing to the department at or before the informal conference. The department shall prepare a record of that portion of the informal conference relevant to the issue on appeal. The superior court shall
    1. resolve a question of law in the exercise of the independent judgment of the superior court judge;
    2. defer to the department on a question of law for which discretion is legally vested in the department unless not supported by a reasonable basis.
  5. An appeal of the informal conference decision under this section is exclusive as to the issue raised. The taxpayer electing to appeal under this section may not pursue an appeal of the issue under AS 43.05.241 or pursue any other action under another statute on the issue.
  6. When an appeal is taken under this section, the taxpayer shall be given access to the file of the department in the matter for preparation of the appeal.
  7. In an appeal under this section, the amount due shall be paid within 30 days after the date of the service of the informal conference decision. In place of payment of the amount due, the taxpayer may file a bond with the court or otherwise obtain relief from payment in accordance with the Alaska Rules of Appellate Procedure.
  8. Venue for an appeal filed under this section shall be set under rules adopted by the supreme court.
  9. If it is determined that appeal was improperly filed under this section, the appeal shall be transferred to the office of administrative hearings (AS 44.64) for further proceedings under AS 43.05.405 43.05.499 .

History. (§ 11 ch 108 SLA 1996; am § 65 ch 163 SLA 2004)

Cross references. —

For provision requiring an appeal to the superior court under this section to be heard on the record, see AS 22.10.020(d) .

Notes to Decisions

Stated in

Tesoro Corp. v. State, Dep't of Revenue, 312 P.3d 830 (Alaska 2013).

Sec. 43.05.245. Assessment and collection of tax, penalties, and interest.

If a taxpayer fails to file a return or report required by this title in the time required by law or regulation, or makes an erroneous or fraudulent return, the department shall proceed to assess the license fees, tax, penalties, or interest and make a return from information that it obtains. An assessment or a return subscribed by the department in accordance with this section is presumed sufficient for all legal purposes. However, nothing prevents a taxpayer from presenting evidence or other information in an informal conference under AS 43.05.240 or in an appeal under AS 43.05.241 in order to rebut the presumed sufficiency of an assessment or return subscribed by the department, nor does the presumption of sufficiency alter the parties’ respective burdens of proof once the taxpayer has presented evidence or other material information to rebut that presumption. The assessment of license fees, tax, penalties, or interest under this section occurs when the department issues a notice and demand for payment of the license fees, tax, penalties, or interest. The notice and demand for payment is issued when the notice and demand is delivered to the taxpayer in person or placed in the United States mail, addressed to the last known address of the taxpayer. Penalties and interest assessed under this title shall be collected in the same manner as provided in this title for the collection of tax or license fees.

History. (§ 4 ch 113 SLA 1980; am § 12 ch 108 SLA 1996)

Notes to Decisions

Cited in

Hickel v. Halford, 872 P.2d 171 (Alaska 1994); Exxon Mobil Corp. v. Dep't of Revenue, 488 P.3d 951 (Alaska 2021).

Sec. 43.05.250. Payment of taxes.

  1. If a tax is required under this title to be paid on or before a certain date, the date fixed is the last day for the payment.
  2. In addition to money, the department may receive bank drafts, checks, cashier’s checks, or money orders for the payment of taxes under regulations adopted by the department.
  3. The department may adopt other methods of payment including the use of bank depositories, bank and wire transfers, stamps, or other methods necessary or helpful in securing a complete and timely collection of the tax.

History. (§ 2 ch 166 SLA 1976)

Administrative Code. —

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

For seafood marketing assessment on processors, see 15 AAC 116, art. 4.

Sec. 43.05.255. Definition. [Repealed, E.O. No. 68 § 8 (1988).]

Sec. 43.05.260. Limitation on assessment.

  1. Except as provided in (c) of this section, AS 43.20.200(b) , and AS 43.55.075 , the amount of a tax imposed by this title must be assessed within three years after the return was filed, whether or not a return was filed on or after the date prescribed by law. If the tax is not assessed before the expiration of the applicable period, proceedings may not be instituted in court for the collection of the tax.
  2. For purposes of this section, a return filed before the last day prescribed by law or regulation is considered as filed on the last day.
  3. The following exceptions apply to the limitation period in (a) of this section:
    1. in the case of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of the tax may be begun without assessment, at any time;
    2. in the case of a failure to file a return, the tax may be assessed, or a proceeding in court for the collection of the tax may be begun without assessment, at any time;
    3. if, before the expiration of the time prescribed in this section for the assessment of a tax imposed by this title, both the department and the taxpayer have consented in writing to the assessment after the expiration of the time, the tax may be assessed at any time before the expiration of the period agreed upon; however, the period agreed upon may be extended by a subsequent agreement in writing made before the expiration of the period previously agreed upon.

History. (§ 1 ch 94 SLA 1976; am § 113 ch 6 SLA 1984; am § 14 ch 1 SSSLA 2007)

Administrative Code. —

For administration, see 15 AAC 21, art. 6.

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

Opinions of attorney general. —

For opinion discussing tax assessments, see 1963 Alas. Op. Att'y Gen. No. 33 (income taxes).

The statute of limitations does not prohibit the hearing officer adjudicating a taxpayer appeal under AS 43.05.240 from considering evidence relating to new issues material to the tax on appeal in arriving at a decision concerning the correct amount of tax due the state. October 16, 1984 Op. Att’y Gen.

During administrative appeal proceedings the Division of Petroleum Revenue may introduce evidence concerning a different theory or method of valuation or new issues not addressed in the audit report and notice of assessment appealed by the taxpayer. October 16, 1984 Op. Att’y Gen.

The statute of limitations on assessments does not prohibit the hearing officer from determining that the correct amount of tax due the state is more than that stated in the notice of assessment from which the taxpayer appealed. October 16, 1984 Op. Att’y Gen.

If the taxpayer pays the amount of tax in the notice of assessment, the Division of Petroleum Revenue may not reopen the matter and issue an amended assessment after the statute of limitations expires. However, if a notice of assessment is timely issued within the period of limitation under this section and the taxpayer appeals the assessment under AS 43.05.240 , the statute of limitations is suspended for the duration of administrative appeal proceedings. The notice of assessment can be amended after conference and hearing to reflect the decision with respect to the correct amount of tax due the state. October 16, 1984 Op. Att’y Gen.

Oil and gas production taxes under AS 43.55 are separate taxes imposed by different statutes for the purpose of applying the statute of limitations. If a taxpayer pays the assessed tax for oil and appeals only the assessment for gas, the Division of Petroleum Revenue may not issue an amended assessment for oil production taxes after the statute of limitations has run. October 16, 1984 Op. Att’y Gen.

Notes to Decisions

Applicability of subsection (a). —

Subsection (a) of this section will not be given retroactive effect to apply to returns filed before 1976. Williams v. BP Alaska Exploration, 677 P.2d 236 (Alaska 1983).

Subsection (a) of this section, the statute of limitations on the assessment of taxes, does not bar assessments on returns filed prior to January 1, 1976, this section’s effective date. Department of Revenue v. Alaska Pulp Am., 674 P.2d 268 (Alaska 1983).

Subsection (a) of this section does not bar assessments for additional taxes on returns filed prior to January 1, 1976, this section’s effective date. Green Constr. Co. v. State, Dep't of Revenue, 674 P.2d 260 (Alaska 1983).

Taxpayers who fraudulently withhold information cannot benefit from the limitations period in this section. Standard Alaska Prod. Co. v. State, Dep't of Revenue, 773 P.2d 201 (Alaska 1989).

Waiver agreements between the taxpayer and IRS. —

The provisions of this section and AS 43.05.275 regarding the statute of limitations and written agreement to extend that statute do not eliminate the first sentence of AS 43.20.200 (b), which incorporates specific IRC sections concerning extension of the limitations period for assessment. The references to the IRC contained in AS 43.20.200 and 43.20.021 make waiver agreements between the IRS and the taxpayer effective for the purpose of extending the state statute of limitations. Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

A restricted waiver is only effective for state adjustments that are reasonably related to the issues covered by the restricted federal waiver; therefore, a restricted federal waiver extends the state statute of limitations only so far as the issues covered in the restricted waiver would affect state tax liability. Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Cited in

Hickel v. Halford, 872 P.2d 171 (Alaska 1994).

Sec. 43.05.270. Collection after assessment.

  1. When the assessment of a tax imposed by this title has been made within the period of limitation under AS 43.05.260 , the tax may be collected by levy or by a proceeding in court, but only if the levy is made or the proceeding is begun
    1. within six years after the assessment of the tax; or
    2. before the expiration of a period for collection agreed upon in writing by the department and the taxpayer before the expiration of the six-year period; a period agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon; the period provided by this paragraph during which a tax may be collected by levy may not be extended or curtailed because of a judgment against the taxpayer.
  2. The date on which a levy on property or right to property is made is the date on which the notice of seizure is given.

History. (§ 1 ch 94 SLA 1976)

Administrative Code. —

For administration, see 15 AAC 21, art. 6.

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

Notes to Decisions

Administrative proceeding. —

An assessment issued by the Department of Revenue to a taxpayer under this section satisfies all of the essential elements of an administrative proceeding. Hickel v. Halford, 872 P.2d 171 (Alaska), modified, — P.2d — (Alaska 1994).

Sec. 43.05.275. Credit and refund claims.

  1. Except as provided in AS 43.20.021 , a claim for credit or refund of a tax under this title for which a taxpayer is required to file a return or pay a tax may be filed by the taxpayer
    1. before the later of
      1. three years from the time the return was filed; or
      2. two years from the time the tax was paid; or
    2. within two years from the time the tax was paid, if no return was filed.
  2. If the department and the taxpayer have consented to extend the period for assessment of tax as provided in AS 43.05.260(c)(3) , a tax refund claim may be filed at any time before the expiration of the period agreed upon.
  3. A taxpayer who has filed a return, paid the full amount due on the return, and made a claim under this section may, without exhausting administrative remedies, file an action in superior court to recover on the claim if the sole ground for appeal is that a tax statute is
    1. violative of the United States Constitution;
    2. violative of the state constitution; or
    3. preempted by federal statute, regulation, or treaty.
  4. An action may not be brought under (c) of this section if
    1. there is a dispute of material fact;
    2. a factual record is necessary to decide the appeal;
    3. development of a factual record will render it unnecessary to reach a question of constitutional law or federal preemption; or
    4. the taxpayer challenges the assessment of the tax on a ground other than one listed in (c) of this section.

History. (§ 4 ch 113 SLA 1980; am § 13 ch 108 SLA 1996)

Administrative Code. —

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

Notes to Decisions

Waiver agreements between the taxpayer and IRS. —

The provisions of AS 43.05.260 and this section regarding the statute of limitations and written agreement to extend that statute do not eliminate the first sentence of AS 43.20.200(b) , which incorporates specific IRC sections concerning extension of the limitations period for assessment. The references to the IRC contained in AS 43.20.200 and 43.20.021 make waiver agreements between the IRS and the taxpayer effective for the purpose of extending the state statute of limitations. Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

A restricted waiver is only effective for state adjustments that are reasonably related to the issues covered by the restricted federal waiver; therefore, a restricted federal waiver extends the state statute of limitations only so far as the issues covered in the restricted waiver would affect state tax liability. Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Cited in

Principal Mut. Life Ins. Co. v. State, Div. of Ins., 780 P.2d 1023 (Alaska 1989); State v. Carlson, 65 P.3d 851 (Alaska 2003).

Collateral references. —

Construction and operation of statutory time limit for filing claim for state tax refund. 14 ALR6th 119.

Sec. 43.05.280. Interest on overpayments.

  1. Interest shall be allowed and paid on an overpayment of a tax under this title at the rate and in the manner provided in  AS 43.05.225 (1).
  2. Interest shall be allowed and paid as follows:
    1. in the case of a credit, from the date of the overpayment to the due date of the amount against which the credit is taken;
    2. in the case of a refund, from the date of the overpayment to a date, as determined by the department, preceding the date of the refund check by not more than 30 days, whether or not the refund check is accepted by the taxpayer after tender of the check to the taxpayer; the acceptance of the refund check does not affect the right of the taxpayer to claim an additional overpayment and interest on the overpayment.
  3. If an overpayment of a tax imposed by this title is refunded within 90 days after the last date prescribed for filing the return of the tax, determined without regard to an extension of time for filing the return, or if the return is filed after the last filing date and the overpayment is refunded within 90 days after the date the return is filed, interest may not be allowed under (a) of this section on that overpayment.

History. (§ 1 ch 94 SLA 1976; am § 3 ch 82 SLA 1982; am § 3 ch 23 SLA 1991)

Administrative Code. —

For administration, see 15 AAC 21, art. 6.

Notes to Decisions

Applicability. —

Interest rate provided by subsection (a) did not apply to overpayment of fees imposed under Title 16 on nonresident holders of commercial fishing permits and licenses. Recovery was not limited to AS 43.10.210 ; rather, by treating the suit as a common law action in assumpsit, AS 09.30.070 , AS 09.50.280 , and AS 09.50.250 governed a prejudgment interest award against the State. State v. Carlson, 270 P.3d 755 (Alaska), modified, — P.3d — (Alaska 2012).

Applied in

North Slope Borough v. Sohio Petroleum Corp., 585 P.2d 534 (Alaska 1978).

Collateral references. —

Right to interest on income tax refund or credit in absence of specific controlling statute. 88 ALR2d 823.

Sec. 43.05.290. Criminal penalties.

  1. A person who wilfully attempts to evade a tax imposed by this title is, in addition to other penalties provided by this title, guilty of a class C felony.
  2. A person required under this title to collect, account for, and pay over a tax imposed by this title who wilfully fails to collect or truthfully account for and pay over the tax at the time or times required by law or regulation is, in addition to other penalties provided by this title, guilty of a class C felony.
  3. A person required under this title to pay a tax, make a return, keep records, or supply information, who wilfully fails to pay the tax or estimated tax, make the return, keep the records, or supply the information at the time or times required by law or regulation is, in addition to other penalties provided by this title, guilty of a class A misdemeanor.
  4. A person who wilfully makes and subscribes a return or other document required under this title which contains or is verified by a written declaration that it is made under the penalties of perjury which the person does not believe to be true and correct as to every material matter is, in addition to other penalties provided by this title, guilty of a felony and, upon conviction, punishable by a fine of not more than $25,000, or by imprisonment for not more than three years, or by both.
  5. A person who wilfully and knowingly aids or assists in, or procures, or counsels the preparation or presentation in connection with a matter arising under this title of a return, affidavit, claim, or other document that is fraudulent or is false as to a material matter is guilty of a felony whether or not the falsity or fraud is with the knowledge or consent of the person required to present the return, affidavit, claim, or document.  Upon conviction, the person is punishable by a fine of not more than $25,000, or by imprisonment for not more than three years, or by both.
  6. A person who wilfully delivers or discloses to the commissioner or the department a list, return, account, statement, or other document known by the person to be fraudulent or to be false as to a material matter is guilty of a class A misdemeanor.
  7. [Repealed, § 114 ch 6 SLA 1984.]
  8. A person engaging in or attempting to engage in a business, trade, profession, or occupation for which a license is required under this title, who wilfully fails to obtain the license, is guilty of a misdemeanor and, upon conviction, is punishable by a fine of not more than $2,000, or by imprisonment for not more than six months, or by both. This subsection does not apply to a violation of AS 43.70.020 .
  9. In this section “person” includes, but is not limited to, an officer or employee of a corporation or a member or employee of a partnership, who, as officer, employee, or member, is under a duty to perform the act in respect to which the violation occurs.

History. (§ 5 ch 113 SLA 1980; am § 114 ch 6 SLA 1984; am § 5 ch 104 SLA 2008)

Cross references. —

For punishment of class A misdemeanors, see AS 12.55.135(a) for imprisonment and AS 12.55.035 for fines.

For punishment for class C felonies, see AS 12.55.125(e) for imprisonment and AS 12.55.035 for fines.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

For vehicle rental tax, see 15 AAC 52, art. 1.

Notes to Decisions

Exclusiveness of remedy. —

Where a statute provides for the payment of a license fee as the condition of doing any specified business, and also provides that a violator of the act shall, upon conviction, be punished by fine or imprisonment, the remedy by prosecution and punishment so prescribed by the statute is exclusive, unless there is some special provision of law which permits the prosecution of a civil action to recover the license fee. United States v. Jourden, 193 F. 986, 3 Alaska Fed. 770 (9th Cir. Alaska 1912).

Subsection (c) of this section contains substantially the same language as former AS 43.20.335(c). In re Vogt, 642 P.2d 819 (Alaska 1982).

Collateral references. —

Retailer’s or buyer’s defenses against exaction of penalties for failure to file, or deficiency in, state or local sales tax return. 20 ALR4th 952.

Article 4. Tax Appeals.

Sec. 43.05.400. Office of tax appeals established. [Repealed, § 91 ch 163 SLA 2004.]

Sec. 43.05.405. Jurisdiction.

The office has original jurisdiction to hear formal appeals from informal conference decisions of the Department of Revenue under AS 43.05.240 . Appeal to the office may be taken only from an informal conference decision under AS 43.05.240 . AS 44.64.060 does not apply to an administrative hearing under the jurisdiction of the office under this section. Jurisdiction of the office under this section is limited to, and AS 43.05.405 43.05.499 and AS 44.64.070 apply to and govern, an administrative appeal regarding

  1. electric and telephone cooperative taxes under AS 10.25;
  2. a seafood marketing assessment under AS 16.51;
  3. all taxes levied under AS 43, except the property tax assessed under AS 43.56; and
  4. any other taxes administered by the Department of Revenue.

History. (§ 1 ch 108 SLA 1996; am § 66 ch 163 SLA 2004)

Notes to Decisions

Administratively-dissolved corporation was properly assessed corporate income taxes under AS 43.05.010 where the Office of Tax Appeals and the superior court had subject matter jurisdiction, pursuant to Alaska Const. art. IV, § 1, this section, and AS 43.05.435 , 22.10.020 , and 43.05.480 , to determine the taxability of corporations operating in the state; such corporation did not cease to exist where it maintained active bank accounts, entered into contracts, and leased vehicles after it had been dissolved by the State of Washington. Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006).

Quoted in

North Slope Borough v. State, 484 P.3d 106 (Alaska 2021).

Cited in

Dep't of Revenue v. Dyncorp & Subsidiaries, 14 P.3d 981 (Alaska 2000); State, Dep't of Revenue v. BP Pipelines (Alaska) Inc., 354 P.3d 1053 (Alaska 2015).

Sec. 43.05.410. Appointment; term; reappointment. [Repealed, § 91 ch 163 SLA 2004.]

Sec. 43.05.415. Removal. [Repealed, § 91 ch 163 SLA 2004.]

Sec. 43.05.420. Administration.

  1. [Repealed, § 91 ch 163 SLA 2004.]
  2. In addition to qualifications under AS 44.64.040 , an administrative law judge who conducts a proceeding under AS 43.05.405 43.05.499 shall have at least four years of professional experience as a tax attorney, a certified public accountant practicing in the area of tax, or a tax administrator.
  3. The chief administrative law judge may adopt regulations implementing or interpreting AS 43.05.405 43.05.499 , including rules of procedure and evidence for proceedings before the office.

History. (§ 1 ch 108 SLA 1996; am §§ 67, 68, 91 ch 163 SLA 2004)

Sec. 43.05.425. Qualifications; code of conduct. [Repealed, § 91 ch 163 SLA 2004.]

Sec. 43.05.430. Notice of appeal from informal conference decision.

An appeal under the jurisdiction of the office is initiated by filing with the office, and serving upon the commissioner of revenue, a notice of appeal from an informal conference decision of the Department of Revenue under AS 43.05.240 . A notice of appeal from the informal conference decision may be filed or amended after the time for filing has expired only if good cause is shown.

History. (§ 1 ch 108 SLA 1996)

Administrative Code. —

For hearing procedures, see 2 AAC 64, art. 2.

Sec. 43.05.435. Scope and standards for decision.

The administrative law judge shall hear all questions de novo under AS 43.05.405 43.05.499 . The administrative law judge shall

  1. resolve a question of fact by a preponderance of the evidence or, if a different standard of proof has been set by law for a particular question, by that standard of proof;
  2. resolve a question of law in the exercise of the independent judgment of the administrative law judge;
  3. defer to the Department of Revenue as to a matter for which discretion is legally vested in the Department of Revenue, unless not supported by a reasonable basis.

History. (§ 1 ch 108 SLA 1996; am § 69 ch 163 SLA 2004)

Notes to Decisions

Administratively-dissolved corporation was properly assessed corporate income taxes under AS 43.05.010 where the Office of Tax Appeals and the superior court had subject matter jurisdiction, pursuant to Alaska Const. art. IV, § 1, AS 43.05.405 , this section, 22.10.020 , and 43.05.480 , to determine the taxability of corporations operating in the state; such corporation did not cease to exist where it maintained active bank accounts, entered into contracts, and leased vehicles after it had been dissolved by the State of Washington. Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006).

Stated in

Dep't of Revenue v. Dyncorp & Subsidiaries, 14 P.3d 981 (Alaska 2000).

Cited in

North Slope Borough v. State, 484 P.3d 106 (Alaska 2021).

Sec. 43.05.440. Service of documents.

Service of documents required under AS 43.05.405 43.05.499 may be accomplished in any manner authorized under the Alaska Rules of Civil Procedure. If service is done only by mail, the date of service is determined by the date of mailing. If service is done by both mail and hand delivery, the date of service is determined by the earlier of the date of mailing or actual receipt of the documents.

History. (§ 1 ch 108 SLA 1996; am § 170 ch 163 SLA 2004)

Sec. 43.05.445. Discovery.

  1. In an appeal under AS 43.05.405 , discovery may take place only under a plan for discovery approved by the administrative law judge. The administrative law judge shall approve a plan for discovery to the extent consistent with the efficient, just, and speedy conduct of the appeal. The plan may limit or set conditions on discovery and must include provisions for stipulations of fact by the Department of Revenue and the taxpayer. Discovery shall be limited to information that is relevant to the determination of the correct tax or penalty, unless the Department of Revenue or the taxpayer makes a showing that the discovery is reasonably calculated to lead to admissible information.
  2. Requests by the taxpayer for disclosure of public records relating to the appeal are governed by, and the records are disclosed only in accordance with, the plan approved under this section.
  3. Legislative history, reported court decisions, statutes, regulations, or similar documents available for public inspection at a library or the office of the lieutenant governor or through a publicly accessible database must be obtained through those means and may not be sought through discovery.

History. (§ 1 ch 108 SLA 1996)

Sec. 43.05.450. Subpoenas.

An administrative law judge may issue a subpoena to compel attendance of a witness or the production of a document or thing. A subpoena may compel attendance of a witness or production of a document or thing, located either inside or outside the state, to the maximum extent permitted by law. A subpoena may be used for the purpose of discovery or for the purpose of presenting evidence at a formal hearing. A subpoena shall issue upon request of a party, subject to reasonable limitation or conditions set in the subpoena. A subpoena may be enforced by petition to or other appropriate legal proceeding brought in a court of this state or another jurisdiction.

History. (§ 1 ch 108 SLA 1996)

Sec. 43.05.455. Formal hearing.

  1. At or before the formal hearing, a party may present argument and evidence relevant to the amount of the tax or penalty. The administrative law judge shall administer oaths and permit inquiry necessary to determine the proper amount of the tax or penalty.
  2. Each party and witness shall be present during the formal hearing, except that
    1. with the consent of the taxpayer, the administrative law judge may conduct all or part of the hearing by telephone, audio or video teleconference, or other electronic medium; and
    2. with the consent of the parties and the administrative law judge, all or part of the hearing may be conducted through correspondence.
  3. The taxpayer bears the burden of proof on questions of fact by a preponderance of the evidence unless a different standard of proof has been set by law for a particular question.
  4. The formal hearing before the administrative law judge is not required to be conducted with strict adherence to the Alaska Rules of Evidence. Relevant evidence must be admitted if it is probative of a material fact in controversy. Irrelevant and unduly repetitious evidence shall be excluded. Hearsay evidence is admissible if it is the kind of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of a common law or statutory rule that makes improper the admission of the evidence over objection in a civil action. Oral evidence may be taken only on oath or affirmation. The rules of privilege are effective to the same extent that they are recognized in a civil action in the courts of this state, except that relevant documents and other material items that are public records under AS 40.25.100 40.25.295 shall be admissible.
  5. The administrative law judge shall make a record of the proceedings of the appeal, including recordation of the proceedings of a formal hearing by electronic or stenographic means.
  6. The administrative law judge may grant exceptions to the requirements of this section in the interest of justice.

History. (§ 1 ch 108 SLA 1996; am § 24 ch 58 SLA 2010)

Revisor’s notes. —

In 2000, “AS 40.25.100 40.25.220 ” was substituted for “AS 09.25.100 09.25.220 ” to reflect the 2000 renumbering of AS 09.25.100 09.25.220 .

Notes to Decisions

Burden of proof. —

Substantial evidence supported the Office of Administrative Hearings’ decision that a city’s utility did not prove that it supplied purchased natural gas to two customers, and the gas volumes in question were indisputably subject to the gas production tax. The utility did not carry its burden of establishing that it could, and did, distribute purchased gas as it claimed. Municipality of Anchorage v. State, — P.3d — (Alaska Nov. 12, 2015) (memorandum decision).

Sec. 43.05.460. Enforcement.

  1. The administrative law judge and each party is responsible for the efficient, just, and speedy conduct of the formal hearing. The administrative law judge may impose sanctions on the parties for failure to comply with a subpoena, an order respecting discovery, and any other matter regarding conduct of the appeal. In imposing sanctions, the administrative law judge shall be guided by the practices of the courts of this state in imposing sanctions for similar offenses in civil proceedings.
  2. The administrative law judge may
    1. remand the matter for consideration of material new information or material information withheld by a party;
    2. prohibit a party from introducing information previously withheld without good cause, and any other evidence dependent upon the information;
    3. enter an order, upon a showing of good cause,
      1. barring a designated claim or defense;
      2. striking part or all of a pleading of a party; or
      3. dismissing part or all of the appeal; or
    4. grant any other relief that the administrative law judge considers appropriate.
  3. In addition to the remedies of (a) and (b) of this section, a party may seek enforcement of a subpoena or other order of an administrative law judge by the superior court under AS 44.62.590 .

History. (§ 1 ch 108 SLA 1996)

Sec. 43.05.465. Decision; reconsideration; finality.

  1. Within 180 days after the record on the appeal is closed, the administrative law judge shall issue a decision in writing. The decision must contain a concise statement of reasons for the decision, including findings of fact and conclusions of law. In the decision, the administrative law judge may grant relief, provide remedies, and issue any order that is appropriate. The administrative law judge shall serve each party in the case with a copy of the decision. Unless reconsideration is ordered under (c) of this section, the decision under this subsection is the final administrative decision.
  2. A party may request reconsideration of a decision issued under (a) of this section within 30 days after the date of service shown in the certificate of service of the decision. The request must state specific grounds for reconsideration. Reconsideration may be granted if, in reaching the decision, the administrative law judge has
    1. overlooked, misapplied, or failed to consider a statute, regulation, court or administrative decision, or legal principle directly controlling;
    2. overlooked or misconceived some material fact or proposition of law;
    3. misconceived a material question in the case; or
    4. applied law in the ruling that has subsequently changed.
  3. The administrative law judge may issue an order for reconsideration of all or part of the decision upon request of a party. Reconsideration is based on the record, unless the administrative law judge allows additional evidence and argument. A hearing on reconsideration at which additional evidence or argument is offered or received is subject to the procedures applicable to a hearing under AS 43.05.455 .
  4. The power to order reconsideration expires 60 days after the date of service, as shown on the certificate of service, of a decision issued under (a) of this section. If the administrative law judge does not issue an order for reconsideration within the time allowed for ordering reconsideration, a motion for reconsideration is considered denied.
  5. Within 60 days after the close of the record on reconsideration, the administrative law judge shall issue a written decision upon reconsideration. The administrative law judge shall serve each party in the case with a copy of the decision upon reconsideration. The decision upon reconsideration is the final administrative decision.
  6. A final administrative decision becomes final either on the date
    1. 60 days after the date of service of a decision issued under (a) of this section if an order for reconsideration is not issued; or
    2. the decision upon reconsideration is served, as shown by the certificate of service executed by the administrative law judge under (e) of this section.

History. (§ 1 ch 108 SLA 1996)

Notes to Decisions

Time for review. —

Superior court did not abuse its discretion in entertaining a second appeal regarding the assessment of state corporate income tax on an administratively-dissolved corporation because Alaska R. App. P. 521 permitted the superior court to relax the filing deadline of Alaska R. App. P. 602, AS 43.05.480(a) and this section in that a strict adherence to the rules would work surprise or injustice. Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006).

Sec. 43.05.470. Public proceedings and records.

  1. Records, proceedings, and decisions under AS 43.05.405 43.05.499 are confidential, except that the records, proceedings, and decisions become public records and open to the public when the final administrative decision is issued and becomes final.
  2. Upon a showing of good cause, an administrative law judge shall issue a protective order requiring that specified parts of the records, proceeding, or decision shall be kept confidential in a particular appeal. If a protective order is issued, the final administrative decision shall be made public after redacting by deletion or substitution of information as required by the protective order.
  3. The department, in consultation with the chief administrative law judge, shall maintain, index, and make available for public inspection the final administrative decisions, proceedings, and records of the office made public under this section.

History. (§ 1 ch 108 SLA 1996; am § 71 ch 163 SLA 2004)

Sec. 43.05.475. Consistency of decisions.

  1. As to questions of law, a final administrative decision issued under AS 43.05.405 43.05.499 , unless reversed or overruled, has the force of legal precedent.
  2. To promote consistency among legal determinations issued under AS 43.05.405 43.05.499 , the chief administrative law judge may review and circulate among the other administrative law judges the drafts of formal decisions, decisions upon reconsideration, and other legal opinions of the other administrative law judges in the office. The drafts are confidential documents and are not subject to disclosure under AS 40.25.100 40.25.295 or this chapter.

History. (§ 1 ch 108 SLA 1996; am § 72 ch 163 SLA 2004; am § 25 ch 58 SLA 2010)

Revisor’s notes. —

In 2000, “AS 40.25.100 40.25.220 ” was substituted for “AS 09.25.100 09.25.220 ” to reflect the 2000 renumbering of AS 09.25.100 09.25.220 .

Sec. 43.05.480. Judicial review.

  1. Judicial review by the superior court of a final administrative decision may be had by a party to the appeal under AS 43.05.405 43.05.499 by filing a notice of appeal in accordance with the applicable rules of court governing appeals to that court in civil matters. The notice of appeal shall be filed within 30 days after an administrative decision becomes final under AS 43.05.465 . The right to judicial review under this subsection is not affected by the failure to seek reconsideration before the administrative law judge.
  2. The amount due must be paid or refunded within 30 days after the date that the final administrative decision becomes final under AS 43.05.465 . In place of payment of the amount due, a taxpayer who has appealed a final administrative decision may file a bond with the court or otherwise obtain relief from payment in accordance with the Alaska Rules of Appellate Procedure.
  3. Appeals under this section are reviewed under AS 44.62.560 and 44.62.570 .
  4. If, after the appeal is heard, it appears that the final administrative decision was correct, the court shall affirm the decision. If the final administrative decision is incorrect, the court shall determine the amount due. If the taxpayer is entitled to a refund, the court shall order the repayment and the Department of Revenue shall pay the amount due and attach a certified copy of the judgment to the payment. If the court determines that the taxpayer owes an additional amount, the court shall order the payment and the taxpayer shall pay the amount due and attach a certified copy of the judgment to the payment. Any payment required under this subsection shall be paid by the 30th day following the expiration of the time within which an appeal from the superior court decision may be filed, unless the party appealing files a bond or otherwise obtains relief from payment in accordance with the Alaska Rules of Appellate Procedure.

History. (§ 1 ch 108 SLA 1996; am § 73 ch 163 SLA 2004)

Notes to Decisions

Second appeal of state corporate income tax assessment. —

Superior court did not abuse its discretion in entertaining a second appeal regarding the assessment of state corporate income tax on an administratively-dissolved corporation because Alaska R. App. P. 521 permitted the superior court to relax the filing deadline of Alaska R. App. P. 602, this section, and AS 43.05.465 in that a strict adherence to the rules would work surprise or injustice. Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006).

Administratively-dissolved corporation was properly assessed corporate income taxes under AS 43.05.010 where the Office of Tax Appeals and the superior court had subject matter jurisdiction, pursuant to Alaska Const. art. IV, § 1, AS 43.05.405 , 43.05.435 , 22.10.020 , and this section, to determine the taxability of corporations operating in the State; such corporation did not cease to exist where it maintained active bank accounts, entered into contracts, and leased vehicles after it had been dissolved by the State of Washington. Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006).

Sec. 43.05.499. Definitions.

In AS 43.05.405 43.05.499 , unless the context otherwise requires,

  1. “administrative law judge” means an administrative law judge employed or retained by the office;
  2. “commissioner” means the commissioner of administration;
  3. “department” means the Department of Administration;
  4. “discovery” means the use of subpoenas, subpoenas duces tecum, interrogatories, requests for production, requests for admission, depositions, and other methods of civil procedure by which one party to an action may discover information within the knowledge and control of another person;
  5. “legislative history” means the documents of the legislature recording the background and events, including draft bills, correspondence and memoranda, committee reports, tapes and transcripts of hearings, and tapes and transcripts of floor debate concerning consideration of a bill;
  6. “office” means office of administrative hearings (AS 44.64);
  7. “party” means the Department of Revenue or the taxpayer;
  8. “proceeding” means only a proceeding under the jurisdiction of the office;
  9. “subpoena” means a command to appear at a certain time and place to testify, or to appear at a certain time and place to produce books, papers, and other things, and testify;
  10. “tax” means a tax described in AS 43.05.405 , including a seafood marketing assessment under AS 16.51;
  11. “taxpayer” means a person required to pay a tax, including a person required to pay a seafood marketing assessment under AS 16.51.

History. (§ 1 ch 108 SLA 1996; am § 74 ch 163 SLA 2004)

Notes to Decisions

Cited in

State, Dep't of Revenue v. BP Pipelines (Alaska) Inc., 354 P.3d 1053 (Alaska 2015).

Chapter 08. Borrowing in Anticipation of Revenues.

Sec. 43.08.010. Borrowing in anticipation of revenues permitted.

The commissioner is hereby authorized to borrow money on behalf of the state, when in the judgment of the commissioner it becomes necessary in order to meet appropriations for any fiscal year in anticipation of the collection of the revenues for that year. Money borrowed shall be used only for the purposes and within the amounts of appropriations authorized.

History. (§ 1 ch 53 SLA 1964; am § 1 ch 112 SLA 1964)

Revisor’s notes. —

Formerly AS 43.85.010. Renumbered in 1969.

Sec. 43.08.020. Issuance and payment of notes.

The commissioner shall issue notes for the amounts borrowed in anticipation of the collection of revenues, direct or indirect, for that year. The notes issued by the commissioner under this chapter may be renewed from time to time but all such notes and renewals thereof and the interest thereon shall be paid from revenues by the end of the fiscal year next succeeding the year in which the notes were issued.

History. (§ 1 ch 53 SLA 1964; am § 2 ch 112 SLA 1964)

Revisor’s notes. —

Formerly AS 43.85.020. Renumbered in 1969.

Sec. 43.08.030. Security and payment.

Notes issued under this chapter shall, with interest thereon, be paid from revenues in anticipation of the collection of which the same were issued and the full faith, credit, resources, and taxing power of the state are hereby pledged to the payment. To further secure the payment of the notes the commissioner may pledge on behalf of the state such collateral as in the discretion of the commissioner may be necessary to effect such borrowing most advantageous to the state.

History. (§ 1 ch 53 SLA 1964; am § 3 ch 112 SLA 1964)

Revisor’s notes. —

Formerly AS 43.85.030. Renumbered in 1969.

Sec. 43.08.035. Annual appropriation.

  1. There is appropriated each fiscal year from the general fund the amount necessary for the payment of interest on revenue anticipation notes issued under this chapter when the term of those notes measured from the date of issuance to the date of first maturity does not exceed nine months.
  2. The commissioner shall obtain approval of the Legislative Budget and Audit Committee for the expenditure of appropriations made under (a) of this section.
  3. The commissioner shall make available to the legislature by the third Monday of each January a report setting out in detail the amount appropriated from the general fund under this section for the previous fiscal year, the amount anticipated during the current fiscal year, and an amount forecast for the next fiscal year. The commissioner shall notify the legislature that the report is available.

History. (§ 2 ch 127 SLA 1976; am § 84 ch 21 SLA 1995)

Sec. 43.08.040. Sale of notes.

Notes authorized to be issued under this chapter shall be sold by the commissioner in the manner and at the price or prices as the commissioner shall determine, at either public or private sale; however, a note may not be sold at less than par and accrued interest.

History. (§ 1 ch 53 SLA 1964; am § 1 ch 31 SLA 1975)

Revisor’s notes. —

Formerly AS 43.85.040. Renumbered in 1969.

Sec. 43.08.050. Execution of notes.

Notes for money borrowed in anticipation of revenues shall be signed by the governor and countersigned by the lieutenant governor. The governor’s signature may be a facsimile signature.

History. (§ 1 ch 53 SLA 1964)

Revisor’s notes. —

Formerly AS 43.85.050. Renumbered in 1969.

“Secretary of state” was changed to “lieutenant governor” in 1971 in conformity with the 1970 Alaska constitutional amendment (SJR 2) changing the designation of that office.

Sec. 43.08.060. Decision.

The commissioner has discretion to determine the necessity for time, amount, and terms of such borrowing. The reasonable exercise of such discretion shall be final and conclusive.

History. (§ 4 ch 112 SLA 1964)

Revisor’s notes. —

Formerly AS 43.85.060. Renumbered in 1969.

Chapter 10. Enforcement and Collection of Taxes.

Administrative Code. —

For administration of revenue laws, see 15 AAC 05.

For enforcement, see 15 AAC 10.

Article 1. Legal Actions and Liens.

Collateral references. —

72 Am. Jur. 2d, State and Local Taxation, §§ 780-802.

85 C.J.S., Taxation, §§ 1109, 1130-1136, 1160 et seq.

Sufficiency of designation of taxpayer in recorded notice of federal tax lien. 3 ALR3d 633.

Constitutional provision against imprisonment for debt as applicable to nonpayment of tax. 48 ALR3d 1324.

Property owner’s liability for unpaid taxes following acquisition of property by another at tax sale. 100 ALR3d 593.

Special bank deposits as subject of attachment or garnishment to satisfy depositor’s general obligations. 8 ALR4th 998.

Estoppel of state or local government in tax matters. 21 ALR4th 573.

Sec. 43.10.010. Attorney general to prosecute violation of revenue laws.

  1. The attorney general shall prosecute every civil and criminal action growing out of state revenue laws.  The costs of the action shall be paid out of the proper appropriation for the Department of Law.
  2. The attorney general with the approval of the commissioner may retain the services of attorneys to assist in the collection of revenue where it is necessary to prosecute an action for the collection of the revenue or make efforts to collect revenue outside the state.  The commissioner may compensate the attorneys on a direct fee or contingent fee basis at a rate that the commissioner considers fair and reasonable.  If the compensation is for a direct fee the commissioner shall pay for the services from the proper appropriation for the Department of Revenue.

History. (§ 1 ch 36 SLA 1955; am § 1 ch 127 SLA 1960)

Collateral references. —

72 Am. Jur. 2d, State and Local Taxation, §§ 780-802.

Retailer’s failure to pay to government sales or use tax funds as constituting larceny or embezzlement. 8 ALR4th 1068.

Standing of one taxpayer to complain of underassessment or nonassessment of property of another for state and local taxation. 9 ALR4th 428.

Sec. 43.10.015. Bad checks.

If a check or money order is presented to the department in payment of any amount due, and is not paid when presented to the payor, there shall be paid as a penalty by the person who tendered the check or money order, upon notice and demand by the commissioner or a delegate, the sum of $10 or an amount equal to one percent of the amount of the check or money order, whichever is greater. This penalty is in addition to other penalties provided by law and is applicable each time the check or money order is presented to the department or the department is requested by the person tendering the check or money order to present it to the payor. This section does not apply if the person tendered the check in good faith and with reasonable cause to believe that it would be duly paid.

History. (§ 1 ch 217 SLA 1970)

Sec. 43.10.020. Disposition of money collected from actions.

All money derived from civil and criminal actions growing out of state revenue laws shall be deposited in the general fund.

History. (§ 2 ch 36 SLA 1955; am § 2 ch 127 SLA 1960)

Sec. 43.10.030. Distraint on property extended to all state revenue statutes.

The remedy of distraint on property, set out in AS 43.20.270 , applies to all state revenue statutes existing or hereafter enacted for the collection of taxes and license fees.

History. (§ 1 ch 43 SLA 1955; am § 2 ch 94 SLA 1976)

Notes to Decisions

Qualifying as taxpayer under duress. —

One need not incur the risk of penalties, while the validity of the tax is being ascertained judicially, in order to qualify as a taxpayer under duress. State v. Wakefield Fisheries, 495 P.2d 166 (Alaska 1972), overruled, Principal Mut. Life Ins. Co. v. State, Div. of Ins., 780 P.2d 1023 (Alaska 1989).

Collateral references. —

Inadequacy of price as basis for setting aside execution or sheriff’s sale — modern cases. 5 ALR4th 794.

Sec. 43.10.032. Debt to state; enforcement.

  1. Each of the following is a debt to the state:
    1. a tax levied under this title that is due and unpaid;
    2. the interest, penalty, additional amount, or addition to a tax under (1) of this subsection;
    3. a tax levied under this title that has been erroneously refunded; and
    4. the interest, penalty, additional amount or addition to a tax that has been erroneously refunded.
  2. A debt under (a) of this section may be
    1. collected by lien foreclosure; or
    2. recovered in a civil action brought by the state.

History. (§ 6 ch 113 SLA 1980)

Notes to Decisions

Payment of income tax not condition precedent to carrying on business. —

Former AS 43.20.220 , concerning enforcement of income tax provisions, was not reasonably susceptible of a construction that it made payment of the tax a condition precedent to carry on any business, including that in interstate commerce, since forfeiture of the license is made one of the consequences of nonpayment of the tax, not a condition to engaging in business in the first instance. Alaska S.S. Co. v. Mullaney, 84 F. Supp. 561, 12 Alaska 433 (D. Alaska 1949), aff'd, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

Cited in

Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Sec. 43.10.035. Lien.

  1. If a person who is liable to pay a tax or license fee under this title neglects or refuses to pay the tax or license fee after demand, the amount, including interest, additional amount, or assessable penalty, together with costs, is a lien in favor of the state upon all property and right to property, real or personal, belonging to that person.
  2. Unless specifically provided otherwise by law, the lien imposed by this section arises at the time the assessment is made and continues until the amount assessed is paid or a judgment against the taxpayer arising out of the liability is satisfied.

History. (§ 3 ch 94 SLA 1976)

Notes to Decisions

For cases construing former statute relating to tax liens, see Territory of Alaska v. The Arctic Maid, 140 F. Supp. 190, 16 Alaska 126 (D. Alaska 1956), rev'd, 277 F.2d 120 (9th Cir. Alaska 1960); Schlothan v. Einstoss, 17 Alaska 253 (D. Alaska 1957), aff'd, 276 F.2d 806 (9th Cir. Alaska 1960); Schlothan v. Alaska, 276 F.2d 806 (9th Cir. Alaska), cert. denied, 362 U.S. 990, 80 S. Ct. 1079, 4 L. Ed. 2d 1022 (U.S. 1960).

Cited in

Fairbanks N. Star Borough v. Howard, 608 P.2d 32 (Alaska 1980).

Collateral references. —

Superiority of special or local assessment lien over earlier private lien or mortgage, where statute creating such special lien is silent as to superiority. 75 ALR2d 1121.

Duty to pay real-property taxes as affected by time of commencement or termination of life estate. 8 ALR4th 643.

Special bank deposits as subject of attachment or garnishment to satisfy depositor’s general obligations. 8 ALR4th 998.

Sec. 43.10.037. Accounting and disposition of fees. [Repealed, § 28 ch 90 SLA 1991.]

Sec. 43.10.040. Recording and filing of state tax liens. [Repealed, § 45 ch 113 SLA 1980.]

Sec. 43.10.042. Recording lien and certificate of discharge.

  1. A lien imposed under AS 43.10.010 43.10.060 is not valid as against a mortgagee or other lien holder, pledgee, purchaser, or judgment creditor until notice of it is recorded in the records of the recording district where the property subject to the lien is situated. However, regardless of the date the liens are recorded, a lien arising out of a tax due under AS 43.56 and 43.75, including the penalties and interest on the tax, is a lien prior, paramount, and superior to all other liens, mortgages, hypothecations, conveyances, and assignments, upon all the real and personal property of the person liable for the tax, and upon all the real and personal property used with the permission of the owner to carry on the business that is subject to the tax.
  2. AS 40.19.040 applies to a notice of state tax lien and documents relating to a state tax lien as well as to a notice of federal lien and documents relating to a federal lien.

History. (§ 6 ch 113 SLA 1980; am § 39 ch 161 SLA 1988)

Sec. 43.10.045. Suspension of licenses.

In addition to the other penalties imposed in this title, if a person who is authorized to conduct a business by a license issued under the laws of the state fails to pay a tax levied under this title, the license of the person is suspended until the tax imposed by this title, together with interest and penalties, is paid in full.

History. (§ 6 ch 113 SLA 1980)

Sec. 43.10.050. Contents of index. [Repealed, § 45 ch 113 SLA 1980.]

Sec. 43.10.060. Use as evidence.

The recording of a state tax lien certified by the recorder is evidence in all courts in the state and has the same effect as the original.

History. (§ 3 ch 7 SLA 1957)

Article 2. Reciprocity.

Sec. 43.10.070. Reciprocity in collection of taxes.

  1. The courts of the state shall recognize and enforce the liability for taxes lawfully imposed by the laws of every state or territory which extends a like comity in respect to the liability for taxes lawfully imposed by the laws of this state. The officials of a state or territory may bring action in the courts of this state for the collection of their taxes.  The certificate of the secretary of state of the other state or territory that the officials have the authority to collect the taxes sought to be collected by the action is conclusive proof of that authority.
  2. The attorney general may bring action in the courts of other states or territories to collect taxes due the state.

History. (§ 1 ch 41 SLA 1955)

Sec. 43.10.080. Definition of taxes.

In AS 43.10.070 , “taxes” includes

  1. tax and license assessments lawfully made, whether they are based upon a return or other disclosure of the taxpayer, upon the information and belief of the taxing authority, or otherwise;
  2. penalties lawfully imposed under a taxing or licensing statute;
  3. interest charges lawfully added to the tax liability which constitutes the subject of the action.

History. (§ 2 ch 41 SLA 1955)

Secs. 43.10.090 — 43.10.150. Uniform Federal Tax Lien Registration Act. [Repealed, § 43 ch 161 SLA 1988. For current law see, AS 40.19.]

Article 3. Service of Process on Nonresident Businesses.

Collateral references. —

71 Am. Jur. 2d, State and Local Taxation, §§ 190-202.

Sec. 43.10.160. Filing statement and tax bond with department. [Repealed, § 2 ch 93 SLA 1997.]

Sec. 43.10.170. Agent for service of process.

  1. Every nonresident person shall, as a condition precedent to severing or taking resources or transacting or doing business in the state, file with the commissioner of commerce, community, and economic development a duly executed and notarized instrument appointing the commissioner of commerce, community, and economic development the agent upon whom all original process may be served in any action or legal proceeding resulting from the taxpayer’s failure or neglect to pay state taxes or license fees, and agreeing that service of the original process against the nonresident taxpayer is of the same effect as if personally served on the nonresident taxpayer in the state.
  2. The service of process shall be made by leaving a copy with the commissioner of commerce, community, and economic development. If legal action is instituted against the nonresident taxpayer, the commissioner of commerce, community, and economic development shall immediately notify the nonresident by sending a copy of the process by registered letter to the last known address of the taxpayer.
  3. If a nonresident taxpayer fails to appoint the commissioner of commerce, community, and economic development as agent for service of process, service may nevertheless be made upon the commissioner of commerce, community, and economic development, who shall then transmit a copy of the process by registered mail to the last known address of the taxpayer, and this service is binding to the same effect as if personally served on the nonresident taxpayer in the state.

History. (§ 3 ch 71 SLA 1955; am § 2 ch 143 SLA 1962; am § 1 ch 93 SLA 1997)

Revisor’s notes. —

In 1999, in this section, “commissioner of commerce and economic development” was changed to “commissioner of community and economic development” in accordance with § 88, ch. 58, SLA 1999. In 2004, throughout this section, “commissioner of community and economic development” was changed to “commissioner of commerce, community, and economic development”, in accordance with § 3, ch. 47, SLA 2004.

Notes to Decisions

Section merely regulatory. —

This section has been held by the Washington Supreme Court to be strictly a regulatory measure and not within the exceptions of the Buck Act ( 4 USC §§ 105-110). State v. Baker, 393 P.2d 893 (Alaska 1964), overruled in part, Alascom, Inc. v. North Slope Borough, 659 P.2d 1175 (Alaska 1983), citing Alaska v. Baker, 64 Wn.2d 207, 390 P.2d 1009 (Wash. 1964).

And severable from other revenue provisions. See State v. Baker, 393 P.2d 893 (Alaska 1964), overruled in part, Alascom, Inc. v. North Slope Borough, 659 P.2d 1175 (Alaska 1983).

Secs. 43.10.180 — 43.10.200. Proceedings against bond; intent of AS 43.10.160 — 43.10.200; penalties. [Repealed, § 2 ch 93 SLA 1997.]

Article 4. Refunds of Taxes and License Fees.

Collateral references. —

71 Am. Jur. 2d, State and Local Taxation, §§ 515-518.

85 C.J.S., Taxation, §§ 907-972.

Right to interest on tax refunds in absence of specific controlling statute. 88 ALR2d 823.

Right of taxpayer to recover back taxes voluntarily but mistakenly paid a second or successive time. 84 ALR2d 1133.

Liability of executor or administrator to estate because of overpaying or unnecessarily paying tax. 55 ALR3d 785.

Refund of state inheritance or estate tax where claims are proven against estate after tax was paid. 63 ALR3d 924.

Right of surviving spouse to tax refund resulting from joint income tax return. 67 ALR3d 1038.

Construction, and application of “pay-all-taxes” provision in will, as including liability of nontestamentary property for inheritance and estate taxes. 56 ALR5th 133.

Standing of one taxpayer to complain of underassessment or nonassessment of property of another for state and local taxation. 9 ALR4th 428.

Propriety of class action in state courts to recover taxes. 10 ALR4th 655.

Estoppel of state or local government in tax matters. 21 ALR4th 573.

Liability to refund local taxes as within coverage of liability insurance. 21 ALR4th 895.

Recovery of tax paid on exempt property. 25 ALR4th 186.

Sec. 43.10.210. Recovery of overpayments and protested payments.

  1. The Department of Administration shall, with the approval of the attorney general and the Department of Revenue, refund to a taxpayer the amount of a tax paid to the Department of Revenue under protest and deposited in the treasury if
    1. the taxpayer recovers judgment against the Department of Revenue for the return of the tax; or
    2. in the absence of a judgment, it is obvious to the Department of Revenue that the taxpayer would obtain judgment if legal proceedings were prosecuted by the taxpayer.
  2. The Department of Administration shall refund the amount of an overpayment to a taxpayer if the Department of Revenue, on audit of the account in question, determines that a remittance by the taxpayer exceeds the amount due.
  3. If the department and the attorney general determine that a licensee has paid a license tax and is prevented from using the license by court order, administrative decision, or other cause beyond the control of the taxpayer, the Department of Administration shall refund the amount of the license tax to the licensee.

History. (§ 48-7-1 ACLA 1949; am E.O. No. 68, § 4 (1988))

Revisor’s notes. —

Formerly AS 43.15.010. Renumbered in 1990.

Administrative Code. —

For oil and gas exploration, production and pipeline transportation property tax, see 15 AAC 56.

Notes to Decisions

The purpose of this section is to refund taxes unlawfully collected. Mullaney v. Hess, 189 F.2d 417, 13 Alaska 276 (9th Cir. Alaska 1951).

It is intended to liberalize recoveries by creating rights where formerly none existed. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

The purpose of subsection (a) is to liberalize recoveries by creating rights where formerly none existed, and to provide an expeditious method by which state government can obtain necessary revenues. Principal Mut. Life Ins. Co. v. State, Div. of Ins., 780 P.2d 1023 (Alaska 1989).

Two new means of recovery of taxes have been created by this section, and since the common-law action requiring protest, wrongful assessment and duress is not mentioned, it is apparent that the statutory forms are in addition to the one already in existence. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

The statutory counts under subsections (a) and (b) of this section turn largely on legislative intent. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Subsection (a) provides for refund of taxes paid under protest. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Formal protest at time of payment. —

The taxpayer must formally protest the payment of the tax at the time of payment in order to subsequently maintain a statutory cause of action. Carlson v. State, 798 P.2d 1269 (Alaska 1990).

Purpose of protest requirement. —

The protest requirement called for by subsection (a) serves several purposes. It serves as proof that the payment of the tax in question was involuntarily made and it provides notice to the taxing authority that the tax is claimed to be illegal as well as the basis of the taxpayer’s assertion. Principal Mut. Life Ins. Co. v. State, Div. of Ins., 780 P.2d 1023 (Alaska 1989).

The protest requirement may be waived by the taxing authority. Carlson v. State, 798 P.2d 1269 (Alaska 1990).

Subsection (b) provides for return of overpayments, and does not even require a protest, let alone duress. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Subsection (b) implies valid tax but excessive remittance by taxpayer. —

Implicit in subsection (b) is the idea that the tax imposed was valid and has remained unchanged, but that the taxpayer, by the terms of the tax statute at the time of payment, has remitted too much. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

And it contemplates an action by a taxpayer. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

“On audit of account” indicates clerical error. —

Clerical error is indicated by the provision that the tax commissioner (now Department of Revenue) “on audit of the account” should make a refund. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Person paying tax of another. —

The statutory remedies do not provide for a situation where one person pays the personal tax of another. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Plaintiff not the taxpayer. —

Where plaintiff is not the taxpayer, it is not the real party in interest, nor given a right by the statute. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Judgment against tax commissioner. —

This section provides for judgment against the tax commissioner (Department of Revenue) and not the territory (state) itself. Mullaney v. Hess, 189 F.2d 417, 13 Alaska 276 (9th Cir. Alaska 1951).

Interest on refunds. —

This section is silent so far as any provision for interest on tax refunds is concerned. Mullaney v. Hess, 189 F.2d 417, 13 Alaska 276 (9th Cir. Alaska 1951).

Interest is recoverable on tax refunds in absence of express statutory authority therefor. Mullaney v. Hess, 189 F.2d 417, 13 Alaska 276 (9th Cir. Alaska 1951).

This section may well be exclusive as to the situations covered by it. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Held inapplicable to refunds of overpayments of fees under Title 16 on noncommercial fishing permits. —

Interest rate provided by AS 43.05.280(a) did not apply to overpayment of fees imposed under Title 16 on nonresident holders of commercial fishing permits and licenses. Recovery was not limited to this section; rather, treating the suit as a common law action in assumpsit, AS 09.30.070 , AS 09.50.280 , and AS 09.50.250 governed a prejudgment interest award against the State. State v. Carlson, 270 P.3d 755 (Alaska), modified, — P.3d — (Alaska 2012).

Action based on duress. —

Since the section does not cover the duress situation, an action based on duress will still lie. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Payment under protest, duress and an invalid assessment must be alleged in an action outside the statutes. Pacific Am. Fisheries v. Mullaney, 105 F. Supp. 907, 13 Alaska 729 (D. Alaska 1952).

Qualifying as taxpayer under duress. —

One need not incur the risk of penalties, while the validity of the tax is being ascertained judicially, in order to qualify as a taxpayer under duress. State v. Wakefield Fisheries, 495 P.2d 166 (Alaska 1972), overruled, Principal Mut. Life Ins. Co. v. State, Div. of Ins., 780 P.2d 1023 (Alaska 1989).

“Business compulsion” standard of duress. —

Under the “business compulsion” standard of duress, which the supreme court endorses, the taxpayer need not be threatened with imminent incarceration or other disastrous consequences before he may claim duress by business compulsion. The standard is satisfied if, under the circumstances, a reasonably prudent businessman would find it necessary to pay taxes in order to preserve or protect his property. State v. Wakefield Fisheries, 495 P.2d 166 (Alaska 1972), overruled, Principal Mut. Life Ins. Co. v. State, Div. of Ins., 780 P.2d 1023 (Alaska 1989).

Quoted in

Bethel Utils. Corp. v. City of Bethel, 780 P.2d 1018 (Alaska 1989).

Chapter 15. Refunds of Taxes and Licenses.

[Renumbered as AS 43.10.210 .]

Chapter 18. State Aid to Local Governments.

Secs. 43.18.010 — 43.18.045. State aid to local governments. [Repealed, § 11 ch 155 SLA 1980. For current law, see AS 29.60.]

Sec. 43.18.050. Specific expenditures. [Repealed, § 3 ch 265 SLA 1976.]

Secs. 43.18.100 — 43.18.135. [Renumbered as AS 14.11.100 — 14.11.135.]

Sec. 43.18.300. [Renumbered as AS 29.89.110.]

Secs. 43.18.400 — 43.18.460. [Renumbered as AS 05.35.010 — 05.35.070.]

Sec. 43.18.500. [Renumbered as AS 44.33.401 — 44.33.417.]

Chapter 19. Multistate Tax Compact.

Administrative Code. —

For multistate tax compact, see 15 AAC 19.

Sec. 43.19.010. Compact.

The Multistate Tax Compact is hereby enacted into law and entered into with all jurisdictions legally joining in it, in the form substantially as follows:

History. (§ 1 ch 124 SLA 1970)

Article I. Purposes.

The purposes of this compact are to:

  1. Facilitate proper determination of state and local tax liability of multistate taxpayers, including the equitable apportionment of tax bases and settlement of apportionment disputes.
  2. Promote uniformity or compatibility in significant components of tax systems.
  3. Facilitate taxpayer convenience and compliance in the filing of tax returns and in other phases of tax administration.
  4. Avoid duplicative taxation.

Article II. Definitions.

As used in this compact:

  1. “State” means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States.
  2. “Subdivision” means any governmental unit or special district of a state.
  3. “Taxpayer” means any corporation, partnership, firm, association, governmental unit or agency or person acting as a business entity in more than one state.
  4. “Income tax” means a tax imposed on or measured by net income including any tax imposed on or measured by an amount arrived at by deducting expenses from gross income, one or more forms of which expenses are not specifically and directly related to particular transactions.
  5. “Capital stock tax” means a tax measured in any way by the capital of a corporation considered in its entirety.
  6. “Gross receipts tax” means a tax, other than a sales tax, which is imposed on or measured by the gross volume of business, in terms of gross receipts or in other terms, and in the determination of which no deduction is allowed which would constitute the tax an income tax.
  7. “Sales tax” means a tax imposed with respect to the transfer for a consideration of ownership, possession or custody of tangible personal property or the rendering of services measured by the price of the tangible personal property transferred or services rendered and which is required by state or local law to be separately stated from the sales price by the seller, or which is customarily separately stated from the sales price, but does not include a tax imposed exclusively on the sale of a specifically identified commodity or article or class of commodities or articles.
  8. “Use tax” means a nonrecurring tax, other than a sales tax, which (a) is imposed on or with respect to the exercise or enjoyment of any right or power over tangible personal property incident to the ownership, possession or custody of that property or the leasing of that property from another including any consumption, keeping, retention, or other use of tangible personal property and (b) is complementary to a sales tax.
  9. “Tax” means an income tax, capital stock tax, gross receipts tax, sales tax, use tax, and any other tax which has a multistate impact, except that the provisions of Articles III, IV and V of this compact shall apply only to the taxes specifically designated therein and the provisions of Article IX of this compact shall apply only in respect to determinations pursuant to Article IV.

Article III. Elements of Income Tax Laws.

Taxpayers Option, State and Local Taxes.

  1. Any taxpayer subject to an income tax whose income is subject to apportionment and allocation for tax purposes pursuant to the laws of a party state or pursuant to the laws of subdivisions in two or more party states may elect to apportion and allocate the taxpayer’s income in the manner provided by the laws of such state or by the laws of such states and subdivisions without reference to this compact, or may elect to apportion and allocate in accordance with Article IV.  This election for any tax year may be made in all party states or subdivisions thereof or in any one or more of the party states or subdivisions thereof without reference to the election made in the others.  For the purposes of this paragraph, taxes imposed by subdivisions shall be considered separately from state taxes and the apportionment and allocation also may be applied to the entire tax base.  In no instance wherein Article IV is employed for all subdivisions of a state may the sum of all apportionments and allocations to subdivisions within a state be greater than the apportionment and allocation that would be assignable to that state if the apportionment or allocation were being made with respect to a state income tax.
  2. Each party state or any subdivision thereof which imposes an income tax shall provide by law that any taxpayer required to file a return, whose only activities within the taxing jurisdiction consist of sales and do not include owning or renting real estate or tangible personal property, and whose dollar volume of gross sales made during the tax year within the state or subdivision, as the case may be, is not in excess of $100,000 may elect to report and pay any tax due on the basis of a percentage of such volume, and shall adopt rates which shall produce a tax which reasonably approximates the tax otherwise due.  The Multistate Tax Commission, not more than once in five years, may adjust the $100,000 figure in order to reflect such changes as may occur in the real value of the dollar, and such adjusted figure, upon adoption by the commission, shall replace the $100,000 figure specifically provided herein.  Each party state and subdivision thereof may make the same election available to taxpayers additional to those specified in this paragraph.
  3. Nothing in this Article relates to the reporting or payment of any tax other than an income tax.

Taxpayer Option, Short Form.

Coverage.

Article IV. Division of Income.

  1. As used in this Article, unless the context otherwise requires:
    1. “Business income” means income arising from transactions and activity in the regular course of the taxpayer’s trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer’s regular trade or business operations.
    2. “Commercial domicile” means the principal place from which the trade or business of the taxpayer is directed or managed.
    3. “Compensation” means wages, salaries, commissions and any other form of remuneration paid to employees for personal services.
    4. “Financial organization” means any bank, trust company, savings bank, industrial bank, land bank, safe deposit company, private banker, savings and loan association, credit union, cooperative bank, small loan company, sales finance company, investment company, or any type of insurance company.
    5. “Nonbusiness income” means all income other than business income.
    6. “Public utility” means any business entity (1) which owns or operates any plant, equipment, property, franchise, or license for the transmission of communications, transportation of goods or persons, except by pipe line, or the production, transmission, sale, delivery, or furnishing of electricity, water or steam; and (2) whose rates of charges for goods or services have been established or approved by a federal, state or local government or governmental agency.
    7. “Sales” means all gross receipts of the taxpayer not allocated under paragraphs of this Article.
    8. “State” means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision thereof.
    9. “This state” means the state in which the relevant tax return is filed or, in the case of application of this Article to the apportionment and allocation of income for local tax purposes, the subdivision or local taxing district in which the relevant tax return is filed.
  2. Any taxpayer having income from business activity which is taxable both within and outside this state, other than activity as a financial organization or public utility or the rendering of purely personal services by an individual, shall allocate and apportion net income as provided in this Article. If a taxpayer has income from business activity as a public utility but derives the greater percentage of income from activities subject to this Article, the taxpayer may elect to allocate and apportion the taxpayer’s entire net income as provided in this Article.
  3. For purposes of allocation and apportionment of income under this Article, a taxpayer is taxable in another state if (1) in that state the taxpayer is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax, or (2) that state has jurisdiction to subject the taxpayer to a net income tax regardless of whether, in fact, the state does or does not.
  4. Rents and royalties from real or tangible personal property, capital gains, interest, dividends or patent or copyright royalties, to the extent that they constitute nonbusiness income, shall be allocated as provided in paragraphs 5 through 8 of this Article.
    1. Net rents and royalties from real property located in this state are allocable to this state.
    2. Net rents and royalties from tangible personal property are allocable to this state: (1) if and to the extent that the property is utilized in this state, or (2) in their entirety if the taxpayer’s commercial domicile is in this state and the taxpayer is not organized under the laws of or taxable in the state in which the property is utilized.
    3. The extent of utilization of tangible personal property in a state is determined by multiplying the rents and royalties by a fraction, the numerator of which is the number of days of physical location of the property in the state during the rental or royalty period in the taxable year and the denominator of which is the number of days of physical location of the property everywhere during all rental or royalty periods in the taxable year.  If the physical location of the property during the rental or royalty period is unknown or unascertainable by the taxpayer, tangible personal property is utilized in the state in which the property was located at the time the rental or royalty payer obtained possession.
    1. Capital gains and losses from sales of real property located in this state are allocable to this state.
    2. Capital gains and losses from sales of tangible personal property are allocable to this state if (1) the property had a situs in this state at the time of the sale, or (2) the taxpayer’s commercial domicile is in this state and the taxpayer is not taxable in the state in which the property had a situs.
    3. Capital gains and losses from sales of intangible personal property are allocable to this state if the taxpayer’s commercial domicile is in this state.
  5. Interest and dividends are allocable to this state if the taxpayer’s commercial domicile is in this state.
    1. Patent and copyright royalties are allocable to this state: (1) if and to the extent that the patent or copyright is utilized by the payer in this state, or (2) if and to the extent that the patent or copyright is utilized by the payer in a state in which the taxpayer is not taxable and the taxpayer’s commercial domicile is in this state.
    2. A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing, or other processing in the state or to the extent that a patented product is produced in the state.  If the basis of receipts from patent royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the patent is utilized in the state in which the taxpayer’s commercial domicile is located.
    3. A copyright is utilized in a state to the extent that printing or other publication originates in the state.  If the basis of receipts from copyright royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the copyright is utilized in the state in which the taxpayer’s commercial domicile is located.
  6. All business income shall be apportioned to this state by multiplying the income by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor, and the denominator of which is three.
  7. The property factor is a fraction, the numerator of which is the average value of the taxpayer’s real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer’s real and tangible personal property owned or rented and used during the tax period.
  8. Property owned by the taxpayer is valued at its original cost.  Property rented by the taxpayer is valued at eight times the net annual rental rate.  Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals.
  9. The average value of property shall be determined by averaging the values at the beginning and ending of the tax period but the tax administrator may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer’s property.
  10. The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation and the denominator of which is the total compensation paid everywhere during the tax period.
  11. Compensation is paid in this state if:
    1. the individual’s service is performed entirely within the state;
    2. the individual’s service is performed both inside and outside the state, but the service performed outside the state is incidental to the individual’s service within this state; or
    3. some of the service is performed in the state and (1) the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in the state, or (2) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in this state.
  12. The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period.
  13. Sales of tangible personal property are in this state if:
    1. the property is delivered or shipped to a purchaser, other than the United States Government, within this state regardless of the f.o.b. point or other conditions of the sale; or
    2. the property is shipped from an office, store, warehouse, factory, or other place of storage in this state and (1) the purchaser is the United States Government or (2) the taxpayer is not taxable in the state of the purchaser.
  14. Sales, other than sales of tangible personal property, are in this state if:
    1. the income-producing activity is performed in this state; or
    2. the income-producing activity is performed both in and outside this state and a greater proportion of the income-producing activity is performed in this state than in any other state, based on costs of performance.
  15. If the allocation and apportionment provisions of this Article do not fairly represent the extent of the taxpayer’s business activity in this state, the taxpayer may petition for or the tax administrator may require, in respect to all or any part of the taxpayer’s business activity, if reasonable:
    1. separate accounting;
    2. the exclusion of any one or more of the factors;
    3. the inclusion of one or more additional factors which will fairly represent the taxpayer’s business activity in this state; or
    4. the employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer’s income.

Article V. Elements of Sales and Use Tax Laws.

Tax Credit.

  1. Each purchaser liable for a use tax on tangible personal property shall be entitled to full credit for the combined amount or amounts of legally imposed sales or use taxes paid by the purchaser with respect to the same property to another state and any subdivision thereof.  The credit shall be applied first against the amount of any use tax due the state, and any unused portion of the credit shall then be applied against the amount of any use tax due a subdivision.
  2. Whenever a vendor receives and accepts in good faith from a purchaser a resale or other exemption certificate or other written evidence of exemption authorized by the appropriate state or subdivision taxing authority, the vendor shall be relieved of liability for a sales or use tax with respect to the transaction.

Exemption Certificates, Vendors May Rely.

Article VI. The Commission.

Organization and Management.

    1. The Multistate Tax Commission is hereby established. It shall be composed of one “member” from each party state who shall be the head of the state agency charged with the administration of the types of taxes to which this compact applies.  If there is more than one such agency the state shall provide by law for the selection of the commission member from the heads of the relevant agencies.  State law may provide that a member of the commission be represented by an alternate but only if there is on file with the commission written notification of the designation and identity of the alternate.  The attorney general of each party state or the designee of the attorney general, or other counsel if the laws of the party state specifically provide, shall be entitled to attend the meetings of the commission, but shall not vote. Such attorneys general, designees, or other counsel shall receive all notices of meetings required under paragraph 1(e) of this Article.
    2. Each party state shall provide by law for the selection of representatives from its subdivisions affected by this compact to consult with the commission member from that state.
    3. Each member shall be entitled to one vote.  The commission shall not act unless a majority of the members are present, and no action shall be binding unless approved by a majority of the total number of members.
    4. The commission shall adopt an official seal to be used as it may provide.
    5. The commission shall hold an annual meeting and such other regular meetings as its bylaws may provide and such special meetings as its executive committee may determine. The commission bylaws shall specify the dates of the annual and any other regular meetings, and shall provide for the giving of notice of annual, regular and special meetings. Notices of special meetings shall include the reasons therefor and an agenda of the items to be considered.
    6. The commission shall elect annually, from among its members, a chairman, a vice-chairman and a treasurer.  The commission shall appoint an executive director who shall serve at its pleasure, and it shall fix the duties and compensation of the executive director.  The executive director shall be secretary of the commission. The commission shall make provision for the bonding of such of its officers and employees as it may deem appropriate.
    7. Irrespective of the civil service, personnel or other merit system laws of any party state, the executive director shall appoint or discharge such personnel as may be necessary for the performance of the functions of the commission and shall fix their duties and compensation.  The commission bylaws shall provide for personnel policies and programs.
    8. The commission may borrow, accept or contract for the services of personnel from any state, the United States, or any other governmental entity.
    9. The commission may accept for any of its purposes and functions any and all donations and grants of money, equipment, supplies, materials and services, conditional or otherwise, from any governmental entity, and may utilize and dispose of the same.
    10. The commission may establish one or more offices for the transacting of its business.
    11. The commission shall adopt bylaws for the conduct of its business.  The commission shall publish its bylaws in convenient form, and shall file a copy of the bylaws and any amendments thereto with the appropriate agency or officer in each of the party states.
    12. The commission annually shall make to the governor and legislature of each party state a report covering its activities for the preceding year. Any donation or grant accepted by the commission or services borrowed shall be reported in the annual report of the commission, and shall include the nature, amount and conditions, if any, of the donation, gift, grant or services borrowed and the identity of the donor or lender.  The commission may make additional reports as it may deem desirable.
    1. To assist in the conduct of its business when the full commission is not meeting, the commission shall have an executive committee of seven members, including the chairman, vice-chairman, treasurer and four other members elected annually by the commission.  The executive committee, subject to the provisions of this compact and consistent with the policies of the commission, shall function as provided in the bylaws of the commission.
    2. The commission may establish advisory and technical committees, membership on which may include private persons and public officials, in furthering any of its activities. Such committees may consider any matter of concern to the commission, including problems of special interest to any party state and problems dealing with particular types of taxes.
    3. The commission may establish such additional committees as its bylaws may provide.
  1. In addition to powers conferred elsewhere in this compact, the commission shall have power to:
    1. Study state and local tax systems and particular types of state and local taxes.
    2. Develop and recommend proposals for an increase in uniformity or compatibility of state and local tax laws with a view toward encouraging the simplification and improvement of state and local tax law and administration.
    3. Compile and publish information as in its judgment would assist the party states in implementation of the compact and taxpayers in complying with state and local tax laws.
    4. Do all things necessary and incidental to the administration of its functions pursuant to this compact.
    1. The commission shall submit to the governor or designated officer or officers of each party state a budget of its estimated expenditures for such period as may be required by the laws of that state for presentation to the legislature thereof.
    2. Each of the commission’s budgets of estimated expenditures shall contain specific recommendations of the amounts to be appropriated by each of the party states. The total amount of appropriations requested under any such budget shall be apportioned among the party states as follows: one-tenth in equal shares; and the remainder in proportion to the amount of revenue collected by each party state and its subdivisions from income taxes, capital stock taxes, gross receipts, taxes, sales and use taxes.  In determining such amounts, the commission shall employ such available public sources of information as, in its judgment, present the most equitable and accurate comparisons among the party states. Each of the commission’s budgets of estimated expenditures and requests for appropriations shall indicate the sources used in obtaining information employed in applying the formula contained in this paragraph.
    3. The commission shall not pledge the credit of any party state. The commission may meet any of its obligations in whole or in part with funds available to it under paragraph 1(i) of this Article: provided that the commission takes specific action setting aside such funds prior to incurring any obligation to be met in whole or in part in such manner. Except where the commission makes use of funds available to it under paragraph 1(i), the commission shall not incur any obligation prior to the allotment of funds by the party states adequate to meet the same.
    4. The commission shall keep accurate accounts of all receipts and disbursements. The receipts and disbursements of the commission shall be subject to the audit and accounting procedures established under its bylaws. All receipts and disbursements of funds handled by the commission shall be audited yearly by a certified or licensed public accountant and the report of the audit shall be included in and become part of the annual report of the commission.
    5. The accounts of the commission shall be open at any reasonable time for inspection by duly constituted officers of the party states and by any persons authorized by the commission.
    6. Nothing contained in this Article shall be construed to prevent commission compliance with laws relating to audit or inspection of accounts by or on behalf of any government contributing to the support of the commission.

Committees.

Powers.

Finance.

Article VII. Uniform Regulations and Forms.

  1. Whenever any two or more party states, or subdivisions of party states, have uniform or similar provisions of law relating to an income tax, capital stock tax, gross receipts tax, sales or use tax, the commission may adopt uniform regulations for any phase of the administration of such law, including assertion of jurisdiction to tax, or prescribing uniform tax forms. The commission may also act with respect to the provisions of Article IV of this compact.
  2. Prior to the adoption of any regulation, the commission shall:
    1. As provided in its bylaws, hold at least one public hearing on due notice to all affected party states and subdivisions thereof and to all taxpayers and other persons who have made timely request of the commission for advance notice of its regulation-making proceedings.
    2. Afford all affected party states and subdivisions and interested persons an opportunity to submit relevant written data and views, which shall be considered fully by the commission.
  3. The commission shall submit any regulations adopted by it to the appropriate officials of all party states and subdivisions to which they might apply. Each such state and subdivision shall consider any such regulations for adoption in accordance with its own laws and procedures.

Article VIII. Interstate Audits.

  1. This Article shall be in force only in those party states that specifically provide therefor by statute.
  2. Any party state or subdivision thereof desiring to make or participate in an audit of any accounts, books, papers, records or other documents may request the commission to perform the audit on its behalf.  In responding to the request, the commission shall have access to and may examine, at any reasonable time, such accounts, books, papers, records, and other documents and any relevant property or stock of merchandise. The commission may enter into agreements with party states or their subdivisions for assistance in performance of the audit. The commission shall make charges, to be paid by the state or local government or governments for which it performs the service, for any audits performed by it in order to reimburse itself for the actual costs incurred in making the audit.
  3. The commission may require the attendance of any person within the state where it is conducting an audit or part thereof at a time and place fixed by it within such state for the purpose of giving testimony with respect to any account, book, paper, document, other record, property or stock of merchandise being examined in connection with the audit.  If the person is not within the jurisdiction, the person may be required to attend for such purpose at any time and place fixed by the commission within the state of which the person is a resident: provided that such state has adopted this Article.
  4. The commission may apply to any court having power to issue compulsory process for orders in aid of its powers and responsibilities pursuant to this Article and any and all such courts shall have jurisdiction to issue such orders. Failure of any person to obey any such order shall be punishable as contempt of the issuing court. If the party or subject matter on account of which the commission seeks an order is within the jurisdiction of the court to which application is made, such application may be to a court in the state or subdivision on behalf of which the audit is being made or a court in the state in which the object of the order being sought is situated. The provisions of this paragraph apply only to courts in a state that has adopted this Article.
  5. The commission may decline to perform any audit requested if it finds that its available personnel or other resources are insufficient for the purpose or that, in the terms requested, the audit is impracticable of satisfactory performance. If the commission, on the basis of its experience, has reason to believe that an audit of a particular taxpayer, either at a particular time or on a particular schedule, would be of interest to a number of party states or their subdivisions, it may offer to make the audit or audits, the offer to be contingent on sufficient participation therein as determined by the commission.
  6. Information obtained by any audit pursuant to this Article shall be confidential and available only for tax purposes to party states, their subdivisions or the United States. Availability of information shall be in accordance with the laws of the states or subdivisions on whose account the commission performs the audit, and only through the appropriate agencies or officers of such states or subdivisions. Nothing in this Article shall be construed to require any taxpayer to keep records for any period not otherwise required by law.
  7. Other arrangements made or authorized pursuant to laws for cooperative audit by or on behalf of the party states or any of their subdivisions are not superseded or invalidated by this Article.
  8. In no event shall the commission make any charge against a taxpayer for an audit.
  9. As used in this Article, “tax,” in addition to the meaning ascribed to it in Article II, means any tax or license fee imposed in whole or in part for revenue purposes.

Article IX. Arbitration.

  1. Whenever the commission finds a need for settling disputes concerning apportionments and allocations by arbitration, it may adopt a regulation placing this Article in effect, notwithstanding the provisions of Article VII.
  2. The commission shall select and maintain an arbitration panel composed of officers and employees of state and local governments and private persons who shall be knowledgeable and experienced in matters of tax law and administration.
  3. Whenever a taxpayer who has elected to employ Article IV, or whenever the laws of the party state or subdivision thereof are substantially identical with the relevant provisions of Article IV, the taxpayer, by written notice to the commission and to each party state or subdivision thereof that would be affected, may secure arbitration of an apportionment or allocation, if the taxpayer is dissatisfied with the final administrative determination of the tax agency of the state or subdivision with respect thereto on the ground that it would subject the taxpayer to double or multiple taxation by two or more party states or subdivisions thereof. Each party state and subdivision thereof hereby consents to the arbitration as provided herein, and agrees to be bound thereby.
  4. The arbitration board shall be composed of one person selected by the taxpayer, one by the agency or agencies involved, and one member of the commission’s arbitration panel. If the agencies involved are unable to agree on the person to be selected by them, such person shall be selected by lot from the total membership of the arbitration panel. The two persons selected for the board in the manner provided by the foregoing provisions of this paragraph shall jointly select the third member of the board. If they are unable to agree on the selection, the third member shall be selected by lot from among the total membership of the arbitration panel. No member of a board selected by lot shall be qualified to serve if the member is an officer or employee or is otherwise affiliated with any party to the arbitration proceeding. Residence within the jurisdiction of a party to the arbitration proceeding shall not constitute affiliation within the meaning of this paragraph.
  5. The board may sit in any state or subdivision party to the proceeding, in the state of the taxpayer’s incorporation, residence or domicile, in any state where the taxpayer does business, or in any place that it finds most appropriate for gaining access to evidence relevant to the matter before it.
  6. The board shall give due notice of the times and places of its hearings. The parties shall be entitled to be heard, to present evidence, and to examine and cross-examine witnesses. The board shall act by majority vote.
  7. The board shall have power to administer oaths, take testimony, subpoena and require the attendance of witnesses and the production of accounts, books, papers, records, and other documents, and issue commissions to take testimony. Subpoenas may be signed by any member of the board. In case of failure to obey a subpoena, and upon application by the board, any judge of a court of competent jurisdiction of the state in which the board is sitting or in which the person to whom the subpoena is directed may be found may make an order requiring compliance with the subpoena, and the court may punish failure to obey the order as a contempt. The provisions of this paragraph apply only in states that have adopted this Article.
  8. Unless the parties otherwise agree the expenses and other costs of the arbitration shall be assessed and allocated among the parties by the board in such manner as it may determine. The commission shall fix a schedule of compensation for members of arbitration boards and of other allowable expenses and costs. No officer or employee of a state or local government who serves as a member of a board shall be entitled to compensation therefor unless the member is required on account of the service as a board member to forego the regular compensation attaching to the public employment, but any such board member shall be entitled to expenses.
  9. The board shall determine the disputed apportionment or allocation and any matters necessary thereto. The determinations of the board shall be final for purposes of making the apportionment or allocation, but for no other purpose.
  10. The board shall file with the commission and with each tax agency represented in the proceeding:  the determination of the board; the board’s written statement of its reasons therefor; the record of the board’s proceedings; and any other documents required by the arbitration rules of the commission to be filed.
  11. The commission shall publish the determinations of boards together with the statements of the reasons therefor.
  12. The commission shall adopt and publish rules of procedure and practice and shall file a copy of such rules and of any amendment thereto with the appropriate agency or officer in each of the party states.
  13. Nothing contained herein shall prevent at any time a written compromise of any matter or matters in dispute, if otherwise lawful, by the parties to the arbitration proceedings.

Article X. Entry Into Force and Withdrawal.

  1. This compact shall enter into force when enacted into law by any seven states. Thereafter, this compact shall become effective as to any other state upon its enactment thereof. The commission shall arrange for notification of all party states whenever there is a new enactment of the compact.
  2. Any party state may withdraw from this compact by enacting a statute repealing the same. No withdrawal shall affect any liability already incurred by or chargeable to a party state prior to the time of such withdrawal.
  3. No proceeding commenced before an arbitration board prior to the withdrawal of a state and to which the withdrawing state or any subdivision thereof is a party shall be discontinued or terminated by the withdrawal, nor shall the board thereby lose jurisdiction over any of the parties to the proceeding necessary to make a binding determination therein.

Article XI. Effect on Other Laws and Jurisdiction.

Nothing in this compact shall be construed to:

  1. Affect the power of any state or subdivision thereof to fix rates of taxation, except that a party state shall be obligated to implement Article III 2 of this compact.
  2. Apply to any tax or fixed fee imposed for the registration of a motor vehicle or any tax on motor fuel, other than a sales tax:  provided that the definition of “tax” in Article VIII 9 may apply for the purposes of that Article and the commission’s powers of study and recommendation pursuant to Article VI 3 may apply.
  3. Withdraw or limit the jurisdiction of any state or local court or administrative officer or body with respect to any person, corporation or other entity or subject matter, except to the extent that such jurisdiction is expressly conferred by or pursuant to this compact upon another agency or body.
  4. Supersede or limit the jurisdiction of any court of the United States.

Article XII. Construction and Severability.

This compact shall be liberally construed so as to effectuate the purposes thereof. The provisions of this compact shall be severable and if any phrase, clause, sentence, or provision of this compact is declared to be contrary to the constitution of any state or of the United States or the applicability thereof to any government, agency, person or circumstance is held invalid, the validity of the remainder of this compact and the applicability thereof to any government, agency, person or circumstance shall not be affected thereby. If this compact shall be held contrary to the constitution of any state participating therein, the compact shall remain in full force and effect as to the remaining party states and in full force and effect as to the state affected as to all severable matters.

Administrative Code. —

For division of income, see 15 AAC 19, art. 1.

For taxable in another state, see 15 AAC 19, art. 2.

For apportionment formula, see 15 AAC 19, art. 3.

For property factor, see 15 AAC 19, art. 4.

For payroll factor, see 15 AAC 19, art. 5.

For sales factor, see 15 AAC 19, art. 6.

For special rules: airlines, see 15 AAC 19, art. 8.

For special rules: land transportation carriers, see 15 AAC 19, art. 9.

For special rules: construction contractors, see 15 AAC 19, art. 10.

For special rules: water transportation carriers, see 15 AAC 19, art. 11.

For corporate net income tax; combination and apportionment rules, see 15 AAC 20, art. 3.

For corporate net income tax; special rules for oil and gas corporations, see 15 AAC 20, art. 4.

For corporate net income tax; special rules for financial organizations and, see 15 AAC 20, art. 6.

For application of tax, see 15 AAC 21, art. 1.

For taxable income from oil and gas production, see 15 AAC 21, art. 2.

For taxable income from oil and gas pipelines, see 15 AAC 21, art. 3.

For taxable income apportioned to Alaska, see 15 AAC 21, art. 4.

For transition rules, see 15 AAC 21, art. 5.

For administration, see 15 AAC 21, art. 6.

Notes to Decisions

Constitutional to value nonproductive leaseholds at cost. —

Valuation of an oil company’s nonproductive Alaska leaseholds at cost instead of at zero in determining what proportion of the company’s worldwide property was in Alaska was neither unfair nor unconstitutional. Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988).

Restatement of former law. —

The Multistate Tax Compact is basically a restatement of the former Uniform Division of Income for Tax Purposes Act, with a few minor changes. Department of Revenue, Child Support Enforcement Div. v. Beans, 965 P.2d 725 (Alaska 1998).

Formula apportionment. —

Formula apportionment does not require uniform tax rates among all taxing jurisdictions. Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988).

Inclusion in apportionment formula. —

The Department of Revenue properly included nonproducing oil and gas leaseholds in the apportionment formula of former AS 43.20.130, which was virtually identical to that in Article IV of this compact; the inclusion did not violate the taxpayer’s due process rights. Department of Revenue, Child Support Enforcement Div. v. Beans, 965 P.2d 725 (Alaska 1998).

Inclusion of the amounts of income tax payments made by an oil company to the countries of Kuwait, Iran, Nigeria, Ecuador, Venezuela and Angola in the company’s worldwide pre-tax income did not result in an unfair representation of the company’s Alaska activity. Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988).

The Department of Revenue properly determined that the revenues from company’s delivery of eight-story high modules for Prudhoe Bay were derived not from services alone but from transactions involving the sale of tangible personal property delivered inside the State of Alaska, and therefore properly included the revenues in the Alaska numerator of the sale factor in the formula set out in article IV, paragraph 9 of this section. Department of Revenue v. Parsons Corp., 843 P.2d 1238 (Alaska 1992), cert. denied, 508 U.S. 940, 113 S. Ct. 2416, 124 L. Ed. 2d 638 (U.S. 1993).

Application of apportionment formula to unitary businesses. —

Finding of unity is prerequisite to constitutional application of Alaska’s apportionment formula. Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960 (Alaska 1983).

Evidence of parent corporation’s extensive involvement in management and in financing of subsidiary’s business operations, and of benefit to subsidiary from various economics of scale warranted finding of a unitary business to which apportionment formula of AS 43.20.065 must be applied. Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960 (Alaska 1983).

One who attacks an apportionment formula’s application to a unitary business may do so only with a showing of clear and cogent evidence, and trial court erred in applying standard which addressed whether the record as a whole contained substantial evidence from which department could have concluded that the supporting department’s conclusion that a business is unitary in nature; however, such error was harmless where correct result had been reached by trial court. Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960 (Alaska 1983).

Question whether a taxpayer’s business is unitary is a question of law which does not require agency expertise for its resolution, and the substitution of judgment standard of review should be applied by courts reviewing the Department of Revenue’s application of the unitary business concept to a taxpayer’s business activity. Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960 (Alaska 1983).

Delaware corporation engaged in mining gold in Alaska was part of a unitary business involving two other corporations, where the companies were functionally integrated, had centralized management, and shared economies of scale. Alaska Gold Co. v. State, Dep't of Revenue, 754 P.2d 247 (Alaska 1988).

Taxpayer that both produces and transports oil or gas but does neither of those activities in this state is taxed under the formula prescribed in the statute that includes the property, sales, and payroll factors. Tesoro Corp. v. State, Dep't of Revenue, 312 P.3d 830 (Alaska 2013), cert. denied, 572 U.S. 1149, 134 S. Ct. 2697, 189 L. Ed. 2d 740 (U.S. 2014).

Foreign shipping income. —

Foreign shipping income of a corporation was not exempted by 26 U.S.C. 883(a)(1) from taxation because the provision is impliedly excepted to by the tax scheme employed by the Alaska Net Income Tax Act. Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Out-of-state investment income. —

A corporation’s out-of-state investment income may be apportioned for state taxation only if either (1) the investment itself constitutes part of the corporations’s unitary business (where unitariness is indicated by functional integration, centralization of management, and economies of scale), or (2) the investment is short term and the income is used to fund the unitary business, such that the investment is analogous to a bank account for the unitary business. Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Quoted in

Bragg v. Matanuska-Susitna Borough, 192 P.3d 982 (Alaska 2008).

Cited in

Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Collateral references. —

Construction and application of Uniform Division of Income for Tax Purposes Act (UDITPA) — determination of business income. 74 ALR6th 1.

Sec. 43.19.020. Commissioner of revenue to represent department.

  1. The commissioner shall represent this state on the Multistate Tax Commission.
  2. The member representing this state on the multistate commission may be represented by an alternate designated by the commissioner.

History. (§ 1 ch 124 SLA 1970)

Sec. 43.19.030. Consulting committee.

The governor shall appoint a consulting committee consisting of three persons who are representative of subdivisions affected or likely to be affected by the Multistate Tax Compact, none of whom may be members of the legislature. The member of the commission representing this state, and any alternate designated by the member shall consult regularly with this committee, in accordance with Article VI, 1(b) of the compact.

History. (§ 1 ch 124 SLA 1970)

Sec. 43.19.040. Advisory committee.

There is established the Multistate Tax Compact Advisory Committee composed of the member of the Multistate Tax Commission representing this state, any alternate designated by the member, the attorney general or the designee of the attorney general, the members of the consulting committee, two members of the senate to be appointed by the president, and two members of the house of representatives to be appointed by the speaker. The chairman shall be the member of the commission representing this state. The committee shall meet on the call of its chairman or at the request of a majority of its members, but in any event it shall meet not less than three times in each year. The committee may consider all matters relating to recommendations of the Multistate Tax Commission and the activities of the members in representing this state on the commission.

History. (§ 1 ch 124 SLA 1970)

Sec. 43.19.050. Interstate audits.

Article VIII of the compact relating to interstate audits shall be in force in and with respect to this state.

History. (§ 1 ch 124 SLA 1970)

Chapter 20. Alaska Net Income Tax Act.

Administrative Code. —

For Alaska net income tax, see 15 AAC 20.

Article 1. Persons Subject to Tax; Returns and Payment; Credits.

Opinions of attorney general. —

Liability of nonresident fur company under this act. See 1959 Alas. Op. Att'y Gen. No. 22.

Taxability of oil lease bonus. See 1961 Alas. Op. Att'y Gen. No. 27.

Medical deductions for part-year residents under Alaska Net Income Tax Act. See 1961 Alas. Op. Att'y Gen. No. 28.

The Annette Islands Reserve must be treated as a true reservation at least for purposes of state taxation; thus, individual Metlakatlans who earn income on the reservation are exempt from state income tax except that those Metlakatlans who earn income both within and without the reservation are taxable on that portion of their income earned off the reservation. 1978 Alas. Op. Att'y Gen. No. 16.

Income of a nonresident from intangible personal property (e.g. dividends from stocks and bonds) was not subject to income tax unless the intangible property that was the source of the income had a business situs in Alaska. 1980 Alas. Op. Att'y Gen. No. 33.

Notes to Decisions

Constitutionality of chapter. —

The Alaska Net Income Tax Act is constitutional as applied to nonresident crab fishermen who fish off the coast of Alaska in international waters and sell their catch to Alaska processors, and such taxation does not violate the due process and commerce clauses of the United States Constitution, or of the Interstate Income Act, 15 U.S.C. § 381. Sjong v. State, Dep't of Revenue, 622 P.2d 967 (Alaska 1981), overruled in part, Rosen v. State Bd. of Pub. Accountancy, 689 P.2d 478 (Alaska 1984).

This chapter is not unconstitutional as wanting in uniformity. Alaska S.S. Co. v. Mullaney, 84 F. Supp. 561, 12 Alaska 433 (D. Alaska 1949), aff'd, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

Alaska can constitutionally levy tax on net income of seamen engaged in interstate and foreign commerce, where the tax is levied only on that portion of the seamen’s net income which is attributed to their activity within the boundaries of the State of Alaska. State v. Petronia, 69 Wn.2d 460, 418 P.2d 755 (Wash. 1966).

Interstate commerce not singled out by chapter. —

There is nothing in this chapter which singles out for special treatment interstate commerce or those who are engaged in interstate commerce because and on account of such commerce. Alaska S.S. Co. v. Mullaney, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

Graduated income taxes are based on policy grounds. —

Graduated income taxes, involving as they do the concept of ability to pay, are based upon intelligible grounds of policy. Alaska S.S. Co. v. Mullaney, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

And they do not necessarily involve arbitrary classification. Alaska S.S. Co. v. Mullaney, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

There is no conflict between this chapter and federal law, 46 USC 601 [now 46 USC 11108, 11109] prohibiting attachment or arrestment of wages accruing to seaman. Alaska S.S. Co. v. Mullaney, 84 F. Supp. 561, 12 Alaska 433 (D. Alaska 1949), aff'd, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

Review of history of Alaska Income Tax Act. —

See Department of Revenue v. Gibson, 544 P.2d 851 (Alaska 1975).

Collateral references. —

71 Am. Jur. 2d State and Local Taxation §§ 358-518.

85 C.J.S. Taxation §§ 1836-1853.

Employee’s acquisition of employer’s commodities at discount or without cost as within sales or gross income tax statute. 1 ALR2d 1020.

Constitutional exemption from taxation as subject to legislative regulation respecting conditions of its assertion. 4 ALR2d 744.

Taxpayer’s reliance on doctrine of constructive receipt to defeat assertion of tax in later year. 7 ALR2d 735.

Premiums paid by employer for insurance or annuity payable to employee as taxable income of latter. 7 ALR2d 766.

Income and excess profits tax of cooperative association and its patrons or members. 8 ALR2d 925.

Tips as taxable income. 10 ALR2d 191.

Income of subsidiary as taxable to it or to parent corporation. 10 ALR2d 576.

Constitutionality, construction and application of statutory provisions allowing credit for income tax paid to other state or country. 12 ALR2d 359.

Liability for additions to deficiencies for fraud, imposed by income tax laws, as surviving taxpayer’s death. 15 ALR2d 1036.

Year in which guarantor may take loss or bad debt deduction. 23 ALR2d 431.

Deduction of cost of acquiring, protecting, or disposing of title to income-producing property as nontrade or nonbusiness expense. 23 ALR2d 902.

Stockholder’s loan to corporation as basis for business bad debt deduction. 25 ALR2d 633.

Rules concerning “application of payments” as affecting computation of income or excess profits tax. 28 ALR2d 603.

Power to remit, release, or compromise tax claim. 28 ALR2d 1425.

What constitutes transaction entered into for profit for purposes of income tax deduction. 39 ALR2d 878.

Right of lessor or his successors to deduction for depreciation, obsolescence, or exhaustion. 40 ALR2d 440.

Constitutionality, construction, and application of provisions of state tax law for conformity with federal income tax law or administrative and judicial interpretation. 42 ALR2d 797.

Gift, other than one to pension fund, for employees or former employees of a particular business or company, or their families, valid charitable gift or trust. 51 ALR2d 1290.

Financial hardship or inability to pay taxes as rendering inapplicable statutes denying remedy by injunction against assessment or collection of tax. 65 ALR2d 550.

Validity, under Federal Constitution, of state tax on, or measured by, income of foreign corporation. 67 ALR2d 1322.

Payment of premiums paid by corporation on policy on life of stockholder as constituting taxable income to the insured. 73 ALR2d 708.

Construction and operation of statutory time limit for filing claim for state tax refund. 14 ALR6th 119.

Employer’s payment to widow of employee as taxable income of widow. 95 ALR2d 520.

State tax on trust income as affected by foreign elements. 5 ALR3d 606.

What constitutes manufacturing and who is a manufacturer under tax laws. 17 ALR3d 7.

Constitutional provision against imprisonment for debt as applicable to nonpayment of tax. 48 ALR3d 1324.

Consideration of tax liability or consequences in determining alimony or property settlement provisions. 51 ALR3d 461; 9 ALR5th 568.

Validity and construction of state statute making successor corporation liable for taxes of predecessor. 65 ALR3d 1181.

Right of surviving spouse to tax refund resulting from joint income tax return. 67 ALR3d 1038.

Validity of statutory classifications based on population — tax statutes. 98 ALR3d 1083.

Validity, construction, and effect of state laws requiring public officials to protect confidentiality of income tax returns or information. 1 ALR4th 959.

Propriety of taking income tax into consideration in fixing damages in personal injury or death action. 16 ALR4th 589.

Construction and application of Uniform Division of Income for Tax Purposes Act (UDITPA) — Determination of business income. 74 ALR6th 1.

Construction and application of Uniform Division of Income for Tax Purposes Act (UDITPA) — apportionment of business income. 80 ALR6th 325.

Construction and application of Uniform Division of Income for Tax Purposes Act (UDITPA) — availability of relief from standard apportionment formula and other issues. 81 ALR6th 97.

Sec. 43.20.010. Tax on individuals, fiduciaries, and corporations. [Repealed, § 13 ch 70 SLA 1975.]

Sec. 43.20.011. Tax on corporations.

  1. [Repealed, § 10 ch 1 SSSLA 1980.]
  2. [Repealed, § 10 ch 1 SSSLA 1980.]
  3. [Repealed, § 10 ch 1 SSSLA 1980.]
  4. [Repealed, § 10 ch 1 SSSLA 1980.]
  5. There is imposed for each taxable year upon the entire taxable income of every corporation derived from sources within the state a tax computed as follows:
  6. [Repealed, § 10 ch 1 SSSLA 1980.]

If the taxable income is: Then the tax is: Less than $25,000 zero $25,000 but less than $49,000 2 percent of the taxable income over $25,000 $49,000 but less than $74,000 $480 plus 3 percent of the taxable income over $49,000 $74,000 but less than $99,000 $1,230 plus 4 percent of the taxable income over $74,000 $99,000 but less than $124,000 $2,230 plus 5 percent of the taxable income over $99,000 $124,000 but less than $148,000 $3,480 plus 6 percent of the taxable income over $124,000 $148,000 but less than $173,000 $4,920 plus 7 percent of the taxable income over $148,000 $173,000 but less than $198,000 $6,670 plus 8 percent of the taxable income over $173,000 $198,000 but less than $222,000 $8,670 plus 9 percent of the taxable income over $198,000 $222,000 or more $10,830 plus 9.4 percent of the taxable income over $222,000.

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History. (§ 1 ch 70 SLA 1975; am § 2 ch 110 SLA 1978; am § 10 ch 1 SSSLA 1980; am § 9 ch 2 SSSLA 1980; am §§ 8-11 ch 113 SLA 1980; am §§ 2-4 ch 116 SLA 1981; am § 1 ch 21 SLA 2013)

Revisor’s notes. —

Section 9, ch. 2, SSSLA 1980 also repealed (a)-(d) and (f) of this section, which had been repealed by ch. 1, SSSLA 1980. Section 10 of ch. 2, SSSLA 1980 had the effect of amending § 12, ch. 1, SSSLA 1980 by making the repeals retroactive to January 1, 1979.

Cross references. —

For findings and purpose in connection with the repeal of the income tax on individuals and fiduciaries, see § 1, ch. 1, SSSLA 1980, and § 1, ch. 2, SSSLA 1980, in the Temporary and Special Acts.

Administrative Code. —

For farm and agricultural land, see 3 AAC 138.

For corporate net income tax; administration and credits, see 15 AAC 20, art. 2.

For application of tax, see 15 AAC 21, art. 1.

Editor’s notes. —

Under sec. 3, ch. 21, SLA 2013, the 2013 changes to (e) of this section apply to the taxable income of a corporation derived from sources within the state during a taxable year that begins on or after August 26, 2013.

Notes to Decisions

Out-of-state investment income. —

A corporation’s out-of-state investment income may be apportioned for state taxation only if either (1) the investment itself constitutes part of the corporations’s unitary business (where unitariness is indicated by functional integration, centralization of management, and economies of scale), or (2) the investment is short term and the income is used to fund the unitary business, such that the investment is analogous to a bank account for the unitary business. Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Cited in

Nat'l Bank v. State, Dep't of Revenue, 769 P.2d 990 (Alaska 1989).

Collateral references. —

Protection of out-of-state sellers from state income tax by Public Law 86-272 (15 U.S.C.A. §§ 381 to 384). 182 ALR Fed. 291.

Sec. 43.20.012. Limitation on application of chapter; credits.

  1. The tax imposed by this chapter does not
    1. apply to an individual;
    2. apply to a fiduciary;
    3. for a tax year beginning after December 31, 2012, apply to an Alaska corporation that is a qualified small business and that meets the active business requirement in 26 U.S.C. 1202(e) as that subsection read on January 1, 2012; or
    4. for a tax year beginning after June 30, 2007, apply to the income received by a regional association qualified under AS 16.10.380 or nonprofit corporation holding a hatchery permit under AS 16.10.400 from the sale of salmon or salmon eggs under AS 16.10.450 or from a cost recovery fishery under AS 16.10.455 .
  2. An individual may file a return under this chapter in order to receive a tax credit under AS 43.20.013 .
  3. For the purposes of (a)(3) of this section,
    1. whether a corporation qualifies under (a)(3) of this section shall be determined on the first day of the tax year for which the corporation claims it qualifies under (a)(3) of this section;
    2. all corporations that are members of the same parent-subsidiary controlled group shall be treated as one corporation.
  4. In this section,
    1. “Alaska corporation” means a corporation that has been incorporated in the state or is authorized to do business in the state;
    2. “parent-subsidiary controlled group” has the meaning given in 26 U.S.C. 1202 as that section read on January 1, 2012;
    3. “qualified small business” has the meaning given in 26 U.S.C. 1202 as that section read on January 1, 2012, and does not include a construction, transportation, utility, or fisheries business.

History. (§ 2 ch 1 SSSLA 1980; am § 2 ch 2 SSSLA 1980; am §§ 6, 7 ch 51 SLA 2012; am § 1 ch 55 SLA 2013)

Delayed repeal of subsections (c) and (d). —

Under sec. 5, ch. 55, SLA 2013, (c) and (d) of this section are repealed July 1, 2023.

Delayed amendment of subsection (a). —

Under Sec. 2 and 10, ch. 55, SLA 2013, (a) of this section will be repealed and reenacted on July 1, 2023 to read: “(a) The tax imposed by this chapter does not apply to

“(1) an individual;

“(2) a fiduciary; or

“(3) the income received by a regional association qualified under AS 16.10.380 or nonprofit corporation holding a hatchery permit under AS 16.10.400 from the sale of salmon or salmon eggs under AS 16.10.450 or from a cost recovery fishery under AS 16.10.455 .”

Cross references. —

For transitional provision relating to credit or refund of tax paid on income that is exempt under (a)(4) of this section, as enacted in sec. 1, ch. 55, SLA 2013, see sec. 7, ch. 55, SLA 2013 in the 2013 Temporary and Special Acts.

Sec. 43.20.013. Individual tax credits.

  1. A resident individual is entitled to a tax credit not to exceed $100 for
    1. a contribution made in a calendar year to a person or organization for use exclusively
      1. for a political campaign for a candidate for
        1. President or Vice President of the United States, whether or not the candidate will be voted on in a primary election in Alaska;
        2. United States senator from Alaska;
        3. United States representative from Alaska;
        4. governor or lieutenant governor of Alaska;
        5. the Alaska legislature;
        6. delegate to an Alaska constitutional convention;
        7. electoral confirmation as a judge or justice of a court in Alaska; or
        8. municipal office in Alaska; or
      2. by a group seeking to influence the outcome of a ballot proposition or question in Alaska; and
    2. dues paid in a calendar year to a nonprofit organization organized primarily for the purpose of influencing elections in Alaska.
  2. A resident individual is entitled to a tax credit equal to 16 percent of the tax credit claimed by the individual on the federal income tax return of the individual for household and dependent care services necessary for gainful employment.
  3. The commissioner shall pay the amount of a tax credit allowed by this section to a resident individual who makes a return as provided in AS 43.20.012 . A credit under this section shall be paid in the manner provided in AS 43.20.030(e) for the payment of refunds and payment may not be made without an appropriation for that purpose.

History. (§ 2 ch 1 SSSLA 1980; am § 9 ch 1 SSSLA 1980; am § 2 ch 2 SSSLA 1980)

Editor’s notes. —

The operation of AS 43.20.013 was suspended from August 28, 1987 until January 1, 1995 by § 1, ch. 27, SLA 1987, as amended by § 78, ch. 63, SLA 1993. Under § 85, ch. 63, SLA 1993, the 1993 amendment is retroactive to January 1, 1993.

Section 87, ch. 63, SLA 1993 provides “[i]f any section of this bill is found to violate the single subject rule it is severed from the rest of the bill.”

Sec. 43.20.014. Income tax education credit.

  1. A taxpayer is allowed a credit against the tax due under this chapter for  contributions  of cash or equipment accepted for
    1. direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a  national or regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state;
    2. secondary school level vocational education courses, programs, and facilities by a school district in the state;
    3. vocational education courses, programs, equipment, and facilities by a state-operated vocational technical education and training school, a nonprofit regional training center recognized by the Department of Labor and Workforce Development, and an apprenticeship program in the state that is registered with the United States Department of Labor under  29 U.S.C. 50 — 50b (National Apprenticeship Act);
    4. a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a  national or regional accreditation association or by a public or private nonprofit elementary or secondary school in the state;
    5. Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state;
    6. education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government;
    7. the Alaska higher education investment fund under  AS 37.14.750 ;
    8. funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of
      1. tuition and textbooks;
      2. registration, course, and programmatic student fees;
      3. on-campus room and board at the postsecondary institution in the state that provides the dual-credit course;
      4. transportation costs to and from a residential school approved by the Department of Education and Early Development under  AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and
      5. other related educational and programmatic costs;
    9. constructing, operating, or maintaining a residential housing facility by a residential school in the state approved by the Department of Education and Early Development under  AS 14.16.200 ;
    10. childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under  AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant;
    11. science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and
    12. the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state.
  2. The amount of the credit is  50 percent of contributions.
  3. Each public college and university shall include in its annual operating budget request contributions received and how the contributions were used.
  4. A contribution claimed as a credit under this section may not
    1. be the basis for a credit claimed under another provision of this title;
    2. also be allowed as a deduction under  26 U.S.C. 170 against the tax imposed by this chapter; and
    3. when combined with contributions that are the basis for credits taken during the taxpayer’s tax year under  AS 21.96.070 ,  AS 43.55.019 ,  AS 43.56.018 ,  AS 43.65.018 ,  AS 43.75.018 , or  AS 43.77.045 , result in the total amount of credits exceeding  $1,000,000; if the taxpayer is a member of an affiliated group, then the total amount of credits may not exceed  $1,000,000 for the affiliated group; in this paragraph, “affiliated group” has the meaning given in  AS 43.20.145 .
  5. The credit under this section may not reduce a person’s tax liability under this chapter to below zero for any tax year. An unused credit or portion of a credit not used under this section for a tax year may not be sold, traded, transferred, or applied in a subsequent tax year.
  6. To qualify for a credit under this section, equipment must be appraised consistent with regulations adopted by the department to determine the value of the contribution for purposes of this section.
  7. In this section,
    1. “dual-credit student” means a secondary level student in the state who simultaneously earns college and high school credit for a course;
    2. “nonprofit organization” means a charitable or educational organization in the state that is exempt from taxation under  26 U.S.C. 501(c)(3) (Internal Revenue Code);
    3. “school district” means a borough school district, a city school district, a regional educational attendance area, or a state boarding school;
    4. “vocational education” means organized educational activities that offer a sequence of courses that provides individuals with the academic and technical knowledge and skills the individuals need to prepare for further education and for careers other than careers requiring a baccalaureate, master’s, or doctoral degree.

History. (§ 2 ch 58 SLA 1987; am § 45 ch 21 SLA 1991; am §§ 2, 3, 12 ch 71 SLA 1991; am § 4 ch 21 SLA 1994; am § 17 ch 126 SLA 1994; am § 16 ch 81 SLA 1996; am § 3 ch 86 SLA 2000; am § 7 ch 46 SLA 2002; am § 2 ch 48 SLA 2008; am §§ 13, 15, 17, 19 ch 92 SLA 2010; am § 6 ch 7 FSSLA 2011; am § 7 ch 6 SLA 2012; am § 14 ch 74 SLA 2012; am §§ 36 — 38 ch 15 SLA 2014; am § 1 ch 62 SLA 2018; am §§ 6 — 10 ch 101 SLA 2018)

Delayed repeal of section in 2025. —

Under secs. 21 and 37, ch. 61, SLA 2014, as amended by § 40, ch. 101, SLA 2018, this section is repealed January 1, 2025.

Revisor’s notes. —

In 1991, to harmonize the amendments made by chs. 21 and 71, SLA 1991, the words “by an Alaska” were inserted before “university foundation” in (a) of this section.

In 2010, in (d)(3) of this section “AS 21.96.070 , 21.96.075 ” was substituted for “AS 21.89.070, 21.89.075 ” to reflect the 2010 renumbering of AS 21.89.070 and 21.89.075 .

In 2012, in subsection (d), “ AS 43.20.145 ” was substituted for “ AS 43.20.073 ” to reflect the 2012 renumbering of AS 43.20.073 .

In 2010 and 2018, this section was reorganized to conform to the style of the Alaska Statutes; subsection (e) was enacted as (f) in 2010 and subsection (f) was enacted as (g) in 2018. In 2014, the paragraphs in subsection (g) were reorganized to maintain alphabetical order; paragraphs (g)(1) and (2) were originally enacted as (3) and (4).

In 2018, “AS 21.96.075 ,” was deleted from paragraph (d)(3) to harmonize the repeal of AS 21.96.075 by sec. 1, ch. 62, SLA 2018, effective January 1, 2019, with the changes made by ch. 101, SLA 2018.

Cross references. —

For governor’s transmittal letter for ch. 15, SLA 2014, see 2014 House Journal 1434 — 1437.

Effect of amendments. —

The 2008 amendment, effective January 1, 2009, rewrote the section.

The 2010 amendment, effective January 1, 2011, in (a)(2), added “, and facilities” following “programs”, and made related changes, in (a)(3), added “for vocational education courses, programs, and facilities pre- ceding “by a state-operated vocational”, and made a related change, added (4); in (b)(2), substituted “$200,000” for “$100,000”, added (a)(3), and made related changes; in (d)(1), substituted “be the basis for a credit claimed” for “be claimed as a credit”, in (d)(3), added “contributions that are the basis for” following “when combined with”, substituted “result in the total amount of credits exceeding $5,000,000; if the tax- payer is a member of an affiliated group, then the total amount of credits may not exceed $5,000,000 for the affiliated group; in this paragraph, “affiliated group” has the meaning given in AS 43.20.073 ” for “exceed $150,000”; added (e).

The 2011 amendment, effective July 23, 2011, inserted “or an annual intercollegiate sports tournament” in (a)(4), added (a)(5) and (a)(6), and made a related change.

The first 2012 amendment, effective March 24, 2012, rewrote (f)(1) [now (g)(1)], which read, “ ‘school district’ has the meaning given in AS 14.03.126 .”

The second 2012 amendment, effective September 14, 2012, added (a)(7), and made stylistic changes.

The 2014 amendment, effective July 1, 2014, in (a), added “, or by a public or private nonprofit elementary or secondary school in the state;” at the end of (a)(1), rewrote (a)(3), which read, “vocational education courses, programs, and facilities by a state-operated vocational technical education and training school”, in (a)(4), deleted “or an annual intercollegiate sports tournament” following “a facility”, and added “or by a public or private nonprofit elementary or secondary school in the state” at the end; added (a) (8) — (12).

The 2018 amendment, effective January 1, 2019, in (a), substituted “contributions of cash or equipment” for “cash contributions” in the introductory language, in (a)(1) and (4), inserted “national or” preceding “regional accreditation”; in (b)(2), substituted “75 percent” for “100 percent” at the beginning; in (d)(3), twice substituted “$1,000,000” for “$5,000,000”; added (g) [now (f)].

The 2018 amendment, effective January 1, 2021, rewrote (b).

Opinions of attorney general. —

Contributions to a private nonprofit corporation that is raising money for a William A. Egan Instructional Program and Memorial at the University of Alaska are not eligible for the education tax credit, but contributions made directly to the University of Alaska for the memorial portion of the planned project would qualify for a credit if they were accepted for “library and museum acquisitions.” February 10, 1989 Op. Att’y Gen.

Sec. 43.20.015. Individual tax credit. [Repealed, § 10 ch 1 SSSLA 1980.]

Sec. 43.20.016. Sharing of corporate income tax revenue with municipalities. [Repealed, § 88 ch 74 SLA 1985.]

Sec. 43.20.017. Individual tax exemptions. [Repealed, § 10 ch 1 SSSLA 1980.]

Sec. 43.20.018. Alaska veterans’ memorial endowment fund contribution credit. [Repealed, § 25 ch 46 SLA 2002.]

Sec. 43.20.020. Exemptions. [Repealed, § 13 ch 70 SLA 1975.]

Sec. 43.20.021. Internal Revenue Code adopted by reference.

  1. Sections 26 U.S.C. 1 — 1399 and 6001 — 7872 (Internal Revenue Code), as amended, are adopted by reference as a part of this chapter. These portions of the Internal Revenue Code have full force and effect under this chapter unless excepted to or modified by other provisions of this chapter.
  2. For purposes of calculating the federal tax payable on personal holding companies provided for in the provisions of 26 U.S.C. 541 (Internal Revenue Code), the rate is 12.6 percent.
  3. For purposes of calculating the alternative tax on capital gains provided for in the provisions of 26 U.S.C. 1201 (Internal Revenue Code), the rate is 4.5 percent for corporations.
  4. Where a credit allowed under the Internal Revenue Code is also allowed in computing Alaska income tax, it is limited to 18 percent for corporations of the amount of credit determined for federal income tax purposes which is attributable to Alaska.  This limitation does not apply to a special industrial incentive tax credit under AS 43.20.042 .
  5. [Repealed, § 10 ch 1 SSSLA 1980.]
  6. For the purpose of calculating the alternative minimum tax on tax preferences provided for in 26 U.S.C. 55 — 59 (Internal Revenue Code), the tax is 18 percent for corporations of the applicable alternative minimum federal tax.
  7. For purposes of calculating the accumulated earnings tax as provided in 26 U.S.C. 531 (Internal Revenue Code), the rate is 4.95 percent of the first $100,000 of accumulated taxable income and 6.93 percent of accumulated taxable income in excess of $100,000.
  8. Nothing in this chapter or in AS 43.19 (Multistate Tax Compact) may be construed as an exception to or modification of 26 U.S.C. 883.
  9. The provision in (h) of this section does not apply to commercial passenger vessels as defined in AS 43.52.295 .
  10. For purposes of calculating interest under the look-back method in 26 U.S.C. 460 (Internal Revenue Code), the rate of interest shall be as provided in that section.

History. (§ 2 ch 70 SLA 1975; am §§ 1, 2 ch 125 SLA 1976; am §§ 3 — 5, 10 ch 1 SSSLA 1980; am §§ 3 — 5, 9 ch 2 SSSLA 1980; am §§ 12, 13 ch 113 SLA 1980; am § 1 ch 48 SLA 1984; am § 2 ch 60 SLA 1984; am §§ 1, 2 ch 68 SLA 1987; am § 1 ch 35 SLA 1998; am § 3, 2006 Primary Election Ballot Measure No. 2; am § 3 ch 55 SLA 2013)

Revisor’s notes. —

In § 3, 2006 Primary Election Ballot Measure No. 2, the material set out in subsections (h) and (i) was enacted as subsections (b) and (c) and relettered in 2006, at which time, in (i), “(h) of this section” was substituted for “(b) of this section” and “AS 43.52.295 ” was substituted for “AS 43.52.095” to reflect the 2006 renumbering of that section.

Section 3, 2006 Primary Election Ballot Measure No. 2, read “AS 43.20.021 is repealed and reenacted as follows: Sec. 43.20.021(a) . Internal Revenue Code adopted by reference. (a) Sections 26 U.S.C. — 1399 and 6001 — 7872 (Internal Revenue Code), as amended, are adopted by reference as a part of this chapter. These portions of the Internal Revenue Code have full force and effect under this chapter unless excepted to or modified by other provisions of this chapter. (b) Nothing in this chapter or in AS 43.19 (Multistate Tax Compact) may be construed as an exception to or modification of 26 U.S.C. 883. (c) The provision in (b) of this section does not apply to commercial passenger vessels as defined in AS 43.52.095.”. If this section were interpreted as a repeal and reenactment of the entire section, it would have had the effect of eliminating the provisions of (b) — (d), (f), and (g) of this section, which involve matters that are outside the scope of the subject of the initiative that constituted the ballot measure. In setting out the changes made by section 3 of the initiative, the changes made are, instead, shown as an amendment of (a) of this section and the addition of subsections (h) and (i). Treatment of the material in this manner is consistent with the single subject of the initiative (commercial passenger vessels) and the descriptive title for the initiative as prepared and submitted by the initiative’s sponsors, as well as the actual introductory language of section 3 of the initiative, which set out the section number as “ Sec. 43.20.021(a) ” rather than “ Sec. 43.20.021 .” The courts, however, are the final arbiters of the meaning of the initiative.

Administrative Code. —

For corporate net income tax; administration and credits, see 15 AAC 20, art. 2.

For corporate net income tax; combination and apportionment rules, see 15 AAC 20, art. 3.

For corporate net income tax; special rules for financial organizations and, see 15 AAC 20, art. 6.

For application of tax, see 15 AAC 21, art. 1.

Editor’s notes. —

Section 11, 2006 Primary Election Ballot Measure No. 2, part of the initiative that made the 2006 amendment of (a) of this section and enacted (h) and (i) of this section, provides that “[I]t is the intention of the people of Alaska that any portion of this legislation that is declared unlawful shall be stricken in a manner that preserves the remaining portion of the remaining legislation to the maximum extent possible.”

Under sec. 8, ch. 55, SLA 2013, the addition of subsection (j) of this section is retroactive to January 1, 2013.

Notes to Decisions

Foreign shipping income. —

Foreign shipping income of a corporation was not exempted by 26 U.S.C. 883(a)(1) from taxation because the provision is impliedly excepted to by the tax scheme employed by the Alaska Net Income Tax Act. Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Authority of Department of Revenue. —

The Department of Revenue did not exceed its authority by adopting a regulation limiting the statutory investment tax credit since the regulation was consistent with and reasonably necessary to implement the provisions of subsection (d) of this section and AS 43.20.036(b) . Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Waiver agreements extend state statute of limitations. —

The provisions of AS 43.05.260 and AS 43.05.275 regarding the statute of limitations and written agreement to extend that statute do not eliminate the first sentence of AS 43.20.200(b) , which incorporates specific IRC sections concerning extension of the limitations period for assessment. The references to the IRC contained in AS 43.20.200 and this section make waiver agreements between the IRS and the taxpayer effective for the purpose of extending the state statute of limitations. Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Restricted federal waivers. —

A restricted waiver is only effective for state adjustments that are reasonably related to the issues covered by the restricted federal waiver; therefore, a restricted federal waiver extends the state statute of limitations only so far as the issues covered in the restricted waiver would affect state tax liability. Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Quoted in

Wien Air Alaska, Inc. v. State, Dep't of Revenue, 647 P.2d 1087 (Alaska 1982); Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988).

Cited in

Dep't of Revenue v. Dyncorp & Subsidiaries, 14 P.3d 981 (Alaska 2000).

Sec. 43.20.030. Returns and payment of taxes.

  1. If a corporation, or a partnership that has a corporation as a partner, is required to make a return under the provisions of the Internal Revenue Code, it shall file with the department, within 30 days after the federal return is required to be filed, a return setting out
    1. the amount of tax due under this chapter, less credits claimed against the tax; and
    2. other information for the purpose of carrying out the provisions of this chapter that the department requires.
  2. The return shall either be on oath or contain a written declaration that it is made under penalty of perjury, and the department shall prescribe forms accordingly.
  3. Notwithstanding (a) of this section, the total amount of tax imposed by this chapter is due and payable to the department at the same time and in the same manner as the tax payable to the United States Internal Revenue Service.
  4. A taxpayer, upon request by the department, shall furnish to the department a true and correct copy of the tax return which the taxpayer has filed with the United States Internal Revenue Service.  Every taxpayer shall notify the department in writing of any alteration in, or modification of, the taxpayer’s federal income tax return and of a recomputation of tax or determination of deficiency, whether with or without assessment.  A full statement of the facts must accompany this notice.  The notice shall be filed within 60 days after the final determination of the modification, recomputation or deficiency, and the taxpayer shall pay the additional tax or penalty under this chapter.  For purposes of this section, a final determination shall mean the time that an amended federal return is filed or a notice of deficiency or an assessment is mailed to the taxpayer by the Internal Revenue Service, except that in no event will there be a final determination for purposes of this section until the taxpayer has exhausted rights of appeal under federal law.
  5. The department may credit or refund overpayments of taxes, taxes erroneously or illegally assessed or collected, penalties collected without authority, and taxes that are found unjustly assessed or excessive in amount, or otherwise wrongfully collected. The department shall set limitations, specify the manner in which claims for credits or refunds are made, and give notice of allowance or disallowance. When a refund is allowed to a taxpayer, it shall be paid out of the general fund by a disbursement issued under a voucher approved by the department.
  6. [Repealed, § 10 ch 1 SSSLA 1980.]
  7. [Repealed, § 10 ch 1 SSSLA 1980.]

History. (§ 7 ch 115 SLA 1949; am § 2 ch 132 SLA 1951; am § 4 ch 5 SLA 1953; am § 2 ch 169 SLA 1972; am § 3 ch 70 SLA 1975; am § 2 ch 22 SLA 1980; am §§ 6, 10 ch 1 SSSLA 1980; am §§ 6, 9 ch 2 SSSLA 1980; am §§ 1, 2 ch 58 SLA 1988; am § 21 ch 175 SLA 2004)

Administrative Code. —

For corporate net income tax; administration and credits, see 15 AAC 20, art. 2.

For corporate net income tax; special rules for financial organizations and, see 15 AAC 20, art. 6.

Notes to Decisions

Delegation of legislative authority valid. —

The legislative authority conferred by this section appears to be within the test laid down in Bowles v. Willingham , 321 U.S. 503, 64 S. Ct. 641, 88 L. Ed. 892 (1944), in which the administrator of the Office of Price Administration was empowered to fix minimum rents which, in his judgment, would be generally fair and equitable in any defense rental area whenever in his judgment that action was necessary or proper in order to effectuate the purposes of the act, and further powered to make adjustments for such relevant factors as he may determine and deem to be of general applicability, and to provide for such adjustments and reasonable exceptions as in his judgment are necessary and proper in order to effectuate the purposes of the act. Alaska S.S. Co. v. Mullaney, 84 F. Supp. 561, 12 Alaska 433 (D. Alaska 1949), aff'd, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

Reasonable cause for late notification. —

The Office of Tax Appeals erred in finding that the corporation had reasonable cause for notifying the Department of Revenue of changes to its federal tax returns more than sixty days after the IRS’s action, because being “too busy” is not reasonable cause for late filing, and the corporation cannot avoid the late filing penalty. Dep't of Revenue v. Dyncorp & Subsidiaries, 14 P.3d 981 (Alaska 2000).

Subsection (d) of this section creates a duty to speak when it requires a notice of modification of a taxpayer’s federal income tax return. Stevenson v. Burgess, 570 P.2d 728 (Alaska 1977).

Estoppel from asserting statute of limitations. —

The failure of certain taxpayers to notify the department of the modification in their federal income tax liability for two years constitutes a breach of the duty to give notice of modification pursuant to this section and amounts to the concealment of a material fact. Where the state, to its detriment, relying on that lack of notice, as it reasonably could, failed to institute the statutory mechanism for collection of additional taxes, the taxpayers are estopped from asserting the protection of the statute of limitations embodied in AS 43.20.200(b) . Stevenson v. Burgess, 570 P.2d 728 (Alaska 1977).

Quoted in

Hickel v. Stevenson, 416 P.2d 236 (Alaska 1966).

Cited in

Hickel v. Halford, 872 P.2d 171 (Alaska 1994); Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Sec. 43.20.031. Deduction of taxes; consolidated returns; accounting methods.

  1. [Repealed, § 10 ch 1 SSSLA 1980.]
  2. [Repealed, § 10 ch 1 SSSLA 1980.]
  3. In computing the tax under this chapter, the taxpayer is not entitled to deduct any taxes based on or measured by net income. The taxpayer may deduct the tax levied and paid under AS 43.55.
  4. [Repealed, § 1 ch 98 SLA 1984.]
  5. An affiliated group of corporations may make or the commissioner may require them to make a consolidated return for the taxable year in place of separate returns. For purposes of calculating the amount of tax payable by the group under a consolidated filing, 26 U.S.C. 1501  — 1552 (Internal Revenue Code), as amended, apply.
  6. [Repealed, § 10 ch 1 SSSLA 1980.]
  7. [Repealed, § 10 ch 1 SSSLA 1980.]
  8. [Repealed, § 10 ch 1 SSSLA 1980.]
  9. A corporation which is a member of a group of unitary corporations which collectively has income from business activity taxable both inside and outside the state, or income from other sources both inside and outside the state, shall determine its income from sources in this state by use of the combined method of accounting.

History. (§ 5 ch 70 SLA 1975; am §§ 3 — 5 ch 125 SLA 1976; am § 8 ch 73 SLA 1977; am § 6 ch 133 SLA 1977; am § 1 ch 8 SLA 1978; am § 235 ch 100 SLA 1980; am §§ 14 — 17 ch 113 SLA 1980; am § 10 ch 1 SSSLA 1980; am § 9 ch 2 SSSLA 1980; am § 1 ch 98 SLA 1984; am § 3 ch 2 TSSLA 2006)

Administrative Code. —

For corporate net income tax; administration and credits, see 15 AAC 20, art. 2.

For corporate net income tax; combination and apportionment rules, see 15 AAC 20, art. 3.

For corporate net income tax; special rules for oil and gas corporations, see 15 AAC 20, art. 4.

For corporate net income tax; special rules for financial organizations and, see 15 AAC 20, art. 6.

Notes to Decisions

Constitutional to value nonproductive leaseholds at cost. —

Valuation of an oil company’s nonproductive Alaska leaseholds at cost instead of at zero in determining what proportion of the company’s worldwide property was in Alaska was neither unfair nor unconstitutional. Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988).

Foreign tax payments included in pre-tax income. —

Inclusion of the amounts of income tax payments made by an oil company to the countries of Kuwait, Iran, Nigeria, Ecuador, Venezuela and Angola in the company’s worldwide pre-tax income did not result in an unfair representation of the company’s Alaska activity. Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988).

Delaware corporation engaged in mining gold in Alaska was part of unitary business involving two other corporations, where the companies were functionally integrated, had centralized management, and shared economies of scale. Alaska Gold Co. v. State, Dep't of Revenue, 754 P.2d 247 (Alaska 1988).

Secs. 43.20.033, 43.20.035 Taxable income of fiduciaries, nonresidents, and part-year residents. [Repealed, § 10 ch 1 SSSLA 1980.]

Sec. 43.20.036. Federal tax deductions and credits.

  1. For purposes of calculating the income tax payable under this chapter, the taxpayer may not apply as a credit against tax liability the foreign tax credit allowed as to federal taxes under 26 U.S.C. 27 (Internal Revenue Code).
  2. For purposes of calculating the income tax payable under this chapter, the taxpayer may apply as a credit against tax liability the investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue Code) upon only the first $20,000,000 of qualified investment, other than qualified investment for a special industrial incentive investment tax credit under AS 43.20.042 , put into use in the state for each taxable year.  This limitation does not apply to the amounts invested in equipment that meets the definition of a certified pollution control facility as defined in 26 U.S.C. 169 (Internal Revenue Code) as in effect on June 19, 1975, except that the date specified in 26 U.S.C. 169(d) (Internal Revenue Code) as a condition of qualifying a certified pollution control facility for a deduction does not apply.
  3. For purposes of calculating the income tax payable under this chapter, the taxpayer may apply as an exemption from tax liability the tax exemption for domestic international sales corporations under 26 U.S.C. 991 (Internal Revenue Code), except those taxpayers who are engaged in the exportation of nonrenewable resources.
  4. [Repealed, § 10 ch 1 SSSLA 1980.]
  5. [Repealed, § 10 ch 1 SSSLA 1980.]
  6. [Repealed, § 10 ch 1 SSSLA 1980.]
  7. [Repealed, § 10 ch 1 SSSLA 1980.]
  8. [Repealed, § 10 ch 1 SSSLA 1980.]
  9. [Repealed, § 10 ch 1 SSSLA 1980.]
  10. For purposes of calculating the tax payable under this chapter, a deduction under 26 U.S.C. 170 may only be taken if payment is made on or before the last day of the taxable year.

History. (§ 1 ch 153 SLA 1975; § 1 ch 171 SLA 1975; am § 10 ch 1 SSSLA 1980; am § 9 ch 2 SSSLA 1980; am § 3 ch 22 SLA 1980; am § 1 ch 117 SLA 1981; am § 3 ch 60 SLA 1984; am § 3 ch 58 SLA 1987; am § 3 ch 68 SLA 1987)

Administrative Code. —

For corporate net income tax; administration and credits, see 15 AAC 20, art. 2.

Notes to Decisions

Subsection (b) does not incorporate the federal binding contract rule. Wien Air Alaska, Inc. v. State, Dep't of Revenue, 647 P.2d 1087 (Alaska 1982), limited, Louisiana-Pacific Corp. v. Dep't of Revenue, 26 P.3d 422 (Alaska 2001).

Authority of Department of Revenue. —

The Department of Revenue did not exceed its authority by adopting a regulation limiting the statutory investment tax credit since the regulation was consistent with and reasonably necessary to implement the provisions of AS 43.20.021(d) and subsection (b) of this section. Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Applied in

Department of Revenue v. Alaska Pulp Am., 674 P.2d 268 (Alaska 1983).

Cited in

Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988).

Sec. 43.20.037. Trade or business energy conservation credit. [Repealed, § 50 ch 83 SLA 1980.]

Secs. 43.20.038 — 43.20.039. Residential fuel and residential fuel conservation credits. [Repealed, § 10 ch 1 SSSLA 1980.]

Sec. 43.20.040. Income from sources in the state.

  1. In this chapter, income from sources in the state includes
    1. income from real or tangible personal property located in the state;
    2. income of whatever nature from a business, trade or profession having a business situs in the state and compensation for services rendered in the state;
    3. income from stocks, bonds, notes, bank deposits, and other intangible personal property having a taxable or business situs in the state;
    4. rentals and royalties for the use of or for the privilege of using, in the state, patents, copyrights, secret processes and formulas, good will, marks, trade brands, franchises, and other property having a taxable or business situs in the state.
  2. In this section, income is from a source having a taxable or business situs in the state if it is derived from
    1. owning or operating business facilities or property in the state;
    2. conducting business, farming, or fishing operations in the state;
    3. [Repealed, § 10 ch 1 SSSLA 1980.]
    4. a partnership which transacts business in the state;
    5. a corporation which transacts business in the state which has elected to file federal returns under subchapter S of the Internal Revenue Code;
    6. [Repealed, § 10 ch 1 SSSLA 1980.]
    7. engaging in any other activity from which income is received, realized or derived in the state.
  3. The receipt of income derived solely from interest earned on property in the state does not alone establish a taxable or business situs in the state.

History. (§ 5 B ch 115 SLA 1949; am § 1 ch 132 SLA 1951; am § 2 ch 188 SLA 1955; am § 7 ch 70 SLA 1975; am § 10 ch 1 SSSLA 1980 and § 9 ch 2 SSSLA 1980; am § 2 ch 132 SLA 1996)

Cross references. —

For legislative findings and purpose of the 1980 amendments, see § 1, ch. 1, SSSLA 1980, and § 1, ch. 2, SSSLA 1980, in the Temporary and Special Acts; for legislative intent relating to the 1996 amendments to this section made by ch. 132, SLA 1996, see § 1, ch. 132, SLA 1996 in the Temporary and Special Acts.

Administrative Code. —

For corporate net income tax; combination and apportionment rules, see 15 AAC 20, art. 3.

For corporate net income tax; special rules for oil and gas corporations, see 15 AAC 20, art. 4.

Notes to Decisions

Alaska can constitutionally levy tax on net income of seamen engaged in interstate and foreign commerce, where the tax is levied only on that portion of the seamen’s net income which is attributed to their activity within the boundaries of the State of Alaska. State v. Petronia, 69 Wn.2d 460, 418 P.2d 755 (Wash. 1966).

Stated in

Cogan v. State, Dep't of Revenue, 657 P.2d 396 (Alaska 1983).

Sec. 43.20.042. Special industrial incentive investment tax credits.

  1. Subject to (c) of this section, for purposes of calculating eligible taxes the taxpayer may apply as a credit against eligible taxes the following percentage of the investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue Code) on only the first $250,000,000 of qualified investment in the state for each taxable year after December 31, 1984, for a gas processing project: (1) 100 percent on the first $50,000,000 of qualified investment; (2) 80 percent on qualified investment over $50,000,000 but not exceeding $100,000,000; (3) 70 percent on qualified investment over $100,000,000 but not exceeding $150,000,000; (4) 60 percent on qualified investment over $150,000,000 but not exceeding $200,000,000; and (5) 40 percent on qualified investment over $200,000,000 but not exceeding $250,000,000. A credit may not be allowed under this subsection for an investment credit that is allowed as to federal taxes for leased property by reason of 26 U.S.C. 168(f)(8) (Internal Revenue Code).  In this subsection, “gas processing project” means the integrated plant, facilities, and equipment, including pollution control equipment, used for preparation of consumer or transportation gas, or for conditioning, fractionation, storage, handling or processing of a product, other than crude oil, of an oil or gas well, into liquefied natural gas, methanol, ammonia, urea, olefins, propanes, butanes, polymers and intermediate hydrocarbon products; it does not include a pipeline from oil and gas wells to or from a plant and facilities.
  2. Subject to (c) of this section, for purposes of calculating eligible taxes the taxpayer may apply as a credit against eligible taxes the following percentage of the investment credit allowed as to federal taxes under 26 U.S.C. 38 (Internal Revenue Code) on only the first $250,000,000 of qualified investment in the state for each taxable year after December 31, 1984, for exploration, drilling of wells, development, or mining of the minerals and other natural deposits listed in 26 U.S.C. 613(b) (Internal Revenue Code) other than sand or gravel unless the mining of sand or gravel is ancillary to a mining development involving a qualified natural deposit other than sand or gravel: (1) 100 percent on the first $50,000,000 of qualified investment; (2) 80 percent on qualified investment over $50,000,000 but not exceeding $100,000,000; (3) 70 percent on qualified investment over $100,000,000 but not exceeding $150,000,000; (4) 60 percent on qualified investment over $150,000,000 but not exceeding $200,000,000; and (5) 40 percent on qualified investment over $200,000,000 but not exceeding $250,000,000.  A credit may not be allowed under this subsection for any investment credit that is allowed as to federal taxes for leased property by reason of 26 U.S.C. 168(f)(8) (Internal Revenue Code).  In this subsection, “mining” has the meaning given in 26 U.S.C. 613(c)(2) (Internal Revenue Code).
  3. A taxpayer may not claim an investment tax credit under (a) or (b) of this section unless the gas processing project or mining project began operation and production after December 31, 1984.  A gas processing or mining project is considered to have begun operation and production when the first product or mineral is produced that is ultimately either sold or transferred for further processing or ultimate use.
  4. A taxpayer may not claim an additional investment tax credit under AS 43.20.036(b) for an investment for which a special industrial incentive investment tax credit is claimed under (a) or (b) of this section.
  5. If a taxpayer making an investment that qualifies for the investment tax credit under this section is a member of a group of affiliated corporations filing a consolidated return under the provisions of this chapter, the amount of the investment tax credit that may be claimed on the consolidated return is limited to the amount the taxpayer making the qualified investment would have been eligible to claim had a consolidated return not been filed.
  6. The investment tax credit per taxable year allowed by (a) and (b) of this section may not exceed 60 percent of the eligible tax liability.  Any unused portion of the investment tax credit shall be subject to the carry forward provisions in 26 U.S.C. 46(b)(3) (Internal Revenue Code) except that the unused credit may not be carried forward to tax years beginning after December 31, 1999.
  7. Except as provided in (f) of this section, a tax credit under this section may not be claimed on investments made after December 31, 1994.
  8. In this section “eligible taxes” means the total tax liability of a taxpayer for the annual taxes due under the provisions of this chapter and AS 43.65.

History. (§ 4 ch 60 SLA 1984)

Editor’s notes. —

26 U.S.C. 168(f)(8), referred to in subsections (a) and (b), no longer exists. Also, 26 U.S.C. 46(b)(3), referred to in subsection (f), no longer exists.

Sec. 43.20.043. Gas exploration and development tax credit. [Repealed, §§ 2, 5, ch 61 SLA 2003, as amended by § 16 ch 15 SLA 2010.]

Sec. 43.20.044. Exploration credits.

  1. A taxpayer may apply as a credit against the tax levied under this chapter
    1. the exploration incentive credit authorized by AS 27.30;
    2. an alternative tax credit for oil and gas exploration earned by the taxpayer under AS 43.55.025 for exploration expenditures incurred for work performed on or after July 1, 2016.
  2. In a tax year in which a taxpayer applies against the tax levied under this chapter the exploration incentive credit authorized by AS 27.30, the commissioner shall require the taxpayer to submit the accounting of mining operation activities form required by AS 27.30.030(b) .

History. (§ 4 ch 86 SLA 1995; am § 4 ch 3 SSSLA 2017)

Cross references. —

For provision providing that the 2017 amendment to subsection (a) applies to a tax credit “earned under AS 43.55.026 for work performed on or after July 1, 2016”, see sec. 33, ch. 3, SSSLA 2017, in the 2017 Temporary and Special Acts.

Effect of amendments. —

The 2017 amendment, effective July 28, 2017, added (a)(2), and made related changes.

Editor's notes. —

Under § 6, ch. 86, SLA 1995, this section “is retroactive to January 1, 1995 and applies to activities that qualify for the exploration incentive credit authorized by AS 27.30 that are undertaken after May 15, 1995.”

Sec. 43.20.045. Proration of part-year resident and nonresident individual credits. [Repealed, § 10 ch 1 SSSLA 1980.]

Sec. 43.20.046. Gas storage facility tax credit.

  1. A person that is an owner of a gas storage facility described in (b) of this section that commences commercial operation after December 31, 2010, and before January 1, 2016, may apply a refundable credit against a tax liability that may be imposed on the person under this chapter for the taxable year in which the gas storage facility commences commercial operation. The tax credit under this section shall be an amount equal to $1.50 for each 1,000 cubic feet of working gas storage capacity that is certified under AS 31.05.032 less any amount of credit received under this section taken in earlier tax years for that capacity. The total amount of the credit that may be received for a single gas storage facility under this section may not exceed the lesser of $15,000,000 or 25 percent of the costs incurred to establish the gas storage facility. The tax credit in this section is in addition to any other credit under this chapter for which the person is eligible.
  2. A gas storage facility qualifying for the credit in this section
    1. must have a working gas storage capacity of at least 500,000,000 cubic feet of gas other than cushion gas;
    2. must have a minimum withdrawal capability of 10,000,000 cubic feet a day as certified by the Alaska Oil and Gas Conservation Commission under AS 31.05.032 ;
    3. may not have been in operation as a gas storage facility before January 1, 2011;
    4. must be regulated under AS 42.05 as a utility and be available to furnish the service of natural gas storage to the public for compensation; in this paragraph, “service of natural gas storage” has the meaning given in AS 42.05.990 ; and
    5. if located on state land and leased or subject to a lease under AS 38.05.180 , must be in compliance with the terms of the lease.
  3. To claim the credit, the person shall submit to the department a copy of the certification of working gas storage capacity and withdrawal capability issued under AS 31.05.032 , the date that the gas storage facility commenced commercial operation, and other information required by the department. A person applying the credit against a liability under this chapter shall claim the credit on the person’s return.
  4. A person entitled to a tax credit under this section that is greater than the person’s tax liability under this chapter may request a refund in the amount of the unused portion of the tax credit.
  5. Subject to the requirements in AS 43.55.028 , the department may use either available money in the oil and gas tax credit fund established in AS 43.55.028 or, subject to appropriation by the legislature, money disbursed to the commissioner for refunds under AS 43.55.028 from the Alaska Tax Credit Certificate Bond Corporation reserve fund established in AS 37.18.040 , or both, to make the refund applied for under (d) of this section in whole or in part if the department finds that, after application of all available tax credits, the claimant’s total tax liability under this chapter for the calendar year in which the claim is made is zero.
  6. For the purpose of determining the amount of the credit under this section, the working gas storage capacity on which the credit is based shall be the capacity certified by the Alaska Oil and Gas Conservation Commission under AS 31.05.032 .
  7. A person may not receive a credit under this section for the acquisition of a gas storage facility for which a credit has been granted under this section.
  8. If the gas storage facility for which a credit was received under this section ceases commercial operation during the nine calendar years immediately following the calendar year in which the gas storage facility commences commercial operation, the tax liability under this chapter of the person who claimed the credit shall be increased. The amount of the increase in tax liability
    1. shall be determined and assessed for the taxable year in which the gas storage facility ceases commercial operation, regardless of whether the gas storage facility subsequently resumes commercial operation; and
    2. is equal to the total amount of the credit taken multiplied by a fraction, the numerator of which is the difference between 10 and the number of calendar years for which the gas storage facility was eligible for a tax credit under this section and the denominator of which is 10.
  9. The issuance of a refund under this section does not limit the department’s ability to later audit or adjust the claim if the department determines, as a result of the audit, that the person that claimed the credit was not entitled to the amount of the credit. The tax liability of the person receiving the credit under this chapter is increased by the amount of the credit that exceeds that to which the person was entitled. If the tax liability is increased under this subsection, the increase bears interest under AS 43.05.225 from the date the refund was issued.
  10. A person claiming a tax credit under this section for a gas storage facility that ceases commercial operation within nine calendar years immediately following the calendar year in which the gas storage facility commences commercial operation shall notify the department in writing of the date the gas storage facility ceased commercial operation. The notice must be filed with the return for the taxable year in which the gas storage facility ceases commercial operation.
  11. A refund under this section does not bear interest.
  12. In this section, “ceases commercial operation,” “commences commercial operation,” “gas storage facility,” and “working gas storage capacity” have the meanings given in AS 31.05.032 .

History. (§ 12 ch 16 SLA 2010; am § 10 ch 4 4SSLA 2016; am § 3 ch 33 SLA 2018)

Effect of amendments. —

The 2016 amendment, effective January 1, 2017, in (e), inserted “Subject to the requirements in AS 43.55.028(j) , the” at the beginning; deleted “(1) the claimant does not have an outstanding liability to the state for unpaid delinquent taxes under this title; and (2)” preceding “after application”; deleted the last sentence, which read “In this subsection, ‘unpaid delinquent tax’ means an amount of tax for which the department has issued an assessment that has not been paid and, if contested, has not been finally resolved in the taxpayer’s favor.”, and made related changes.

The 2018 amendment, effective June 21, 2018, in (e), substituted “AS 43.55.028 ” for “AS 43.55.028(j) ” following “the requirements in”, inserted “either” preceding “available money”, inserted “or, subject to appropriation by the legislature, money disbursed to the commissioner for refunds under AS 43.55.028 from the Alaska Tax Credit Certificate Bond Corporation reserve fund established in AS 37.18.040 , or both,” preceding “to make the refund”.

Editor's notes. —

Under sec. 35(a), ch. 4, 4SSLA 2016, the 2016 amendment to subsection (e) applies “to a purchase applied for on or after January 1, 2017.”

Legislative history reports. —

For governor's transmittal letter for ch. 33, SLA 2018 (HB 331), which amended this section, see 2018 House Journal 2341 — 2343.

Notes to Decisions

Cited in

Forrer v. State, 471 P.3d 569 (Alaska 2020).

Sec. 43.20.047. Liquefied natural gas storage facility tax credit.

  1. A person that is an owner of a liquefied natural gas storage facility described in (b) of this section that commences commercial operation before January 1, 2020, may apply a refundable credit against a tax liability that may be imposed on the person under this chapter or receive the amount of the credit in the form of a payment for the taxable year in which the liquefied natural gas storage facility commences commercial operation. The tax credit or payment under this section may not exceed the lesser of $15,000,000 or 50 percent of the costs incurred to establish or expand the liquefied natural gas storage facility. The tax credit in this section is in addition to any other credit under this chapter for which the person is eligible.
  2. To qualify for the credit in this section, a liquefied natural gas storage facility
    1. must have a liquefied natural gas storage volume of not less than 25,000 gallons of liquefied natural gas, or, if the credit is claimed for an expansion, the expansion must have increased the capacity of an existing liquefied natural gas storage facility by more than 25,000 gallons;
    2. may not have been in operation as a liquefied natural gas storage facility before January 1, 2011, unless the tax credit in this section is based on the expansion of the liquefied natural gas storage facility after December 31, 2011;
    3. must be regulated under AS 42.05 as a utility and be available to furnish the service of liquefied natural gas storage to customers, utilities, or industrial facilities; in this paragraph, “service of liquefied natural gas storage” has the meaning given in AS 42.05.990 ;
    4. if located on state land and leased or subject to a lease under AS 38.05, must be in compliance with the terms of the lease; and
    5. must have commenced commercial operation on or before the date the person takes a credit under (a) of this section or applies for a payment under (a) of this section.
  3. To claim the credit or request a payment, a person shall submit to the department a certification of the capacity of the liquefied natural gas storage facility measured in gallons or the capacity of an expansion to an existing liquefied natural gas storage facility measured in gallons, the date that the liquefied natural gas storage facility commenced commercial operation, the date that any expansion to the liquefied natural gas storage facility commenced commercial operation, and other information required by the department.
  4. A person applying the credit under this section against a liability under this chapter shall claim the credit on the person’s return. A person entitled to a tax credit under this section that is greater than the person’s tax liability under this chapter may request a refund or payment in the amount of the unused portion of the tax credit.
  5. Subject to the requirements in AS 43.55.028 , the department may use either money available in the oil and gas tax credit fund established in AS 43.55.028 or, subject to appropriation by the legislature, money disbursed to the commissioner for refunds and payments under AS 43.55.028 from the Alaska Tax Credit Certificate Bond Corporation reserve fund established in AS 37.18.040 , or both, to make a refund or payment under (d) of this section in whole or in part if the department finds that, after application of all available tax credits, the claimant’s total tax liability under this chapter for the calendar year in which the claim is made is zero.
  6. For the purpose of determining the amount of the credit under this section, the costs incurred to establish a liquefied natural gas storage facility or to expand a liquefied natural gas storage facility shall be submitted to the department with verification by an independent certified public accountant licensed in the state. The volume of working liquefied natural gas storage or volume of the expansion to an existing liquefied natural gas storage facility shall be verified by a professional engineer licensed in the state with relevant experience.
  7. A person may not receive a credit under this section for the acquisition of a liquefied natural gas storage facility for which a credit has been taken under this section.
  8. If the liquefied natural gas storage facility for which a credit was received under this section ceases commercial operation during the nine calendar years immediately following the calendar year in which the liquefied natural gas storage facility commences commercial operation, the tax liability under this chapter of the person who claimed the credit shall be increased, and a person not subject to the tax under this chapter that received a payment under (d) and (e) of this section shall be liable to the state in the amount determined in this subsection. The amount of the increase in tax liability or liability to the state
    1. for a person subject to the tax under this chapter, shall be determined and assessed for the taxable year in which the liquefied natural gas storage facility ceases commercial operation, regardless of whether the liquefied natural gas storage facility subsequently resumes commercial operation;
    2. for a person not subject to the tax due under this chapter, shall be determined and assessed as of December 31 of the calendar year in which the liquefied natural gas storage facility ceases commercial operation, regardless of whether the liquefied natural gas storage facility subsequently resumes commercial operation; and
    3. is equal to the total amount of the credit taken or received as a payment under (d) of this section, as applicable, multiplied by a fraction, the numerator of which is the difference between 10 and the number of calendar years for which the liquefied natural gas storage facility was eligible for a tax credit under this section and the denominator of which is 10.
  9. The issuance of a refund under this section does not limit the department’s ability to later audit or adjust the claim if the department determines, as a result of the audit, that the person that claimed the credit was not entitled to the amount of the credit. The tax liability of the person receiving the credit under this section is increased by the amount of the credit that exceeds that to which the person was entitled. If the tax liability is increased under this subsection, the increase bears interest at the rate set by AS 43.05.225 from the date the refund was issued.
  10. A person claiming a tax credit under this section for a liquefied natural gas storage facility that ceases commercial operation within nine calendar years immediately following the calendar year in which the liquefied natural gas storage facility commences commercial operation shall notify the department in writing of the date the liquefied natural gas storage facility ceased commercial operation. The notice must be filed with the return for the taxable year in which the liquefied natural gas storage facility ceases commercial operation.
  11. A refund under this section does not bear interest.
  12. In this section,
    1. “ceases commercial operation” means that the liquefied natural gas storage facility fails to add or withdraw 20 percent or more of its working capacity of liquefied natural gas during a calendar year after the calendar year in which the liquefied natural gas storage facility commences commercial operation;
    2. “commences commercial operation” means the first input of liquefied natural gas into a liquefied natural gas storage facility for purposes other than testing;
    3. “liquefied natural gas storage facility” has the meaning given in AS 42.05.990 .

History. (§ 9 ch 51 SLA 2012; am § 11 ch 4 4SSLA 2016; am § 4 ch 33 SLA 2018)

Effect of amendments. —

The 2016 amendment, effective January 1, 2017, in (e), inserted “Subject to the requirements in AS 43.55.028(j) , the” at the beginning; deleted “(1) the claimant does not have an outstanding liability to the state for unpaid delinquent taxes under this title; and (2)” preceding “after application”; deleted the last sentence, which read “In this subsection, ‘unpaid delinquent tax’ means an amount of tax for which the department has issued an assessment that has not been paid and, if contested, has not been finally resolved in the taxpayer’s favor.”, and made related changes.

The 2018 amendment, effective June 21, 2018, in (e), substituted “AS 43.55.028 ” for “AS 43.55.028(j) ” following “the requirements in”, inserted “either” preceding “money available”, inserted “or, subject to appropriation by the legislature, money disbursed to the commissioner for refunds and payments under AS 43.55.028 from the Alaska Tax Credit Certificate Bond Corporation reserve fund established in AS 37.18.040 , or both,” preceding “to make a refund”.

Editor's notes. —

Under sec. 35(a), ch. 4, 4SSLA 2016, the 2016 amendment to subsection (e) applies "to a purchase applied for on or after January 1, 2017."

Legislative history reports. —

For governor's transmittal letter for ch. 33, SLA 2018 (HB 331), which amended this section, see 2018 House Journal 2341 — 2343.

Notes to Decisions

Cited in

Forrer v. State, 471 P.3d 569 (Alaska 2020).

Sec. 43.20.048. Veteran employment tax credit.

  1. A taxpayer that hires a veteran and employs the veteran in the state is entitled to a credit under this section against the tax due under this chapter. The taxpayer is entitled to the credit for each veteran whose employment qualifies under this section.
  2. To qualify as a veteran for the purposes of the credit under this section, the veteran must have been unemployed for more than four weeks immediately preceding the date employment begins and must have been discharged or released from military service
    1. not more than 10 years before the date employment begins in the case of a veteran who is a disabled veteran; or
    2. not more than two years before the date employment begins in the case of a veteran who is not a disabled veteran.
  3. The amount of credit that may be applied by a taxpayer for each qualifying veteran under this section is,
    1. for a veteran employed in the state for 1,560 hours or more during the 12 consecutive months immediately following the date the veteran is first employed,
      1. $3,000 for a disabled veteran; and
      2. $2,000 for a veteran who is not disabled;
    2. for a veteran employed in the state for 500 hours or more in a seasonal position during the three consecutive months immediately following the date the veteran is first employed by an employer in a seasonal position, $1,000; an employer that hires a veteran for a seasonal position may take the credit under this paragraph only for the first season in which the employer employs the veteran.
  4. The tax credit under this section may be applied against the tax due under this chapter for the first tax year ending on or after the end of the employment period described in (c) of this section. The credit may not be used to reduce a person’s tax liability under this chapter below zero for any tax year, and any credit or portion of a credit not used under this section may be applied in a later tax year.
  5. A taxpayer shall keep a record of the name of the veteran employee whose employment is the basis for a credit under this section, documentation supporting the employee’s qualification as a veteran or disabled veteran, and the veteran employee’s hours employed and period of employment. The department may adopt a regulation that lists the documentation that must be maintained to support a claim that an employee qualifies as a veteran or disabled veteran for purposes of this section.
  6. In this section,
    1. “disabled veteran” has the meaning given in AS 39.25.159 ;
    2. “seasonal position” means employment that is not intended to continue through an entire calendar year but recurs annually;
    3. “veteran” means an individual who served in and was honorably discharged from the
      1. armed forces of the United States, including a reserve unit of the armed forces of the United States; or
      2. Alaska Territorial Guard, the Alaska Army National Guard, the Alaska Air National Guard, or the Alaska Naval Militia.

History. (§ 3 ch 68 SLA 2012)

Revisor’s notes. —

Enacted as AS 43.20.047 and renumbered in 2012.

Sec. 43.20.049. Qualified oil and gas service industry expenditure credit.

  1. For a tax year beginning after December 31, 2013, a taxpayer may apply a credit against the tax due under this chapter for a qualified oil and gas service industry expenditure incurred in the state. The total amount of credit a taxpayer may receive in a tax year may not exceed the lesser of 10 percent of qualified oil and gas service industry expenditures incurred in the state during the tax year or $10,000,000.
  2. A taxpayer may not apply more than $10,000,000 in tax credits under this section in a tax year. A tax credit or portion of a tax credit under this section may not be used to reduce the taxpayer’s tax liability under this chapter below zero. Any unused tax credit or portion of a tax credit under this section may be applied in later tax years, except that any unused tax credit or portion of a tax credit may not be carried forward for more than five tax years immediately following the tax year in which the qualified oil and gas service industry expenditures were incurred.
  3. An expenditure that is the basis of the credit under this section may not be the basis for
    1. a deduction against the tax levied under this chapter;
    2. a credit or deduction under another provision of this title; or
    3. any federal credit claimed under this title.
  4. Notwithstanding any contrary provision of AS 40.25.100(a) or AS 43.05.230(e) , for a year that three or more taxpayers claim a tax credit under this section, the department may publish the aggregated amount of tax credits claimed under this section and a description of the qualified oil and gas service industry expenditures that were the basis for a tax credit under this section.
  5. In this section,
    1. “manufacture” means to perform substantial industrial operations in the state to transform raw material into tangible personal property with a useful life of three years or more for use in the exploration for, development of, or production of oil or gas deposits;
    2. “modification” means an adjustment, equipping, or other alteration to existing tangible personal property that has a useful life of three years or more and is for use in the exploration for, development of, or production of oil or gas deposits; “modification” does not include minor product alterations or inventory activities;
    3. “qualified oil and gas service industry expenditure” means an expenditure directly attributable to an in-state manufacture or in-state modification of tangible personal property used in the exploration for, development of, or production of oil or gas deposits, but does not include components or equipment used for or in the process of that manufacturing or modification.

History. (§ 3 ch 10 SLA 2013)

Sec. 43.20.050. Taxpayer liable. [Repealed, § 13 ch 70 SLA 1975.]

Sec. 43.20.051. [Renumbered as AS 43.20.141.]

Sec. 43.20.052. Credit for the in-state manufacture of urea, ammonia, or gas-to-liquid products.

  1. A taxpayer that owns an interest, either directly or through a partnership or limited liability company, in an in-state processing facility whose primary function is the manufacturing and sale of urea, ammonia, or gas-to-liquid products to third parties in arm’s length transactions is entitled to receive a credit under this section against the tax due under this chapter. The credit under this section is equal to the percentage of the amount of royalty paid under AS 38.05.135 on natural gas from a state lease that is delivered in the taxable year of the taxpayer for use at the in-state processing facility equal to the percentage of the ownership interest held by the taxpayer in the in-state processing facility.
  2. A tax credit or portion of a tax credit under this section may not be used to reduce a taxpayer’s tax liability under this chapter below zero. An unused tax credit or portion of a tax credit received under this section may not be carried forward for use in a taxable year of the taxpayer after the taxable year in which the credit is earned.
  3. To claim a credit under this section, the taxpayer shall
    1. report to the department the name of each lessee delivering natural gas for use at the in-state processing facility, the identification and quantity of natural gas from each state lease that is the source of the natural gas, the ownership percentage of the taxpayer in the in-state processing facility, and the price for the natural gas established in a contract between the in-state processing facility and the lessee delivering the natural gas; and
    2. demonstrate to the department that the taxpayer, to the maximum extent possible,
      1. hires qualified residents from throughout the state for the management, engineering, construction, operation, and maintenance of, and other positions for, the in-state processing facility;
      2. establishes hiring facilities in the state or uses existing hiring facilities in the state; and
      3. uses, as far as practicable, the job centers and associated services operated by the Department of Labor and Workforce Development or an Internet-based labor exchange system operated by the state.
  4. In this section, “gas-to-liquid product” has the meaning given in AS 38.05.180 (ll).

History. (§ 2 ch 58 SLA 2016)

Delayed repeal of section. —

Under secs. 3 and 6, ch. 58, SLA 2016, this section is repealed January 1, 2024.

Effective dates. —

Section 5, ch. 58, SLA 2016, makes this section effective July 1, 2017.

Editor's notes. —

Under sec. 4, ch. 58, SLA 2016, this section “applies to the amount of royalty paid under AS 38.05.135 on natural gas from a state lease that is delivered for use at an in-state processing facility whose primary function is the manufacturing and sale of urea, ammonia, or gas-to-liquid products to third parties in arm's length transactions on or after July 1, 2017, and before January 1, 2024.”

Legislative history reports. —

For governor's transmittal letter for ch. 4, 4SSLA 2016 (HB 247) proposing changes to oil and gas tax credits and oil and gas taxes, see 2016 House Journal 1437 — 1439.

Sec. 43.20.052. Credit for the in-state manufacture of urea, ammonia, or gas-to-liquid products.

History. [§ 2 ch 58 SLA 2016; Repealed, § 3 ch 58 SLA 2016.]

Sec. 43.20.053. Qualified in-state oil refinery infrastructure expenditures tax credit.

  1. A taxpayer that owns an in-state oil refinery whose primary function is the manufacturing and sale of refined petroleum products to third parties in arm’s length transactions may apply a credit against the tax due under this chapter for a qualified infrastructure expenditure incurred in the state for a tax year beginning after December 31, 2014, and before January 1, 2020. The total amount of credit a taxpayer may receive under this section may not exceed the lesser of 40 percent of qualified infrastructure expenditures incurred in the state during the tax year or $10,000,000 for each in-state refinery for which qualified expenditures are incurred.
  2. A taxpayer applying the credit under this section against a liability under this chapter shall claim the credit on the taxpayer’s return. A tax credit or portion of a tax credit under this section may not be used to reduce the taxpayer’s tax liability under this chapter below zero. Any unused tax credit or portion of a tax credit under this section may be carried forward to the five tax years immediately following the tax year in which the qualified infrastructure expenditures were incurred.
  3. An expenditure that is the basis of the credit under this section may not be the basis for
    1. a deduction against the tax levied under this chapter;
    2. a credit or deduction under another provision of this title; or
    3. any federal credit claimed under this title.
  4. A person entitled to a tax credit under this section that is greater than the person’s tax liability under this chapter may request a refund or payment in the amount of the unused portion of the tax credit.
  5. Subject to the requirements in AS 43.55.028 , the department may use either money available in the oil and gas tax credit fund established in AS 43.55.028 or, subject to appropriation by the legislature, money disbursed to the commissioner for refunds and payments under AS 43.55.028 from the Alaska Tax Credit Certificate Bond Corporation reserve fund established in AS 37.18.040 , or both, to make a refund or payment under (d) of this section in whole or in part if the department finds that, after application of all available tax credits, the claimant’s total tax liability under this chapter for the calendar year in which the claim is made is zero.
  6. A refund under this section does not bear interest.
  7. If an oil refinery ceases commercial operation during the nine calendar years immediately following the calendar year in which a credit under this section was received, regardless of whether commercial operation later resumes, the taxpayer’s tax liability under this chapter will be increased. The tax liability increase is equal to the total amount of credit taken multiplied by a fraction
    1. the numerator of which is the difference between 10 and the number of calendar years for which the oil refinery was eligible for a credit under this section; and
    2. the denominator of which is 10.
  8. A person claiming a tax credit under this section for an oil refinery that ceases commercial operation or is sold during the nine calendar years immediately following the calendar year in which a credit under this section was received shall notify the department in writing of the date the oil refinery ceased commercial operation or was sold. The notice must be filed with the return for the tax year in which the oil refinery ceases commercial operation or was sold.
  9. The issuance of a refund under this section does not limit the department’s ability to later audit or adjust the claim as provided in AS 43.05 if the department determines that the taxpayer claiming the credit was not entitled to the amount of the credit.
  10. In this section,
    1. “modification” means an adjustment or other alteration to existing tangible personal property that has a useful life of three years or more;
    2. “qualified infrastructure expenditure” means an expenditure for the in-state purchase, installation, or modification of tangible personal property for the in-state manufacture or in-state transport of refined petroleum products, or petroleum-based feedstock;
    3. “refined petroleum products” means separate marketable elements, compounds, or mixtures of oil in liquid form, including gasoline, diesel, jet fuel, gas oil, heating oil, and kerosene;
    4. [Repealed, § 33, ch. 4, 4SSLA 2016.]

History. (§ 3 ch 108 SLA 2014; am §§ 12, 33 ch 4 4SSLA 2016; am § 5 ch 33 SLA 2018)

Effect of amendments. —

The 2016 amendment, effective January 1, 2017, in (e), inserted “Subject to the requirements in AS 43.55.028(j) , the” at the beginning; deleted “(1) the claimant does not have an outstanding liability to the state for unpaid delinquent taxes under this title; and (2)” preceding “after application”; repealed (j)(4).

The 2018 amendment, effective June 21, 2018, in (e), substituted “AS 43.55.028 ” for “AS 43.55.028(j) ” following “the requirements in”, inserted “either” preceding “money available”, inserted “or, subject to appropriation by the legislature, money disbursed to the commissioner for refunds and payments under AS 43.55.028 from the Alaska Tax Credit Certificate Bond Corporation reserve fund established in AS 37.18.040 , or both,” preceding “to make a refund”.

Editor's notes. —

Under sec. 35(a), ch. 4, 4SSLA 2016, the 2016 amendment to subsection (e) applies "to a purchase applied for on or after January 1, 2017."

Legislative history reports. —

For governor's transmittal letter for ch. 33, SLA 2018 (HB 331), which amended this section, see 2018 House Journal 2341 — 2343.

Notes to Decisions

Cited in

Forrer v. State, 471 P.3d 569 (Alaska 2020).

Sec. 43.20.060. Direct allocation. [Repealed, § 13 ch 70 SLA 1975.]

Sec. 43.20.061. Credit for taxes paid another state. [Repealed, § 10 ch 1 SSSLA 1980.]

Sec. 43.20.065. [Renumbered as AS 43.20.142.]

Sec. 43.20.070. Employees of interstate carriers. [Repealed, § 13 ch 70 SLA 1975.]

Sec. 43.20.071. [Renumbered as AS 43.20.143.]

Sec. 43.20.072. [Renumbered as AS 43.20.144.]

Sec. 43.20.073. [Renumbered as AS 43.20.145.]

Article 2. Allocation and Apportionment.

Notes to Decisions

Former law construed. —

For case law construing provisions of the former Uniform Division of Income for Tax Purposes Act, AS 43.20.050 43.20.150 , see Department of Revenue, Child Support Enforcement Div. v. Beans, 965 P.2d 725 (Alaska 1998).

Collateral references. —

71 Am. Jur. 2d, State and Local Taxation, §§ 474, 477-483.

85 C.J.S., Taxation, §§ 1826-1828, 1838-1841, 1854-1861.

Secs. 43.20.080 — 43.20.140. Allocation of nonbusiness income; net rents and royalties; capital gains and losses; interests and dividends; patent and copyright royalties; allocation of business income; apportionment by commissioner. [Repealed, § 13 ch 70 SLA 1975.]

Sec. 43.20.141. Income from sources in the state of nonresident partners.

In determining the source of a nonresident partner’s income, effect may not be given to a provision in the partnership agreement that

  1. characterizes payments to the partner as being for services or for the use of capital;
  2. allocates to the partner, as income or gain from sources outside the state, a greater proportion of the partner’s distributive share of partnership income or gain than the ratio of partnership income or gain from sources outside the state to partnership income or gain from all sources; or
  3. allocates to the partner a greater proportion of a partnership item of loss or deduction connected to Alaska sources than the partner’s proportionate share, for federal income tax purposes of partnership loss or education generally.

History. (§ 8 ch 70 SLA 1975)

Revisor’s notes. —

Formerly AS 43.20.051 . Renumbered in 2012.

Sec. 43.20.142. Allocation and apportionment.

A taxpayer who has income from business activity that is taxable both inside and outside the state or income from other sources both inside and outside the state shall allocate and apportion net income as provided in AS 43.19 (Multistate Tax Compact), or as provided by this chapter.

History. (§ 8 ch 70 SLA 1975; am § 23 ch 113 SLA 1980)

Revisor’s notes. —

Formerly AS 43.20.065 . Renumbered in 2012.

Administrative Code. —

For special rules: construction contractors, see 15 AAC 19, art. 10.

For corporate net income tax; combination and apportionment rules, see 15 AAC 20, art. 3.

For corporate net income tax; special rules for financial organizations and, see 15 AAC 20, art. 6.

For application of tax, see 15 AAC 21, art. 1.

Notes to Decisions

Constitutionality of chapter. —

The Alaska Net Income Tax Act is constitutional as applied to nonresident crab fishermen who fish off the coast of Alaska in international waters and sell their catch to Alaska processors, and such taxation does not violate the due process and commerce clauses of the United States Constitution, or of the Interstate Income Act, 15 U.S.C. § 381. Sjong v. State, Dep't of Revenue, 622 P.2d 967 (Alaska 1981), overruled in part, Rosen v. State Bd. of Pub. Accountancy, 689 P.2d 478 (Alaska 1984).

This chapter is not unconstitutional as wanting in uniformity. Alaska S.S. Co. v. Mullaney, 84 F. Supp. 561, 12 Alaska 433 (D. Alaska 1949), aff'd, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

Alaska can constitutionally levy tax on net income of seamen engaged in interstate and foreign commerce, where the tax is levied only on that portion of the seamen’s net income which is attributed to their activity within the boundaries of the State of Alaska. State v. Petronia, 69 Wash. 2d 460, 418 P.2d 755 (1966) (Decided under former AS 43.20.130).

Allocation formula held valid. —

Because the allocation formula adopted by the Department of Revenue was constitutional on its face, and did not produce a grossly distorted result in the assessment of the taxpayer’s tax liability, the apportionment formula was valid. Sjong v. State, Dep’t of Revenue, 622 P.2d 967 (Alaska 1981), appeal dismissed, 454 U.S. 1131, 102 S. Ct. 986, 71 L. Ed. 2d 284 (1982) (Decided under former AS 43.20.130 and 43.20.140).

Finding of unity is prerequisite to constitutional application of Alaska’s apportionment formula. Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960 (Alaska 1983).

Unitary business. —

Evidence of parent corporation’s extensive involvement in management and in financing of subsidiary’s business operations, and of benefit to subsidiary from various economies of scale warranted finding of a unitary business to which apportionment formula of this section must be applied. Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960 (Alaska 1983).

Burden of proof. —

A heavy burden is placed on a taxpayer challenging a state’s allocation of his income to prove by clear and cogent evidence that the income attributed by the state is out of all appropriate proportion to the business transacted in that state, or has led to a grossly distorted result. Sjong v. State, Dep't of Revenue, 622 P.2d 967 (Alaska 1981), overruled in part, Rosen v. State Bd. of Pub. Accountancy, 689 P.2d 478 (Alaska 1984).

One who attacks on apportionment formula’s application to a unitary business may do so only with a showing of clear and cogent evidence, and trial court erred in applying standard which addressed whether the record as a whole contained substantial evidence from which department could have concluded that the supporting department’s conclusion that a business is unitary in nature; however, such error was harmless where correct result had been reached by trial court. Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960 (Alaska 1983).

Foreign shipping income. —

Foreign shipping income of a corporation was not exempted by 26 U.S.C. 883(a)(1) from taxation because the provision is impliedly excepted to by the tax scheme employed by the Alaska Net Income Tax Act. Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Out-of-state investment income. —

A corporation’s out-of-state investment income may be apportioned for state taxation only if either (1) the investment itself constitutes part of the corporations’s unitary business (where unitariness is indicated by functional integration, centralization of management, and economies of scale), or (2) the investment is short term and the income is used to fund the unitary business, such that the investment is analogous to a bank account for the unitary business. Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Collateral references. —

Protection of out-of-state sellers from state income tax by Public Law 86-272 (15 U.S.C.A. §§ 381 to 384). 182 ALR Fed. 291.

Sec. 43.20.143. Transportation carriers.

  1. All business income of water transportation carriers shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax Compact) as modified by the following:
    1. the numerator of the property factor is the sum of the value for property in a fixed location, including buildings and land used in the business, and intrastate equipment and personal property determined according to AS 43.19 (Multistate Tax Compact), and the value of interstate mobile property determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator of the property factor is determined according to AS 43.19 (Multistate Tax Compact);
    2. the numerator of the payroll factor is the sum of the wages and salaries of employees assigned to fixed locations determined according to AS 43.19 (Multistate Tax Compact) and the wages and salaries of employees assigned to interstate mobile property determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator of the payroll factor is determined in accordance with AS 43.19 (Multistate Tax Compact);
    3. the numerator of the sales factor is the sum of all revenues from intrastate activities and revenues from interstate activities determined on a days-spent-in-ports basis as provided in (4) of this subsection; the denominator is determined in accordance with AS 43.19 (Multistate Tax Compact);
    4. the portions of the numerator of the property, payroll, and sales factors which are directly related to interstate mobile property operations are determined by a ratio which the number of days spent in ports inside the state bears to the total number of days spent in ports inside and outside the state; the term “days spent in ports” does not include periods when ships are tied up because of strikes or withheld from Alaska service for repairs, or because of seasonal reduction of service; days in port are computed by dividing the total number of hours in all ports by 24.
  2. The department shall, by regulation, adopt formulas to ensure that the total income subject to apportionment under this chapter has been apportioned only to those states having jurisdiction to tax the income.  Transportation carriers other than water carriers shall apportion their income to the state by means of the formulas adopted by the department.

History. (§ 8 ch 70 SLA 1975; am § 24 ch 113 SLA 1980)

Revisor’s notes. —

Formerly AS 43.20.071 . Renumbered in 2012.

Administrative Code. —

For special rules: airlines, see 15 AAC 19, art. 8.

For special rules: land transportation carriers, see 15 AAC 19, art. 9.

For special rules: water transportation carriers, see 15 AAC 19, art. 11.

Notes to Decisions

Alaska can constitutionally levy tax on net income of seamen engaged in interstate and foreign commerce, where the tax is levied only on that portion of the seamen’s net income which is attributed to their activity within the boundaries of the State of Alaska. State v. Petronia, 69 Wash. 2d 460, 418 P.2d 755 (1966) (Decided under former AS 43.20.070 ).

Applicability of days-in-port method of taxation. —

The days-in-port method of taxation is applicable to a taxpayer, not to a subsidiary whose income factors are used to measure a taxpayer’s apportionable income. Earth Resources Co. v. State, Dep't of Revenue, 665 P.2d 960 (Alaska 1983).

When sale has taken place. —

A sale has taken place when crab are delivered to the processor in Alaska under a previously negotiated contract. Sjong v. State, Dep't of Revenue, 622 P.2d 967 (Alaska 1981), overruled in part, Rosen v. State Bd. of Pub. Accountancy, 689 P.2d 478 (Alaska 1984).

Foreign shipping income. —

Foreign shipping income of a corporation was not exempted by 26 U.S.C. 883(a)(1) from taxation because the provision is impliedly excepted to by the tax scheme employed by the Alaska Net Income Tax Act. Department of Revenue v. OSG Bulk Ships, 961 P.2d 399 (Alaska 1998).

Sec. 43.20.144. Oil and gas producers and pipelines.

  1. All business income of a taxpayer engaged in the production of oil or gas from a lease or property in this state or engaged in the transportation of oil or gas by pipeline in this state shall be apportioned to this state in accordance with AS 43.19 (Multistate Tax Compact) as modified by this section.
  2. A taxpayer’s business income to be apportioned under this section to the state shall be the federal taxable income of the taxpayer’s consolidated business for the tax period, except that
    1. taxes based on or measured by net income that are deducted in the determination of the federal taxable income shall be added back; the tax levied and paid under AS 43.55 may not be added back;
    2. intangible drilling and development costs that are deducted as expenses under 26 U.S.C. 263(c) (Internal Revenue Code) in the determination of the federal taxable income shall be capitalized and depreciated as if the option to treat them as expenses under 26 U.S.C. 263(c) (Internal Revenue Code) had not been exercised;
    3. depletion deducted on the percentage depletion basis under 26 U.S.C. 613 (Internal Revenue Code) in the determination of the federal taxable income shall be recomputed and deducted on the cost depletion basis under 26 U.S.C. 612 (Internal Revenue Code); and
    4. depreciation shall be computed on the basis of 26 U.S.C. 167 (Internal Revenue Code) as that section read on June 30, 1981.
  3. A taxpayer’s business income shall be apportioned to this state by multiplying the taxpayer’s income determined under (b) of this section by the apportionment factor applicable to the taxpayer among the following factors:
    1. the apportionment factor of a taxpayer subject to this section but not engaged in the production of oil and gas, or of gas only, as appropriate, from a lease or property in this state during the tax period is a fraction, the numerator of which is the sum of the property factor under AS 43.19 (Multistate Tax Compact) and the sales factor under (d) of this section for the taxpayer for that tax period, and the denominator of which is two;
    2. the apportionment factor of a taxpayer subject to this section but not engaged in the pipeline transportation of oil or gas in this state during the tax period is a fraction, the numerator of which is the sum of the property factor under (e) of this section and the extraction factor under (f) of this section for the taxpayer for the tax period, and the denominator of which is two;
    3. the apportionment factor of a taxpayer engaged both in the production of oil or gas from a lease or property in this state and in the pipeline transportation of oil or gas in this state during the tax period is a fraction, the numerator of which is the sum of the sales factor under (d) of this section, the property factor under (e) of this section, and the extraction factor under (f) of this section for the taxpayer for the tax period, and the denominator of which is three.
  4. The sales factor of a taxpayer subject to this section is a fraction,
    1. the numerator of which is the sum of the following for the tax period:
      1. the tariffs allowed and received by or for the taxpayer for transporting oil or gas by pipeline in this state, regardless of whether the tariffs are paid by third parties or by entities within the taxpayer’s consolidated business; and
      2. the total sales of the taxpayer in this state, determined in accordance with AS 43.19 (Multistate Tax Compact), but excluding
        1. those sales already included in the tariffs described in (A) of this paragraph;
        2. constructive sales or deemed sales of natural gas delivered to the state as payment of tax under an election made by the taxpayer under AS 43.55.014 ;
        3. fees, allowed and received, that are paid between entities within the consolidated business of the taxpayer for transporting the taxpayer’s natural gas; and
    2. the denominator of which is the sum of the following for the tax period:
      1. the tariffs allowed and received by or for the taxpayer’s consolidated business for transporting oil or gas by pipeline everywhere, regardless of whether the tariffs are paid by third parties or by entities within the taxpayer’s consolidated business; and
      2. the total sales of the taxpayer’s consolidated business everywhere, determined in accordance with AS 43.19 (Multistate Tax Compact), but excluding
        1. those sales already included in the tariffs described in (A) of this paragraph;
        2. constructive sales or deemed sales of natural gas delivered to the state as payment of tax under an election made by the taxpayer under AS 43.55.014 or delivered in another tax jurisdiction under a law comparable to AS 43.55.014;
        3. fees, allowed and received, that are paid between entities within the consolidated business of the taxpayer for transporting the taxpayer’s natural gas.
  5. Unless otherwise specified in this section, the property factor of a taxpayer subject to this section is a fraction,
    1. the numerator of which is the sum of the following for the tax period:
      1. the average value, determined under AS 43.19 (Multistate Tax Compact), of the taxpayer’s real and tangible personal property owned or rented and used in this state during the tax period; and
      2. the cumulative intangible drilling and development costs capitalized or expensed for federal income tax purposes under 26 U.S.C. 263(c) (Internal Revenue Code), for the taxpayer’s producing oil and gas wells in this state; and
    2. the denominator of which is the sum of the following for the tax period:
      1. the average value, determined under AS 43.19 (Multistate Tax Compact), of the real and tangible personal property everywhere owned or rented and used by the taxpayer’s consolidated business during the tax period; and
      2. the cumulative intangible drilling and development costs capitalized or expensed for federal income tax purposes under 26 U.S.C. 263(c) (Internal Revenue Code), for the producing oil and gas wells everywhere of the taxpayer’s consolidated business.
  6. The extraction factor of a taxpayer subject to this section is a fraction,
    1. the numerator of which is the sum of the following for the tax period:
      1. the number of barrels of the taxpayer’s oil (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer in this state; and
      2. one-sixth of the number of Mcf of the taxpayer’s gas, excluding reinjected gas but including gas subject to an election under AS 43.55.014 , (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer in this state; and
    2. the denominator of which is the sum of the following for the tax period:
      1. the number of barrels of oil of the taxpayer’s consolidated business (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer’s consolidated business everywhere; and
      2. one-sixth of the number of Mcf of gas, excluding reinjected gas but including gas subject to an election under AS 43.55.014 , of the taxpayer’s consolidated business (net of royalty to an unrelated party) produced from or allocated to leases or properties of the taxpayer’s consolidated business everywhere.
  7. A taxpayer that has signed a contract approved by the legislature as a result of submission of a proposed contract developed under AS 43.82 or as a result of acts by the legislature in implementing the purposes of AS 43.82, providing for payments in lieu of the tax under this chapter and that has nexus with the state solely as the result of the taxpayer’s participation in the approved qualified project that is subject to the contract or would not, but for such participation, be engaged in the production of oil or gas from a lease or property in this state or engaged in the transportation of oil or gas by pipeline in this state, is not required to file a return under this section unless required to do so by the contract.
  8. In this section,
    1. “barrel” means the quantity of oil contained in 42 United States gallons of 231 cubic inches each, measured at a temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds per square inch;
    2. “consolidated business” means a corporation or group of corporations having more than 50 percent common ownership, direct or indirect, or a group of corporations in which there is common control, either direct or indirect, as evidenced by any arrangement, contract, or agreement; the requirements of this chapter apply whether or not the taxpayer is the parent or controlling corporation;
    3. “federal taxable income” means taxable income as the term is used in AS 43.20.011 43.20.142 ;
    4. “gas” means all hydrocarbons produced that are not defined as oil, including all liquid hydrocarbons extracted at a gas processing plant;
    5. “lease or property” has the meaning given it by the department in its regulations;
    6. “Mcf ” means the quantity of gas contained in 1,000 cubic feet of space, measured at a temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds per square inch; and
    7. “oil” means crude petroleum oil and other hydrocarbons, regardless of API gravity, which are produced in liquid form, including the liquid hydrocarbons sometimes known as distillate or condensate which are recovered by separation from gas other than at a gas processing plant.

History. (§ 5 ch 116 SLA 1981; am § 8 ch 104 SLA 1998; am § 48 ch 49 SLA 2004; am § 4 ch 2 TSSLA 2006; am §§ 43, 44 ch 14 SLA 2014)

Revisor’s notes. —

Formerly AS 43.20.072 . Renumbered in 2012, at which time, in subsection (h), “AS 43.20.011 43.20.142 ” was substituted for “AS 43.20.011 43.20.065 ” to reflect the 2012 renumbering of AS 43.20.065 .

Subsection (g) was enacted as (h). Relettered in 1998, at which time former subsection (g) was relettered as (h).

Cross references. —

For findings, intent, and nonseverability provisions related to the enactment of subsection (g), see §§ 1, 2, and 10, ch. 104, SLA 1998 in the 1998 Temporary and Special Acts.

Administrative Code. —

For special rules: water transportation carriers, see 15 AAC 19, art. 11.

For corporate net income tax; administration and credits, see 15 AAC 20, art. 2.

For corporate net income tax; special rules for oil and gas corporations, see 15 AAC 20, art. 4.

Notes to Decisions

Constitutionality. —

Because the company’s business was unitary, the court rejected the company’s challenge to the constitutionality of taxing all of its income under formula apportionment. The company was centrally managed, practiced economies of scale, and its subsidiaries were functionally integrated. Tesoro Corp. v. State, Dep't of Revenue, 312 P.3d 830 (Alaska 2013), cert. denied, 572 U.S. 1149, 134 S. Ct. 2697, 189 L. Ed. 2d 740 (U.S. 2014).

Use of formula apportionment method not constitutionally required. —

The State of Alaska does not, as a matter of constitutional law, have to use the formula apportionment method to determine the portion of each corporation’s worldwide oil production and pipeline transportation income that can be attributed to Alaska; the Oil and Gas Corporate Income Tax, former AS 43.21, which was repealed in 1982, was constitutional. Atlantic Richfield Co. v. State, 705 P.2d 418 (Alaska 1985).

Penalities. —

Administrative law judge did not err in finding penalties to be permissible; the Department of Revenue did not assess penalties because the company failed to acquiesce in the statute’s apportionment scheme, but because the company failed to acknowledge that one business segment was unitary with another. Tesoro Corp. v. State, Dep't of Revenue, 312 P.3d 830 (Alaska 2013), cert. denied, 572 U.S. 1149, 134 S. Ct. 2697, 189 L. Ed. 2d 740 (U.S. 2014).

Taxation formula. —

Department of Revenue applied the three-factor property, sales, and extraction formula to apportion the company’s income, and the company’s ownership of massive infrastructure in the state showed it made greater use of state protections, there was nothing distortive about attributing the company’s tax burden accordingly, the department’s adherence to the widely accepted practice of excluding intangible property was not unreasonable, and the argument that disparate profits across subsidiaries were indicative of unfair taxation was rejected. Tesoro Corp. v. State, Dep't of Revenue, 312 P.3d 830 (Alaska 2013), cert. denied, 572 U.S. 1149, 134 S. Ct. 2697, 189 L. Ed. 2d 740 (U.S. 2014).

Internal consistency. —

Company lacked standing to challenge the internal consistency of the state’s tax scheme because the company did not demonstrate that it was injured by any inconsistency in this scheme, or that the inconsistency it identified had increased its tax burden in Alaska; the company only had to show that there was a risk of multiple taxation because Alaska treated the company unfairly, but the company made no such showing. Tesoro Corp. v. State, Dep't of Revenue, 312 P.3d 830 (Alaska 2013), cert. denied, 572 U.S. 1149, 134 S. Ct. 2697, 189 L. Ed. 2d 740 (U.S. 2014).

Sec. 43.20.145. Affiliated groups.

  1. A corporation that is a member of an affiliated group shall file a return using the water’s edge combined reporting method. A return under this section must include the following corporations if the corporations are part of a unitary business with the filing corporation:
    1. an affiliated corporation that is eligible to be included in a federal consolidated return under 26 U.S.C. 1501 — 1505 (Internal Revenue Code) if the corporation’s property, payroll, and sales factors in the United States average
      1. 20 percent or more; or
      2. under 20 percent, if the corporation does not meet the requirements of 26 U.S.C. 861(c);
    2. a domestic international sales corporation; in this paragraph, “domestic international sales corporation” has the meaning given in 26 U.S.C. 992(a);
    3. a foreign sales corporation; in this paragraph, “foreign sales corporation” has the meaning given to the term “FSC” in 26 U.S.C. 922(a);
    4. a corporation, regardless of the place where the corporation was incorporated, if the corporation’s property, payroll, and sales factors in the United States average 20 percent or more;
    5. a corporation that is incorporated in or does business in a country that does not impose an income tax, or that imposes an income tax at a rate lower than 90 percent of the United States income tax rate on the income tax base of the corporation in the United States, if
      1. 50 percent or more of the sales, purchases, or payments of income or expenses, exclusive of payments for intangible property, of the corporation are made directly or indirectly to one or more members of a group of corporations filing under the water’s edge combined reporting method;
      2. the corporation does not conduct significant economic activity.
  2. When computing taxable income for a corporation under (a) of this section, the following amounts shall be excluded:
    1. 80 percent of dividend income received from foreign corporations;
    2. an amount treated as a dividend under 26 U.S.C. 78;
    3. 80 percent of the royalties accrued or received from a foreign corporation.
  3. In (b)(1) and (3) of this section, a payment is considered to be received from a corporation that is part of the unitary business if the payment is received
    1. by a member of an affiliated group included in a water’s edge combined report filed under this section; and
    2. from a corporation in which the recipient owns 50 percent or more of the stock of the corporation.
  4. Dividends and royalties taxable to a corporation using the water’s edge combined reporting method are in lieu of an expense attribution for income excluded under (b) of this section.
  5. The department may require a corporation that files under (a) of this section to file a report under AS 43.20.142 and 43.20.143 prepared without regard to this section if the corporation or an affiliated corporation
    1. fails to comply with regulations adopted under this chapter, including domestic disclosure spread sheet filing requirements; or
    2. does not provide information that is requested by the department that is necessary for the department to audit the taxpayer’s corporate return in a reasonable period of time.
  6. This section does not apply to taxpayers subject to AS 43.20.144 engaged in
    1. the production of oil or gas from a lease or property in the state; or
    2. the transportation of oil or gas by regulated pipeline in the state.
  7. A corporation that has signed a contract approved by the legislature as a result of submission of a proposed contract developed under AS 43.82 or as a result of acts by the legislature in implementing the purposes of AS 43.82, providing for payments in lieu of the tax under this chapter and that has nexus with the state solely as the result of the corporation’s participation in the approved qualified project that is subject to the contract is not required to file a return under this section unless required to do so by the contract.
  8. In this section,
    1. “affiliated corporation” means a member of an affiliated group to which the taxpayer filing a return under (a) of this section belongs;
    2. “affiliated group” means a group of two or more corporations in which 50 percent or more of the voting stock of each member of the group is directly or indirectly owned by one or more corporate or noncorporate common owners, or by one or more of the members of the group;
    3. “foreign corporation” means a corporation created or organized outside of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a possession of the United States;
    4. “water’s edge combined reporting method” means a reporting method in which the only corporations besides the taxpayer that may be included in the return are the corporations listed in (a) of this section.

History. (§ 3 ch 11 SLA 1991; am § 9 ch 104 SLA 1998)

Revisor’s notes. —

Formerly AS 43.20.073 . Renumbered in 2012, at which time “AS 43.20.142 and 43.20.143 ” was substituted for “AS 43.20.065 43.20.071 ” in subsection (e) and “AS 43.20.144 ” was substituted for “AS 43.20.072 ” in subsection (f) to reflect the renumbering of AS 43.20.065 , 43.20.071 , and 43.20.072 .

Subsection (g) was enacted as (h). Relettered in 1998, at which time former subsection (g) was relettered as (h).

Cross references. —

For legislative purpose and intent in enacting this section, see §§ 1, 2, ch. 11, SLA 1991 in the Temporary and Special Acts.

For findings, intent, and nonseverability provisions related to the enactment of subsection (g), see §§ 1, 2, and 10, ch. 104, SLA 1998 in the 1998 Temporary and Special Acts.

Administrative Code. —

For special rules: water transportation carriers, see 15 AAC 19, art. 11.

For corporate net income tax; administration and credits, see 15 AAC 20, art. 2.

For corporate net income tax; combination and apportionment rules, see 15 AAC 20, art. 3.

For corporate net income tax; special rules for oil and gas corporations, see 15 AAC 20, art. 4.

Sec. 43.20.146. Public utilities.

Notwithstanding sec. 2, art. IV, of AS 43.19 (Multistate Tax Compact), and unless otherwise provided under AS 43.20.143 43.20.145 , a taxpayer that is a public utility shall allocate and apportion income in accordance with the remainder of art. IV of AS 43.19 (Multistate Tax Compact).

History. (§ 1 ch 55 SLA 2018)

Cross references. —

For provision providing that this section “does not apply to a taxpayer that files a return under AS 43.20 for a taxable year” that commences before January 1, 2019, see sec. 2, ch. 55, SLA 2018, in the 2018 Temporary and Special Acts.

Effective dates. —

Section 5, ch. 55, SLA 2018 makes this section effective January 1, 2019.

Sec. 43.20.150. Definitions. [Repealed, § 45 ch 113 SLA 1980.]

Article 3. Administration.

Collateral references. —

71 Am. Jur. 2d, State and Local Taxation, §§ 358et seq., 501-511.

81A C.J.S., States, §§ 245-248.

Sec. 43.20.160. Administration.

  1. The department shall administer this chapter.
  2. [Repealed, § 45 ch 113 SLA 1980.]
  3. The department shall prescribe and furnish all necessary forms, and adopt and publish all necessary regulations in plain and concise language conformable with this chapter for the assessment and collection of the taxes imposed by this chapter.  The department shall apply as far as practicable the administrative and judicial interpretations of the federal income tax law.  The department shall also prepare a concise statement of the contents of the code sections referred to in this chapter for the information of the taxpayer and make them available to the taxpayer making a return.
  4. All money collected by the department under this chapter shall be deposited in the general fund of the state.
  5. [Repealed, § 10 ch 1 SSSLA 1980.]

History. (§ 14 ch 115 SLA 1949; am § 1 ch 60 SLA 1979; am § 10 ch 1 SSSLA 1980; am § 9 ch 2 SSSLA 1980; am § 45 ch 113 SLA 1980)

Cross references. —

For present provisions concerning a taxpayer’s failure to file a timely return, see AS 43.05.245 .

Administrative Code. —

For corporate net income tax; special rules for financial organizations and, see 15 AAC 20, art. 6.

Notes to Decisions

Applied in

Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006).

Quoted in

Wien Air Alaska, Inc. v. State, Dep't of Revenue, 647 P.2d 1087 (Alaska 1982); Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988); Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Sec. 43.20.170. Collection of income tax at source. [Repealed, § 11 ch 1 SSSLA 1980.]

Sec. 43.20.172. Information required of fish processors and buyers. [Repealed, § 16 ch 82 SLA 1982.]

Sec. 43.20.173. Collection of income tax at source for fish and fish products. [Repealed, § 1 ch 28 SLA 1965.]

Sec. 43.20.180. Credits against tax. [Repealed, § 10 ch 1 SSSLA 1980.]

Sec. 43.20.190. Publicity. [Repealed, § 3 ch 166 SLA 1976. For law on disclosure of tax returns and reports, see AS 43.05.230.]

Sec. 43.20.200. Review and assessment.

  1. As soon as practicable after a return is filed, the department may examine it and determine the correct amount of the tax. If an error is disclosed by the examination, the department shall so notify the taxpayer by first-class mail.  The taxpayer may petition for redetermination of deficiency as provided in AS 43.05.240 .
  2. The same period of limitation upon the assessment and collection of taxes imposed under this chapter and the same exceptions to it shall apply as provided in 26 U.S.C. 6501 — 6503 (Internal Revenue Code).  In the case of additional tax due by reason of a modification, recomputation, or determination of deficiency in a taxpayer’s federal income tax return, the period of limitation on assessment commences from the date that the notice required in AS 43.20.030(d) is filed, and if no notice is filed the tax may be assessed at any time.

History. (§ 10 ch 115 SLA 1949; am § 10 ch 70 SLA 1975; am § 26 ch 113 SLA 1980; am § 4 ch 68 SLA 1987)

Opinions of attorney general. —

Alaska law does not specifically provide for a method of assessment nor have any regulations been published concerning assessment. 1963 Alas. Op. Att'y Gen. No. 33.

When used in connection with taxation, “assessment” is a process that fixes the liability of the taxpayer and ascertains the facts and furnishes the data for the proper preparation of the tax rolls. 1963 Alas. Op. Att'y Gen. No. 33.

The Department of Revenue has established an internal administrative procedure for determining tax liability. This procedure constitutes an “assessment” under the applicable general law, even though that procedure is not set out in the Income Tax Act or regulations promulgated by the Department of Revenue. 1963 Alas. Op. Att'y Gen. No. 33.

“Assessment” is strictly an administrative determination that the person is indebted to the state for taxes due. It is an official estimate, as determined from the return. 1963 Alas. Op. Att'y Gen. No. 33.

The term “assessment” does not contemplate any billing or notice to the taxpayer. 1963 Alas. Op. Att'y Gen. No. 33.

The date of assessment in Alaska is the date that the Department of Revenue, in the course of its normal administrative procedure, makes final the amount on which the attempt to collect the tax will be based. It is the date the final amount of tax liability from which billing is to be made is listed on the tax ledger card. 1963 Alas. Op. Att'y Gen. No. 33.

Under no interpretation can the date of billing be considered the date of assessment. 1963 Alas. Op. Att'y Gen. No. 33.

Under §§ 6501, 6502(a) and 6503(a) of the Internal Revenue Code of 1954, the assessment must be made within three years of filing date of the return and collection procedures must be started six years [now 10 years] after the date of the assessment. 1963 Alas. Op. Att'y Gen. No. 33.

If the tax liability is placed on the ledger card within three years from the date of the filing of the return, collection of the tax is not barred by the statute of limitations. 1963 Alas. Op. Att'y Gen. No. 33.

Notes to Decisions

The basic scheme of this chapter is to make the state’s claim for income taxes contingent upon the establishment of liability for federal income taxes. Hickel v. Stevenson, 416 P.2d 236 (Alaska 1966).

Effect of taxpayer’s waiver of federal period of limitation. —

By reason of the express adoption of the provisions of the Internal Revenue Code relating to an exception to the three-year period of limitation, (Sec. 6501(a)a of the Internal Revenue Code of 1954) the effect of a taxpayer’s waiver of the federal period of limitation for assessment and collection of taxes is to effect a like waiver of such period as to the assessment and collection of Alaska taxes. Hickel v. Stevenson, 416 P.2d 236 (Alaska 1966).

If the extension of the period for assessment under federal law did not effect a like extension under this chapter, it would mean that any Alaska tax based on an additional assessment of federal tax after three years from the date of filing a return would not be collectible because of the three-year period of limitation, unless the state tax officials audited the taxpayer’s federal returns within the three-year period to ascertain whether the federal computation of tax was correct. Such an interpretation would be contrary to the prime objective of this chapter which was aimed at convenience to the taxpayer and simplicity of administration. Hickel v. Stevenson, 416 P.2d 236 (Alaska 1966).

The provisions of AS 43.05.260 and AS 43.05.275 regarding the statute of limitations and written agreement to extend that statute do not eliminate the first sentence of subsection (b) of this section, which incorporates specific IRC sections concerning extension of the limitations period for assessment. The references to the IRC contained in this section and AS 43.20.021 make waiver agreements between the IRS and the taxpayer effective for the purpose of extending the state statute of limitations. Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Restricted federal waivers and state statute of limitations. —

A restricted waiver is only effective for state adjustments that are reasonably related to the issues covered by the restricted federal waiver; therefore, a restricted federal waiver extends the state statute of limitations only so far as the issues covered in the restricted waiver would affect state tax liability. Louisiana-Pacific Corp. v. Dep't of Revenue, 21 P.3d 1274 (Alaska 2001).

Taxpayers estopped from asserting statute of limitations. —

The failure of certain taxpayers to notify the department of the modification in their federal income tax liability for two years constitutes a breach of the duty to give notice of modification pursuant to AS 43.20.030 and amounts to the concealment of a material fact. Where the state, to its detriment, relying on that lack of notice, as it reasonably could, failed to institute the statutory mechanism for collection of additional taxes, the taxpayers are estopped from asserting the protection of the statute of limitations embodied in subsection (b) of this section. Stevenson v. Burgess, 570 P.2d 728 (Alaska 1977).

Sec. 43.20.210. Additional penalty tax. [Repealed, § 3 ch 166 SLA 1976. For civil penalty, see AS 43.05.220.]

Sec. 43.20.215. Penalty for late payment of refund. [Repealed, § 10 ch 1 SSSLA 1980.]

Article 4. Enforcement.

Collateral references. —

71 Am. Jur. 2d, State and Local Taxation, §§ 504-511

72 Am. Jur. 2d, State and Local Taxation, §§ 754-793.

85 C.J.S., Taxation, §§ 1926-1929.

Constitutional provision against imprisonment for debt as applicable to nonpayment of tax. 48 ALR3d 1324.

Sec. 43.20.220. Enforcement. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.10.032.]

Sec. 43.20.230. Lien. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.10.035.]

Sec. 43.20.240. Recording lien and certificate of discharge. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.10.042.]

Sec. 43.20.250. Action to enforce lien.

In a case where there is a refusal or neglect to pay a tax, including interest, penalty, additional amount, or addition to the tax, together with additional costs that accrue, the attorney general, at the request of the department may file an action in the superior court to enforce the lien of the state for the tax upon property and rights to property, real or personal, or to subject the property and rights to property owned by the delinquent, or in which the delinquent has a right, title, or interest to the payment of the tax. The action shall be commenced and pursued in the manner provided for the foreclosure of liens in AS 09.45.170 09.45.220 , which are applicable to tax liens arising under this chapter to the extent that the provisions are not inconsistent with other provisions of this chapter. The action may be started at any time within six years after the lien arises.

History. (§ 12 B(4) ch 115 SLA 1949; added by § 3 ch 132 SLA 1951)

Sec. 43.20.260. Suspension of licenses. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.10.045.]

Sec. 43.20.270. Distraint on property.

  1. The department may collect taxes, with interest, penalties, and other additional amounts permitted by law, by distraint and sale, in the manner provided in this section, of the property of a person liable to pay the taxes, interest, penalties, or other additional amounts, who neglects or refuses to pay them within 10 days from the mailing of notice and demand for payment of them, and who has not appealed from the assessment of the taxes, interest, penalties, and other additional amounts determined under AS 43.05.240 or following appeal taken under AS 43.05.241 or 43.05.242 .
  2. Notwithstanding the provisions of AS 09.38 or any other provision of law exempting property from execution, only the following property, if it belongs to the head of a family, is exempt from distraint and sale under this chapter:
    1. the schoolbooks and wearing apparel necessary for the family;
    2. arms for personal use;
    3. one cow, two hogs, five sheep and their wool, but the aggregate market value of the sheep may not exceed $50;
    4. the necessary food for the exempt cow, hogs, and sheep, for not more than 30 days;
    5. fuel to an amount not greater than $25;
    6. provisions to an amount not greater than $50;
    7. household furniture kept for use to an amount not greater than $300; and
    8. the books, tools, or implements of a trade or profession, to an amount not greater than $100.
  3. In case of neglect or refusal to pay taxes or deficiencies as provided in this chapter, the department may levy, or, by warrant issued by it, authorize a deputy or agent to levy upon, seize and sell all property, except exempt property belonging to the person, for the payment of the amount due, with interest and penalty for nonpayment, and also of a further amount sufficient for the fees, costs, and expenses of the levy.
  4. When distraint is made, as provided in this section,
    1. the deputy or agent charged with the collection shall make or have made an account of the property distrained, a copy of which, signed by the deputy or agent making the distraint, shall be left with the owner or possessor of the property, or at the dwelling or usual place of business of the owner or possessor, with a person of suitable age and discretion, if a person of suitable age and discretion can be found, or, if the taxpayer is a corporation, with an officer, manager, general agent, or agent for process, with a note of the amount demanded and the time and place of sale;
    2. the deputy or agent shall immediately publish a notice of the time and place of sale, together with a description of the property distrained, in a newspaper within the judicial district in which the distraint is made, and, in the discretion of the department, have the notice publicly posted in three public places within five miles of the place where the sale is to be held; and
    3. the time of sale may not be less than 10 nor more than 60 days from the date of the notification to the owner or possessor of the property, and the place proposed for the sale may not be more than five miles from the place of making the distraint; the sale may be adjourned from time to time by the deputy or agent, if the deputy or agent considers it advisable, but not for more than 90 days in all.
  5. When property is advertised for sale under distraint, the deputy or agent making the seizure shall proceed to sell the property at public auction, offering the property at not less than a fair minimum price, including the expenses of making the seizure and of advertising the sale, and if the amount bid for the property at the sale is not equal to the fair minimum price so fixed, the agent or deputy conducting the sale may declare the property to be purchased by the agent or deputy for the state. The property so purchased may be sold by the deputy or agent under regulations prescribed by the department.
  6. The property distrained shall be restored to the owner or possessor if, before the sale, payment of the amount due is made to the deputy or agent charged with the collection, together with the fees and other charges; but in case of nonpayment, the deputy or agent shall proceed to sell the property at public auction.  The owner of real property sold under this section, the owner’s heir, executor, or administrator, or a person in behalf of the owner may redeem the property sold or a particular tract of the property at any time within 120 days after the sale of the property or tract. The property or tract may be redeemed upon payment to the purchaser or, if the purchaser cannot be found in the state, then to the commissioner of revenue for the use of the purchaser, the purchaser’s heirs, or assigns, the amount paid by the purchaser and interest on it at the rate of 12 percent a year.  If land sold is redeemed under this subsection, the commissioner shall cause entry of the fact to be made upon the record mentioned in (g)(6) of this section and the entry shall be evidence of such redemption.
  7. The following provisions apply to sale of property under this section.
    1. In the case of property sold under this section, the deputy or agent conducting the sale shall give to the purchaser a certificate of sale upon payment in full of the purchase price. In the case of real property, the certificate shall set out the real property purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid for it.
    2. In the case of real property sold under this section and not redeemed in the manner and within the time provided in (f) of this section, the commissioner shall execute to the purchaser of the real property at the sale a deed of the real property so purchased, reciting the facts set out in the certificate.
    3. If real property is declared purchased by the deputy or agent for the state at a sale under (e) of this section, the deputy or agent shall at the proper time execute a deed for it after its preparation and the endorsement of approval as to its form by the attorney general and, without delay, cause the deed to be duly recorded in the proper registry of deeds.
    4. In all cases of sale of property under this section other than real property, the certificate of sale
      1. is prima facie evidence of the right of the deputy or agent to make the sale, and conclusive evidence of the regularity of the proceedings in making the sale;
      2. transfers to the purchaser all right, title, and interest of the delinquent in and to the property sold;
      3. where the property consists of stock, is notice, when received, to a corporation, company, or association of the transfer, and is authority to the corporation, company, or association to record the transfer on their books and records in the same manner as if the stock was transferred or assigned by the party holding the stock in lieu of an original or prior certificate, which is void, whether cancelled or not; and
      4. where the subject of sale is security or other evidence of debt, is a good and valid receipt to the person holding it, as against a person holding or claiming to hold possession of the security or other evidence of debt.
    5. In the case of the sale of real property under this section
      1. the deed of sale given under (2) of this subsection is prima facie evidence of the facts stated in it; and
      2. if the proceedings of the commissioner or a deputy or agent of the commissioner as set out have been substantially in accordance with the provisions of law, the deed is considered and operates as a conveyance of all the right, title, and interest the party delinquent had in and to the real property thus sold at the time the lien of the state attached to it.
    6. The commissioner or a deputy or agent of the commissioner shall keep a record of all sales of real property under this section and of redemption of the property.  The record shall set out the tax for which the sale was made, the date of seizure and sale, the name of the party assessed and all proceedings in making the sale, the amount of expenses, the names of the purchasers, and the date of the deed.  A copy of the record or a part of it certified by the commissioner is evidence in any court of the truth of the facts stated in it.
  8. When property liable to distraint for taxes is not divisible, so as to enable the department by sale of a part of it to raise the whole amount of the tax or deficiency, with all costs and charges, the whole of the property shall be sold, and the surplus of the proceeds of the sale, after making allowance for the amount of the tax or deficiency, interest, penalties, and additions to it and for the costs and charges of the distraint and sale, shall be surrendered to the owner of the property.
  9. If property seized and sold under this section is not sufficient to satisfy the claim of the state for which distraint or seizure is made, the deputy or agent may, thereafter, and as often as is necessary, proceed to seize and sell in like manner any other property liable to seizure of the taxpayer against whom the claim exists until the amount due from the taxpayer, together with all expenses, is fully paid.
  10. A person in possession of property, or rights to property, which is subject to distraint, upon which a levy is made, shall, upon demand by the deputy or agent making the levy, surrender the property or rights to the deputy or agent, unless the property or right is, at the time of the demand, subject to an attachment under judicial process.  A person who fails or refuses to so surrender the property or rights is personally liable to the state in a sum equal to the value of the property or rights not so surrendered, but not exceeding the amount of the taxes or deficiencies, including penalties, and interest, for the collection of which levy is made, together with costs and interest from the date of the levy.
  11. All persons shall, on demand of an agent or deputy about to distrain or having distrained on property, or rights of property, exhibit all books containing evidence or statements relating to the subject of distraint, or the property or rights of property liable to distraint for the tax due.
  12. The department shall by regulation determine the fees and charges to be allowed in cases of distraint, and may determine whether an expense incurred in making a distraint or seizure is necessary.
  13. The period of limitation upon distraint is the same as provided under 26 U.S.C. 6501(c), 6502(a), and 6503(a) (Internal Revenue Code).  In determining the running of a period of limitation in respect of distraint, the distraint is considered to begin when the levy upon property is made.
  14. The provisions of this chapter are not exclusive but are in addition to all other existing remedies provided by law for the enforcement of the revenue laws of the state.
  15. The department may be made a party defendant in an action by a person aggrieved by the unlawful seizure or sale of the person’s property, but only the state is responsible for a final money judgment secured against the department, and the judgment shall be satisfied out of the general fund of the state treasury.
  16. The department shall adopt and publish all necessary regulations for the enforcement of this section.
  17. In this section “person” includes an officer or employee of a corporation or a member or employee of a partnership, who as an officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.

History. (§ 12D ch 115 SLA 1949; added by § 3 ch 132 SLA 1951; am § 1 ch 58 SLA 1959; am §§ 1 — 3 ch 115 SLA 1962; am § 27 ch 113 SLA 1980; am § 116 ch 6 SLA 1984; am § 5 ch 68 SLA 1987; am § 14 ch 108 SLA 1996; am § 4 ch 4 SLA 2012)

Cross references. —

For applicability of distraint on property to all state revenue statutes enacted for the collection of taxes and license fees, see AS 43.10.030 .

Opinions of attorney general. —

The department cannot use the distraint on property procedures when a taxpayer has appealed an assessment under AS 43.05.240 . December 7, 1984 Op. Att’y Gen.

Notes to Decisions

Qualifying as taxpayer under duress. —

One need not incur the risk of penalties, while the validity of the tax is being ascertained judicially, in order to qualify as a taxpayer under duress. State v. Wakefield Fisheries, 495 P.2d 166 (Alaska 1972), overruled, Principal Mut. Life Ins. Co. v. State, Div. of Ins., 780 P.2d 1023 (Alaska 1989).

Sec. 43.20.275. Definitions for AS 43.20.250 — 43.20.270.

In AS 43.20.250 43.20.270 ,

  1. “property” means all property, real and personal, tangible and intangible, a right, title, or interest to property, and, without limitation, stocks, securities, bank accounts, and evidences of debt;
  2. “taxes” includes deficiencies in respect to the taxes.

History. (§ 12D ch 115 SLA 1949; added by § 3 ch 132 SLA 1951; am § 1 ch 58 SLA 1959; am §§ 1 — 3 ch 115 SLA 1962)

Revisor’s notes. —

Formerly AS 43.20.270(r). Renumbered in 2012.

Article 5. General Provisions.

Sec. 43.20.280. Taxpayers’ remedies. [Repealed, § 3 ch 166 SLA 1976. For current law, see AS 43.05.240.]

Sec. 43.20.290. Exclusive state authority.

No tax may be levied and collected upon the net income of resident or nonresident individuals by a general law city or by a home rule city or any other political subdivision of the state.

History. (§ 1 ch 107 SLA 1961)

Sec. 43.20.300. References to Internal Revenue Code.

  1. The provisions of the Internal Revenue Code as now in effect or hereafter amended mentioned in this chapter are incorporated in this chapter by reference and have effect as though fully set out in this chapter.
  2. When portions of the Internal Revenue Code incorporated by reference as provided in (a) of this section refer to rules and regulations adopted by the United States Commissioner of Internal Revenue, or hereafter adopted, they are regarded as regulations adopted by the department under and in accord with the provisions of this chapter, unless and until the department adopts specific regulations in place of them conformable with this chapter.

History. (§ 3 B ch 115 SLA 1949)

Notes to Decisions

Incorporation of federal law by reference. —

The right to incorporate by reference provisions of the federal law cannot be questioned. Alaska S.S. Co. v. Mullaney, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

The effort of the Alaska legislature to make its income tax machinery conform to the federal act, and to preserve and continue such uniformity, makes for convenience to the taxpayer and for simplicity of administration. Alaska S.S. Co. v. Mullaney, 180 F.2d 805, 12 Alaska 594 (9th Cir. Alaska 1950).

Applied in

Department of Revenue v. Gibson, 544 P.2d 851 (Alaska 1975); Stevenson v. Burgess, 570 P.2d 728 (Alaska 1977); Northwest Med. Imaging, Inc. v. Dep't of Revenue, 151 P.3d 434 (Alaska 2006).

Quoted in

Wien Air Alaska, Inc. v. State, Dep't of Revenue, 647 P.2d 1087 (Alaska 1982); Gulf Oil Corp. v. State, Dep't of Revenue, 755 P.2d 372 (Alaska 1988).

Secs. 43.20.310, 43.20.320. Taxable years to which applicable; arrangement and classification. [Repealed, § 62 ch 21 SLA 1991.]

Sec. 43.20.330. Penalties. [Repealed, § 3 ch 169 SLA 1972.]

Sec. 43.20.335. Penalties. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.220 and 43.05.290.]

Sec. 43.20.340. Definitions.

In this chapter,

  1. “bank” means a financial institution including a national banking association;
  2. “corporation” includes an association, joint-stock company, and an insurance company;
  3. “fiscal year” means an accounting period of 12 months ending on the last day of a month other than December;
  4. “includes” and “including” when used in a definition do not exclude other things otherwise within the meaning of the word defined;
  5. “Internal Revenue Code” means the Internal Revenue Code of the United States (26 U.S.C.) as the code exists now or as hereafter amended, as the code and amendments apply to the normal taxes and surtax on net incomes, which amendments are operative for the purposes of this chapter as of the time they became operative or will become operative under federal law;
  6. “part-year resident” means an individual who enters or leaves the state during the taxable year and who has resided or was domiciled in the state for a period of less than 12 months during the taxable year;
  7. “person” means an individual, a trust or estate, or partnership, or a corporation;
  8. “taxable year” means the calendar year or the fiscal year ending during the calendar year upon the basis of which the net income is computed under this chapter; “taxable year” includes, in the case of a return made for a fractional part of a year under this chapter, the period for which the return is made;
  9. “taxpayer” means a person subject to a tax imposed by this chapter;
  10. “trade or business” includes the engaging in or carrying on of a trade, business, profession, vocation, employment, and rendition of services or commercial activity and includes the performance of the function of a public office.

History. (§ 3 A ch 115 SLA 1949; am § 1 ch 128 SLA 1951; am § 1 ch 5 SLA 1953; am § 12 ch 70 SLA 1975; am § 11 ch 1 SSSLA 1980; am § 6 ch 68 SLA 1987; am § 38 ch 168 SLA 1990)

Revisor’s notes. —

The paragraphs were reorganized in 1983 to alphabetize the defined terms and in 2012 to conform to the repeal of former paragraph (3).

Sec. 43.20.350. Short title.

This chapter may be cited as the Alaska Net Income Tax Act.

History. (§ 1 ch 115 SLA 1949)

Chapter 21. Oil and Gas Corporate Income Tax.

[Repealed, § 19 ch 116 SLA 1981.]

Chapter 23. Permanent Fund Dividends.

Revisor’s notes. —

Chapter 99, SLA 1985 established, subject to a contingency requiring legislative action, an annuity program funded by permanent fund dividends. The contingency was never satisfied and the sections establishing the proposed annuity program were repealed by § 17, ch. 20, SLA 2002.

Cross references. —

For provisions relating to the Permanent Fund Corporation, see AS 37.13.

Administrative Code. —

For permanent fund dividend distribution, see 7 AAC 38.

For Alaska permanent fund dividend, see 15 AAC 23.

Opinions of attorney general. —

If the legislature enacts any other distribution program which is consistent with the intent of the permanent fund dividend law (AS 43.23), any appropriation to implement that program will be exempt from the appropriation limit of § 16, art. IX, of the state constitution. 1983 Alas. Op. Att'y Gen. No. 01.

The Alaska Permanent Fund, as currently constituted, should not be subject to federal income tax because it is an asset of the State of Alaska and its income is earned directly by the State of Alaska or, in the alternative, because it is an integral part of the State of Alaska. Further, the Alaska Permanent Fund Corporation, as currently constituted, should not be subject to federal income tax because it is an integral part of the State of Alaska or, in the alternative, because its income, if any, is excluded from federal income tax under Section 115(1) of the Internal Revenue Code (the “Code”). In addition, the adoption of constitutional amendments incorporating into the Constitution a requirement for payment of the permanent fund dividend and a requirement that a portion of Fund earnings be used to defray the State’s obligations to fund public education should not change the federal tax status of the Fund or the Corporation. 2003 Alas. Op. Att'y Gen. No. 12.

Notes to Decisions

Statutory scheme of former AS 43.23.010 held unconstitutional. —

The statutory scheme under former AS 43.23.010 , by which the state distributes income derived from its natural resources to the adult citizens of the state in varying amounts, based on the length of each citizen’s residence, violated the equal protection rights of newer state citizens. Zobel v. Williams, 457 U.S. 55, 102 S. Ct. 2309, 72 L. Ed. 2d 672 (U.S. 1982).

The state objectives of creating a financial incentive for individuals to establish and maintain Alaska residence, and assuring prudent management of the Permanent Fund and the state’s natural and mineral resources are not rationally related to the distinctions Alaska seeks to make in the dividend program between newer residents and those who have been in the state since 1959. Zobel v. Williams, 457 U.S. 55, 102 S. Ct. 2309, 72 L. Ed. 2d 672 (U.S. 1982).

Objective to reward citizens for past contributions is not a legitimate state purpose since this reasoning could open the door to state apportionment of other rights, benefits and services according to length of residency and would permit the states to divide citizens into expanding numbers of permanent classes, a result which would be clearly impermissible. Zobel v. Williams, 457 U.S. 55, 102 S. Ct. 2309, 72 L. Ed. 2d 672 (U.S. 1982).

This statute does not impose any threshold warning period on those seeking dividend benefits; persons with less than a full year of residency are entitled to share in the distribution. Nor does the statute purport to establish a test of the bona fides of state residence. Instead, the dividend statute creates fixed, permanent distinctions between an ever increasing number of perpetual classes of concededly bona fide residents, based on how long they have been in the state. Zobel v. Williams, 457 U.S. 55, 102 S. Ct. 2309, 72 L. Ed. 2d 672 (U.S. 1982).

Permanent fund dividend payments were made for “public purpose” within the meaning of Alaska Const., Art. IX, § 6. Beattie ex rel. Beattie v. United States, 635 F. Supp. 481 (D. Alaska 1986), aff'd, 831 F.2d 916 (9th Cir. Alaska 1987).

Permanent fund dividend payments subject to federal income tax. —

Permanent Fund dividend payments are income and, since these payments are not excludable from gross income as “gifts”, they are therefore subject to the federal income tax. Beattie ex rel. Beattie v. United States, 635 F. Supp. 481 (D. Alaska 1986), aff'd, 831 F.2d 916 (9th Cir. Alaska 1987).

Payments received under Alaska’s Permanent Fund Dividend Program are subject to federal income tax. Greisen ex rel. Greisen v. United States, 831 F.2d 916 (9th Cir. Alaska 1987), cert. denied, 485 U.S. 1006, 108 S. Ct. 1469, 99 L. Ed. 2d 699 (U.S. 1988).

Property of bankruptcy estate. —

Debtor’s permanent fund dividend, sent to IRS by the State of Alaska, is the property of the bankruptcy estate and subject to turnover by the IRS pursuant to 11 U.S.C. §§ 541 and 542. Interest of IRS in permanent fund dividend was no greater than that of any other levying creditor. If levy is valid, IRS holds a perfected lien against debtor’s permanent fund dividend. Camacho v. United States (In re Camacho), 177 B.R. 667 (Bankr. D. Alaska 1994).

Article 1. Eligibility; Application; Determination of Dividend.

Sec. 43.23.005. Eligibility.

  1. An individual is eligible to receive one permanent fund dividend each year in an amount to be determined under  AS 43.23.025 if the individual
    1. applies to the department;
    2. is a state resident on the date of application;
    3. was a state resident during the entire qualifying year;
    4. has been physically present in the state for at least 72 consecutive hours at some time during the prior two years before the current dividend year;
    5. is
      1. a citizen of the United States;
      2. an alien lawfully admitted for permanent residence in the United States;
      3. an alien with refugee status under federal law; or
      4. an alien that has been granted asylum under federal law;
    6. was, at all times during the qualifying year, physically present in the state or, if absent, was absent only as allowed in  AS 43.23.008 ; and
    7. was in compliance during the qualifying year with the military selective service registration requirements imposed under  50 U.S.C. App. 453 (Military Selective Service Act), if those requirements were applicable to the individual, or has come into compliance after being notified of the lack of compliance.
  2. [Repealed, § 18 ch 4 SLA 1992.]
  3. A parent, guardian, or other authorized representative may claim a permanent fund dividend on behalf of an unemancipated minor or on behalf of a disabled or an incompetent individual who is eligible to receive a payment under this section. Notwithstanding (a)(2) — (4) of this section, a minor is eligible for a dividend if, during the two calendar years immediately preceding the current dividend year, the minor was born to or adopted by an individual who is eligible for a dividend for the current dividend year.
  4. Notwithstanding the provisions of (a) — (c) of this section, an individual is not eligible for a permanent fund dividend for a dividend year when
    1. during the qualifying year, the individual was sentenced as a result of conviction in this state of a felony;
    2. during all or part of the qualifying year, the individual was incarcerated as a result of the conviction in this state of a
      1. felony; or
      2. misdemeanor if the individual has been convicted of
        1. a prior felony as defined in  AS 11.81.900 ; or
        2. two or more prior misdemeanors as defined in  AS 11.81.900 .
  5. [Repealed, § 62 ch 21 SLA 1991.]
  6. The commissioner may waive the requirement of (a)(4) of this section for an individual absent from the state
    1. in a time of national military emergency under military orders while serving in the armed forces of the United States, or for the spouse and dependents of that individual; or
    2. while in the custody of the Department of Health and Social Services in accordance with a court order under  AS 47.10 or  AS 47.12 and placed outside of the state by the Department of Health and Social Services for purposes of medical or behavioral treatment.
  7. For purposes of applying (d)(1) of this section, the date the court imposes a sentence or suspends the imposition of sentence shall be treated as the date of conviction. For purposes of applying (d)(2)(B) of this section, multiple convictions arising out of a single criminal episode shall be treated as a single conviction.
  8. If an individual who would otherwise have been eligible for a permanent fund dividend dies after applying for the dividend but before the dividend is paid, the department shall pay the dividend to a personal representative of the estate or to a successor claiming personal property under  AS 13.16.680 . If an individual who would otherwise have been eligible for a dividend and who did not apply for the dividend dies during the application period, a personal representative of the estate or a successor claiming personal property under  AS 13.16.680 may apply for and receive the dividend. If an individual who received a dividend for the year immediately before the qualifying year and who would otherwise have been eligible for a dividend dies during the qualifying year after having been a state resident for at least 180 days immediately before the date of death, notwithstanding (a)(1) — (3) and (a)(6) of this section, a personal representative of the estate or a successor claiming personal property under  AS 13.16.680 may apply for and receive the dividend. Notwithstanding  AS 43.23.011 , an application for a dividend may be filed by the personal representative or the successor under this subsection at any time before the end of the application period for the next dividend year.

History. (§ 1 ch 102 SLA 1982; am § 1 ch 57 SLA 1987; am § 1 ch 54 SLA 1988; am § 1 ch 159 SLA 1988; am §§ 2, 3 ch 107 SLA 1989; am § 1 ch 68 SLA 1990; am §§ 46, 62 ch 21 SLA 1991; am § 1 ch 68 SLA 1991; am §§ 4 — 8, 18 ch 4 SLA 1992; am §§ 2, 3 ch 46 SLA 1996; am §§ 2 — 4 ch 44 SLA 1998; am § 1 ch 91 SLA 1998; am § 25 ch 92 SLA 2001; am § 5 ch 89 SLA 2002; am § 5 ch 64 SLA 2005; am § 1 ch 22 SLA 2010)

Cross references. —

For a temporary provision relating to eligibility and allowable absences during the novel coronavirus disease (COVID-19) public health disaster emergency declared by the governor on March 11, 2020, see § 16, ch. 10, SLA 2020 in the 2020 Temporary and Special Acts.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Editor’s notes. —

Section 6, ch. 46, SLA 1996 provides that the 1996 amendments that amended subsection (d) and added (g) “apply only to individuals convicted of crimes committed after December 31, 1996” and that “[c]onvictions for crimes committed before January 1, 1997, may not be considered in determining the number of prior convictions for purposes of applying AS 43.23.005(d)(2)(B) .”

Legislative history reports. —

For legislative letter of intent relating to the enactment of subsection (f) by § 1 ch. 68, SLA 1991 (HCS CSSB 98(FIN)), see 1991 Senate Journal, pages 256, 257.

Notes to Decisions

Constitutionality. —

The 1989 amendment to paragraph (a)(2) of this section, imposing a two-year residency requirement for applicants, was unconstitutional; the one year requirement in subsection (e) is the applicable period, since no appeal is pending. Lindly, et al. v. Malone, Superior Court, 3rd Jud. Dist., 3AN-90-02586 CI (1990) (The 1991 amendment codified this decision.).

Subsection (d) does not violate the equal protection clause of the United States Constitution and/or the Alaska Constitution. State v. Anthony, 810 P.2d 155 (Alaska 1991).

Subsection (d), which makes incarcerated felons ineligible for permanent fund dividends, does not violate the ex post facto clause of either the United States or the Alaska Constitutions. State v. Anthony, 816 P.2d 1377 (Alaska 1991).

Denial of a permanent fund dividend to an incarcerated felon was not a separate punishment in addition to his sentence for murder for purposes of double jeopardy. Hertz v. Storer, 943 P.2d 725 (Alaska 1997), cert. denied, 522 U.S. 1059, 118 S. Ct. 717, 139 L. Ed. 2d 657 (U.S. 1998).

The alien eligibility requirement of subparagraph (a)(5)(B) is constitutional because the department has the authority to interpret the statutory language in a manner that meets the purposes of the permanent fund dividend program and that comports with federal law. Dep't of Revenue v. Andrade, 23 P.3d 58 (Alaska 2001).

No constitutional protection of permanent fund dividend. —

Changes in the qualifying date for a permanent fund dividend (PFD) do not violate the constitutional rights of new residents. Plaintiffs, as new residents, had only an inchoate expectancy of a PFD which is not afforded constitutional protection. Underwood v. State, 881 P.2d 322 (Alaska 1994), cert. denied, 514 U.S. 1064, 115 S. Ct. 1694, 131 L. Ed. 2d 558 (U.S. 1995).

Dividends received on behalf of minors. —

Where a divorced mother borrowed money from her childrens’ permanent fund dividends, it was not error on the part of the court to deny the former husband’s request that the mother be ordered to repay the amount taken. Hayes v. Hayes, 922 P.2d 896 (Alaska 1996).

Because a mother was awarded primary physical custody, a superior court did not err in authorizing her to use the children’s Alaska Permanent Fund Dividends as needed. Ronny M. v. Nanette H., 303 P.3d 392 (Alaska 2013).

Superior court's standard order regarding the child's permanent fund dividend (PFD) was not error or an abuse of discretion because it stated that the PFD could be spent for the child's health, education, and welfare. Jessica P. v. Gary P., — P.3d — (Alaska Mar. 17, 2021) (memorandum decision).

Construction with Federal Soldiers’ and Sailors’ Civil Relief Act. —

Servicemember, who had been discharged from the Navy, was not eligible to claim a Permanent Fund Dividend (PFD) for a certain year where he failed to overcome presumption that he had not been a resident of Alaska for the last five years; servicemember’s argument that the Federal Soldiers’ and Sailors’ Civil Relief Act preempted state law in that area was not persuasive, as that act applied to only two areas, taxation and voting, and PFD was not a tax but a benefit. Eagle v. Dep't of Revenue, 153 P.3d 976 (Alaska 2007).

Dividends properly withheld. —

The state department of revenue properly withheld appellant’s permanent fund dividends (PFDs) for 1992, 1993, and 1994 because the absences he reported from his primary Alaska residence exceeded the 180-day period allowed under former AS 43.23.005(a) , 43.23.095 (8), and their implementing regulations. Schikora v. Department of Revenue, 7 P.3d 938 (Alaska 2000).

Dividend properly denied. —

A military family did not meet the eligibility requirements where they had been absent from Alaska for more than five years; a presumption arose under 15 AAC 23.163(f) that they did not intend to return and remain in Alaska. Harrod v. State, 255 P.3d 991 (Alaska 2011).

Applied in

Department of Revenue, Permanent Fund Dividend Div. v. Cosio, 858 P.2d 621 (Alaska 1993); Department of Revenue, Permanent Fund Dividend Div. v. Wilder, 929 P.2d 1280 (Alaska 1997).

Quoted in

Heller v. Dep't of Revenue, 314 P.3d 69 (Alaska 2013).

Stated in

Alaska Oil Co. v. Alaska, 45 B.R. 358 (D. Alaska 1985); Barber v. State, Dep't of Corr., 314 P.3d 58 (Alaska 2013); Wielechowski v. State, 403 P.3d 1141 (Alaska 2017); Berry v. Coulman, 440 P.3d 264 (Alaska 2019).

Cited in

Standard Alaska Prod. Co. v. Schaible, 874 F.2d 624 (9th Cir. Alaska 1989); Lee v. Cox, 790 P.2d 1359 (Alaska 1990); Morgan v. Department of Revenue, 813 P.2d 295 (Alaska 1991); Handley v. State, Dep't of Revenue, 838 P.2d 1231 (Alaska 1992); United States v. Pleier, 849 F. Supp. 1321 (D. Alaska 1994); In re Tea ex rel. A.T., 278 P.3d 1262 (Alaska 2012).

Sec. 43.23.008. Allowable absences.

  1. Subject to (b) and (d) of this section, an otherwise eligible individual who is absent from the state during the qualifying year remains eligible for a current year permanent fund dividend if the individual was absent
    1. receiving secondary or postsecondary education on a full-time basis;
    2. receiving vocational, professional, or other specific education on a full-time basis for which, as determined by the Alaska Commission on Postsecondary Education, a comparable program is not reasonably available in the state;
    3. serving on active duty as a member of the armed forces of the United States or accompanying, as that individual’s spouse, minor dependent, or disabled dependent, an individual who is
      1. serving on active duty as a member of the armed forces of the United States; and
      2. eligible for a current year dividend;
    4. serving under foreign or coastal articles of employment aboard an oceangoing vessel of the United States merchant marine;
    5. receiving continuous medical treatment recommended by a licensed physician or convalescing as recommended by the physician who treated the illness if the treatment or convalescence is not based on a need for climatic change;
    6. providing care for a parent, spouse, sibling, child, or stepchild with a critical life-threatening illness whose treatment plan, as recommended by the attending physician, requires travel outside the state for treatment at a medical specialty complex;
    7. providing care for the individual’s terminally ill family member;
    8. settling the estate of the individual’s deceased parent, spouse, sibling, child, or stepchild, provided the absence does not exceed 220 cumulative days;
    9. serving as a member of the United States Congress;
    10. serving on the staff of a member from this state of the United States Congress;
    11. serving as an employee of the state in a field office or other location;
    12. accompanying a minor who is absent under (5) of this subsection;
    13. accompanying another eligible resident who is absent for a reason permitted under (1), (2), (5) — (12), (16), or (17) of this subsection as the spouse, minor dependent, or disabled dependent of the eligible resident;
    14. serving as a volunteer in the federal peace corps program;
    15. because of training or competing as a member of the United States Olympic Team or a United States national team for an Olympic sport;
    16. participating for educational purposes in a student fellowship sponsored by the United States Department of Education or by the United States Department of State;
    17. for any reason consistent with the individual’s intent to remain a state resident, provided the absence or cumulative absences do not exceed
      1. 180 days in addition to any absence or cumulative absences claimed under (3) of this subsection if the individual is not claiming an absence under (1), (2), or (4) — (16) of this subsection;
      2. 120 days in addition to any absence or cumulative absences claimed under (1) — (3) of this subsection if the individual is not claiming an absence under (4) — (16) of this subsection but is claiming an absence under (1) or (2) of this subsection; or
      3. 45 days in addition to any absence or cumulative absences claimed under (1) — (16) of this subsection if the individual is claiming an absence under (4) — (16) of this subsection.
  2. An individual may not claim an allowable absence under (a)(1) — (16) of this section unless the individual was a resident of the state for at least six consecutive months immediately before leaving the state.
  3. [Repealed, § 3 ch 33 SLA 2013.]
  4. After an individual has been absent from the state for more than 180 days in each of the five preceding qualifying years, the department shall presume that the individual is no longer a state resident. The individual may rebut this presumption by providing clear and convincing evidence to the department that
    1. the individual was physically present in the state for at least 30 cumulative days during the past five years; and
    2. the individual is a state resident as defined in AS 43.23.295 .
  5. To determine whether an individual intends to return and remain in the state indefinitely, the department shall consider all relevant factors, including
    1. the length of time the individual was absent from the state compared to the length of time the individual was physically present in the state;
    2. the frequency and duration of voluntary return trips to the state during the past five years;
    3. whether the individual’s intent to return to and remain in the state is conditioned on future events beyond the individual’s control;
    4. the ties the individual has established with the state or another jurisdiction, as demonstrated by
      1. maintenance of a home;
      2. payment of resident taxes;
      3. registration of a vehicle;
      4. registration to vote and voting history;
      5. acquisition of a driver’s license, business license, or professional license; and
      6. receipt of benefits under a claim of residency in the state or another jurisdiction;
    5. the priority that the individual gave the state on an employment assignment preference list, including a list used by military personnel.
  6. For purposes of (a)(7) of this section, “family member” means a person who is
    1. legally related to the individual through marriage or guardianship; or
    2. the individual’s sibling, parent, grandparent, son, daughter, grandson, granddaughter, uncle, aunt, niece, nephew, or first cousin.

History. (§ 5 ch 44 SLA 1998; am § 1 ch 71 SLA 1999; am § 1 ch 69 SLA 2003; am §§ 1, 2 ch 116 SLA 2003; am §§ 20, 21 ch 42 SLA 2006; am §§ 1, 2 ch 36 SLA 2008; am §§ 1 — 3 ch 33 SLA 2013)

Revisor’s notes. —

Subsections (d) and (e) were enacted as (e) and (f) and relettered in 2013, at which time former (d) was relettered as (f).

In 2018, “AS 43.23.295 ” was substituted for “43.23.095” in paragraph (d)(2) to reflect the renumbering of that section.

Cross references. —

For a temporary provision relating to allowable absences during the novel coronavirus disease (COVID-19) public health disaster emergency declared by the governor on March 11, 2020, see § 16, ch. 10, SLA 2020 in the 2020 Temporary and Special Acts.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Editor’s notes. —

Under sec. 5, ch. 33, SLA 2013 the 2013 amendments to this section are retroactive to January 1, 2013.

Notes to Decisions

Imposition of 10-year limit on military personnel. —

A career Marine Corps officer who was from Alaska and had always maintained significant ties to Alaska, but had been absent for 10 consecutive years due to his military education and service, was not entitled to continue to receive the permanent fund dividend. The 10-year limitation denying people in situations like the officer’s did not violate his equal protection rights; the rule was substantially related to the legitimate interests of limiting dividends to permanent Alaska residents and preventing fraud. Ross v. State, 292 P.3d 906 (Alaska 2012).

Residency requirement. —

Military personnel may claim absences in combination, but claiming the absences in combination does not permit bypassing the six consecutive months requirement. Heller v. Dep't of Revenue, 314 P.3d 69 (Alaska 2013).

A Permanent Fund Dividend claimant may not briefly enter the state, physically leave the state for the entire remaining portion of the six-month period, and satisfy the six-month requirement from another location. Heller v. Dep't of Revenue, 314 P.3d 69 (Alaska 2013).

Husband and wife were ineligible for Permanent Fund Dividends for two years because neither met unambiguous statutory residency requirements, since (1) the husband's absence for more than five years created a presumption of nonresidence the husband could not rebut, and (2) the wife's eligibility as an accompanying military spouse depended on the husband's. Jones v. State, 441 P.3d 966 (Alaska 2019).

Alaska Supreme Court could not exercise the Court's equitable powers to award a husband and wife Permanent Fund Dividends for two years because the Court was not allowed to exercise such powers to contravene a properly enacted statute specifying residency requirements for such purposes. Jones v. State, 441 P.3d 966 (Alaska 2019).

Absence due to military service. —

An applicant may be absent due to military service, and in the same qualifying year, be absent for any reason consistent with his intent to remain a state resident as long as that additional absence does not exceed 180 days. Heller v. Dep't of Revenue, 314 P.3d 69 (Alaska 2013).

Constitutionality. —

Six-month requirement under subsection (b) does not prevent a service member from employment in the military in violation of Alaska Const. art. I, § 23; it simply provides that before military personnel can claim state resources through the Permanent Fund Dividend program, the service member must spend six months in state. This provision is consistent with constitutional requirements because it directly advances a state interest that is undoubtedly legitimate. Heller v. Dep't of Revenue, 314 P.3d 69 (Alaska 2013).

Statutory presumption of nonresidence for Permanent Fund Dividend (PFD) purposes created by a husband's absence from Alaska for over five years did not violate the right to travel because (1) different residency requirements could be imposed for different purposes, (2) an intent-to-remain requirement could be applied with other PFD-specific residency requirements, and (3) the statute applied equally to all PFD applicants with long allowable absences. Jones v. State, 441 P.3d 966 (Alaska 2019).

Statutory presumption of nonresidence for Permanent Fund Dividend (PFD) purposes created by a husband's absence from Alaska for over five years did not violate Alaska or federal equal protection because (1) minimal scrutiny applied to this mere economic interest, and (2) the statute was substantially related to achieving a legitimate governmental objective. Jones v. State, 441 P.3d 966 (Alaska 2019).

Statutory presumption of nonresidence for Permanent Fund Dividend (PFD) purposes created by a husband's absence from Alaska for over five years was not an unconstitutional ex post facto law because the statute was not a penal statute. Jones v. State, 441 P.3d 966 (Alaska 2019).

Construction with Federal Soldiers’ and Sailors’ Civil Relief Act. —

Servicemember, who had been discharged from the Navy, was not eligible to claim a Permanent Fund Dividend (PFD) for a certain year where he failed to overcome presumption that he had not been a resident of Alaska for the last five years; servicemember’s argument that the Federal Soldiers’ and Sailors’ Civil Relief Act preempted state law in that area was not persuasive, as that act applied to only two areas, taxation and voting, and PFD was not a tax but a benefit. Eagle v. Dep't of Revenue, 153 P.3d 976 (Alaska 2007).

Imposition of presumption that family did not intend to return. —

A military family who did not reside in Alaska for five years was not eligible to receive permanent fund dividends under the active duty “allowable absence” provision because they had spent a total of 14 days in Alaska in the five years prior to the application and failed to rebut the presumption that they did not intend to return and remain in Alaska. Harrod v. State, 255 P.3d 991 (Alaska 2011).

Statutory presumption of nonresidence for Permanent Fund Dividend purposes created by a husband's absence from Alaska for over five years was not an unconstitutional irrebuttable presumption because (1) the statute provided a means to rebut the presumption, and (2) reasonable residency requirements could be imposed. Jones v. State, 441 P.3d 966 (Alaska 2019).

Cited in

Dep't of Revenue v. Andrade, 23 P.3d 58 (Alaska 2001).

Sec. 43.23.010. Eligibility for permanent fund dividend. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.011. Application period.

  1. An application for a permanent fund dividend shall be filed during the period that begins January 1 and ends March 31 of that dividend year.
  2. An otherwise eligible individual may apply for a current year dividend after March 31 of that year if the individual was eligible during the application period under (a) of this section for hostile fire or imminent danger pay while serving on active duty as a member of the armed forces of the United States. The individual must apply under this subsection within 90 days after the last day the individual was eligible for hostile fire or imminent danger pay. If the individual was eligible for hostile fire or imminent danger pay on March 31 of the current dividend year, the 90-day application period extension begins on the first day after March 31 that the individual was no longer eligible for the pay.
  3. The commissioner may permit an individual to apply for a permanent fund dividend for any year after the application deadline under (a) or (b) of this section if the individual
    1. at any time during the application period for that dividend established in (a) or (b) of this section,
      1. served on active duty as a member of the armed forces of the United States; and
      2. was eligible for hostile fire or imminent danger pay; and
    2. demonstrates a reasonable cause for the delay in applying for that dividend.

History. (§ 9 ch 4 SLA 1992; am § 1 ch 112 SLA 2004; am § 22 ch 42 SLA 2006)

Cross references. —

For a temporary provision extending the application period for dividend year 2020, see § 10, ch. 10, SLA 2020 in the 2020 Temporary and Special Acts.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Notes to Decisions

Stated in

Underwood v. State, 881 P.2d 322 (Alaska 1994).

Sec. 43.23.015. Application and proof of eligibility.

  1. The commissioner shall adopt regulations under the Administrative Procedure Act (AS 44.62) for determining the eligibility of individuals for permanent fund dividends. The commissioner may require an individual to provide proof of eligibility, and the commissioner may use other information available from other state departments or agencies to determine the eligibility of an individual. The commissioner shall consider all relevant circumstances in determining the eligibility of an individual. However, the residency of an individual’s spouse may not be the principal factor relied upon by the commissioner in determining the residency of the individual.
  2. The department shall prescribe and furnish an application form for claiming a permanent fund dividend. The application must include
    1. notice of the penalties provided for under AS 43.23.270 ;
    2. a statement of eligibility and a certification of residency;
    3. the means for an applicant eligible to vote under AS 15.05, or a person authorized to act on behalf of the applicant, to furnish information required by AS 15.07.060(a)(1) — (4) and (7) — (9), and an attestation that such information is true.
  3. Except as provided in (d) of this section or as may be provided by regulations adopted by the department, an individual must personally sign the application for permanent fund dividends, including the certification of residency required under (b) of this section.
  4. The application and certification of residency of an unemancipated individual under 18 years of age or of a disabled or an incompetent individual must be signed by the individual’s parent, legal guardian, or other authorized representative. An individual may complete, sign, and file an application on behalf of a member of the armed forces of the United States who is serving on active duty outside of the United States if the individual has a power of attorney from the member of the armed forces that authorizes, in specific or general terms, the individual to file that application.
  5. If a public agency claims a permanent fund dividend on behalf of an individual, the public agency shall hold the dividend in trust for the individual. Money held in trust under this subsection shall be invested by the commissioner in accordance with AS 37.10.070 .
  6. A minor or a disabled or an incompetent individual may not maintain a claim against the state or an officer or employee of the state based on the manner in which the parent, guardian, or authorized representative other than a public agency of the state managed or disposed of permanent fund dividends received on behalf of the minor or disabled or incompetent individual.
  7. If an individual is aggrieved by a decision of the department determining the individual’s eligibility for a permanent fund dividend or the individual’s authority to claim a permanent fund dividend on behalf of another, the individual may, upon payment of a $25 appeal fee, request the department to review its decision. Within 12 months after the administrative appeal is filed, the department shall provide the individual with a final written decision. If the individual is aggrieved by the decision of the department after all administrative proceedings, the individual may appeal that decision to the superior court in accordance with AS 44.62.560 . An appeal to the court under this section does not entitle the aggrieved individual to a trial de novo. The appeal shall be based on the record of the administrative proceeding from which appeal is taken and the scope of appeal is limited to matters contained in the record of the administrative proceeding. If, as a result of an administrative proceeding or a court appeal, the individual prevails, the $25 appeal fee shall be returned to the individual by the department.
  8. The penalty and enforcement provisions of AS 43.23.270 apply to an individual who claims a permanent fund dividend on behalf of another.
  9. An indigent individual may apply for a waiver of the appeal fee required under (g) of this section. The department shall prescribe and furnish a form for that purpose. The department shall grant the waiver if, during the year immediately preceding the year the form is submitted to the department, the individual was a member of a family with an income equal to or less than the federal poverty guidelines for Alaska set by the United States Department of Health and Human Services.
  10. The application form for claiming a permanent fund dividend must include a place for the applicant to voluntarily indicate that the applicant is a veteran, the branch of service, including the Alaska Territorial Guard, and the dates of service. Notwithstanding AS 43.23.110 , the department shall release information provided under this subsection to the Department of Military and Veterans’ Affairs and may not otherwise release the information. The Department of Military and Veterans’ Affairs may only release the information to congressionally chartered veterans service organizations in the state. The application form must contain notice that providing the information under this subsection is voluntary, that the information will be released as provided in this subsection, and that the veterans service organizations are not required to keep it confidential.

History. (§ 1 ch 102 SLA 1982; am § 2 ch 159 SLA 1988; am § 4 ch 107 SLA 1989; am §§ 2, 3 ch 68 SLA 1990; am § 47 ch 21 SLA 1991; am § 2 ch 68 SLA 1991; am §§ 10, 11 ch 4 SLA 1992; am §§ 1, 2 ch 18 SLA 1996; am § 1 ch 83 SLA 2005; am § 1 ch 90 SLA 2008; am § 6, 2016 General Election Ballot Measure No. 1)

Revisor’s notes. —

In 2018, “AS 43.23.270 ” was substituted for “AS 43.23.035 ” in subsection (b) and (h) “AS 43.23.110 ” was substituted for “43.23.017” in subsection (j) to reflect the renumbering of those sections.

Cross references. —

For federal poverty guidelines, see aspe.hhs.gov/poverty-guidelines.

For findings and intent for the 2016 [effective in 2017] changes to (b), see sec. 1 of 2016 General Election Ballot Measure No. 1.

Administrative Code. —

For hearing procedures, see 15 AAC 5, art. 1.

For permanent fund dividend program, see 15 AAC 23, art. 1.

Effect of amendments. —

The 2016 amendment, effective March 1, 2017, in (b), deleted “and contain” at the beginning of (b)(2), added (b)(3), and made related changes.

Notes to Decisions

Extension of filing time denied. —

Department of revenue ruling that an extension of time for filing an application for a permanent fund dividend was not available because the information submitted in the original application was deceptive was reasonable and not arbitrary, where applicant submitted false residency verifications containing forged signatures. Handley v. State, Dep't of Revenue, 838 P.2d 1231 (Alaska 1992).

Construction with AS 01.10.055 . —

The Alaska Department of Revenue has the authority to create eligibility requirements for PFDs that exceed those found in AS 01.10.055 . Harrod v. State, 255 P.3d 991 (Alaska 2011).

Prohibiting permanent fund distribution to illegal aliens. —

An administrative regulation, which restricted permanent fund dividend eligibility to aliens with resident alien or refugee status, fell within the delegated authority of the commissioner of revenue to regulate the eligibility of individuals for permanent fund dividends. The regulation was also constitutional under the state and federal equal protection clauses. Limiting the distribution of dividends to those who are lawful permanent residents is rationally related to legitimate objectives of the dividend program. Department of Revenue, Permanent Fund Dividend Div. v. Cosio, 858 P.2d 621 (Alaska 1993).

Out-of-state students. —

Regulation 15 AAC 23.175(c)(2) (now repealed) is consistent with subsection (a) because it defines “absent only for secondary or postsecondary education” and thereby resolves the question of who is a permanent resident qualified to receive a permanent fund dividend. The regulation is not arbitrary or unreasonable. Thus, an out-of-state part-time student was properly denied dividend. Department of Revenue, Permanent Fund Dividend Div. v. Bradley, 896 P.2d 237 (Alaska 1995).

Military spouse. —

In the case of a military spouse, although the former allowable absence requirement depended on the residency of her spouse, it was not accurate to characterize that requirement as “the principal factor” which determined her residency. Department of Revenue, Permanent Fund Dividend Div. v. Hale, 978 P.2d 1276 (Alaska 1999).

Quoted in

Dep't of Revenue v. Andrade, 23 P.3d 58 (Alaska 2001).

Sec. 43.23.016. Voter registration. [Renumbered as AS 43.23.101.]

Sec. 43.23.017. Applicant information confidential. [Renumbered as AS 43.23.110.]

Sec. 43.23.020. Proof of eligibility. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.021. Delayed payment of certain dividends.

  1. Notwithstanding other provisions regarding the payment of permanent fund dividends, if an individual is required to register as a sex offender or child kidnapper under AS 12.63 and has not registered or has not completed the required periodic verifications or notices required under AS 12.63, payment of the dividend for that individual shall be delayed.
  2. If payment of a dividend is delayed, the department shall notify the individual in writing of the delayed payment status, explain the requirements of this section, and request proof of registration and compliance with the verifications and notices required under AS 12.63. The dividend may not be paid unless, within one year after the notification, the department determines that the individual has registered and is in compliance with the verifications and notices required under AS 12.63.
  3. The permanent fund dividend of an individual for whom payment has been delayed, but that remains payable under (b) of this section, is subject to levy, execution, garnishment, attachment, or any other remedy for the collection of debt. The department shall immediately pay that dividend, or the portion of it that has been claimed by a debtor, as provided in AS 43.23.140 43.23.170 .
  4. If an individual for whom payment of a permanent fund dividend has been delayed but remains payable under (b) of this section dies before the dividend is paid or payable, the department shall pay the dividend to a personal representative of the individual’s estate.
  5. The department shall include notice with the dividend application form of the requirements of (a) and (b) of this section.

History. (§ 32 ch 75 SLA 2008)

Revisor’s notes. —

In 2018, “AS 43.23.140 43.23.170 ” was substituted for “AS 43.23.065 43.23.068 ” to reflect the renumbering of those sections.

Sec. 43.23.025. Amount of dividend.

  1. By October 1 of each year, the commissioner shall determine the value of each permanent fund dividend for that year by
    1. determining the total amount available for dividend payments, which equals
      1. the amount of income of the Alaska permanent fund transferred to the dividend fund under AS 37.13.145(b) during the current year;
      2. plus the unexpended and unobligated balances of prior fiscal year appropriations that lapse into the dividend fund under AS 43.23.045(d) ;
      3. less the amount necessary to pay prior year dividends from the dividend fund in the current year under AS 43.23.005(h) , 43.23.021 , and 43.23.055 (3) and (7);
      4. less the amount necessary to pay dividends from the dividend fund due to eligible applicants who, as determined by the department, filed for a previous year’s dividend by the filing deadline but who were not included in a previous year’s dividend computation;
      5. less appropriations from the dividend fund during the current year, including amounts to pay costs of administering the dividend program and the hold harmless provisions of AS 43.23.240 ;
    2. determining the number of individuals eligible to receive a dividend payment for the current year and the number of estates and successors eligible to receive a dividend payment for the current year under AS 43.23.005(h) ; and
    3. dividing the amount determined under (1) of this subsection by the amount determined under (2) of this subsection.
  2. [Repealed, § 5 ch 68 SLA 1991.]

History. (§ 1 ch 102 SLA 1982; am § 1 ch 55 SLA 1983; am § 2 ch 43 SLA 1984; am § 2 ch 57 SLA 1987; am § 2 ch 54 SLA 1988; am § 4 ch 68 SLA 1990; am § 1 ch 198 SLA 1990; am § 5 ch 68 SLA 1991; am § 27 ch 134 SLA 1992; am § 2 ch 91 SLA 1998; am § 33 ch 75 SLA 2008)

Revisor’s notes. —

In 2018, “AS 43.23.240 ” was substituted for “43.23.075” in subparagraph (a)(1)(E) to reflect the renumbering of that section.

Notes to Decisions

Stated in

Alaska Oil Co. v. Alaska, 45 B.R. 358 (D. Alaska 1985); Wielechowski v. State, 403 P.3d 1141 (Alaska 2017).

Cited in

Camacho v. United States (In re Camacho), 177 B.R. 667 (Bankr. D. Alaska 1994); Dep't of Revenue v. Andrade, 23 P.3d 58 (Alaska 2001).

Sec. 43.23.028. Public notice.

  1. By October 1 of each year, the commissioner shall give public notice of the value of each permanent fund dividend for that year and notice of the information required to be disclosed under (3) of this subsection. In addition, the stub attached to each individual dividend disbursement advice must
    1. disclose the amount of each dividend attributable to income earned by the permanent fund from deposits to that fund required under art. IX, sec. 15, Constitution of the State of Alaska;
    2. disclose the amount of each dividend attributable to income earned by the permanent fund from appropriations to that fund and from amounts added to that fund to offset the effects of inflation;
    3. disclose the amount by which each dividend has been reduced due to each appropriation from the dividend fund, including amounts to pay the costs of administering the dividend program and the hold harmless provisions of AS 43.23.240 ;
    4. include a statement that an individual is not eligible for a dividend when
      1. during the qualifying year, the individual was convicted of a felony;
      2. during all or part of the qualifying year, the individual was incarcerated as a result of the conviction of a
        1. felony; or
        2. misdemeanor if the individual has been convicted of a prior felony or two or more prior misdemeanors;
    5. include a statement that the legislative purpose for making individuals listed under (4) of this subsection ineligible is to
      1. provide funds for services for and payments to crime victims and operating costs of the Violent Crimes Compensation Board;
      2. provide funds to pay restitution owed to crime victims;
      3. provide funds for grants to nonprofit organizations for services for crime victims and for mental health services and substance abuse treatment for offenders;
      4. provide funds for the office of victims’ rights;
      5. provide funds to the Council on Domestic Violence and Sexual Assault for grants for the operation of domestic violence and sexual assault programs; and
      6. obtain reimbursement for some of the costs imposed on the Department of Corrections related to incarceration or probation of those individuals;
    6. disclose the total amount that would have been paid during the previous fiscal year to individuals who were ineligible to receive dividends under AS 43.23.005(d) if they had been eligible;
    7. disclose the total amount transferred or appropriated for the current fiscal year under AS 43.23.048 for each of the accounts, funds, and agencies listed in AS 43.23.048 .
  2. To the extent that amounts appropriated for a fiscal year do not exceed the total amount that would have been paid during the previous fiscal year to individuals who were ineligible to receive dividends under AS 43.23.005(d) or under AS 43.23.021(b) if they had been eligible, the notice requirements of (a)(3) of this section do not apply to transfers from the dividend fund to the restorative justice account (AS 43.23.048 ).

History. (§ 2 ch 198 SLA 1990; am § 3 ch 68 SLA 1991; am § 1 ch 82 SLA 1993; am § 4 ch 46 SLA 1996; am § 6 ch 44 SLA 1998; am § 26 ch 92 SLA 2001; am § 22 ch 175 SLA 2004; am § 34 ch 75 SLA 2008; am § 1 ch 79 SLA 2008; am § 5 ch 21 SLA 2018)

Revisor’s notes. —

In 2018, “AS 43.23.240 ” was substituted for “43.23.075” in paragraph (a)(3) to reflect the renumbering of that section.

Effect of amendments. —

The 2018 amendment, effective January 1, 2019, rewrote (a)(5); in (a)(7), twice substituted “AS 43.23.048 ” for “(b) of this section”, inserted “transferred or” following “the total amount”, inserted “accounts,” following “for each of these” and made a related change; rewrote (b).

Editor’s notes. —

Section 44, ch. 75, SLA 2008 explicitly declares that § 34, ch. 75, SLA 2008, amending (b) of this section to add a reference to AS 43.23.021(b) , is subject to severability as authorized by AS 01.10.030 .

Legislative history reports. —

For House letter of intent relating to the enactment of subsection (b) by § 3, ch. 68, SLA 1991 (HCS CSSB 98(FIN)), see 1991 House Journal, pages 1418 — 1419.

Sec. 43.23.030. Amount of dividend. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.033. Subpoena power. [Renumbered as AS 43.23.260.]

Sec. 43.23.035. Penalties and enforcement. [Renumbered as AS 43.23.270.]

Article 2. Administration.

Sec. 43.23.040. Penalties and enforcement. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.045. Dividend fund.

  1. The dividend fund is established as a separate fund in the state treasury.  The dividend fund shall be administered by the commissioner and shall be invested by the commissioner in the same manner as provided in AS 37.10.070 .
  2. [Repealed, § 29 ch 134 SLA 1992.]
  3. [Repealed, § 24 ch 99 SLA 1985.]
  4. Unless specified otherwise in an appropriation act, the unexpended and unobligated balance of an appropriation to implement this chapter lapses into the dividend fund on June 30 of the fiscal year for which the appropriation was made and shall be used in determining the amount of and paying the subsequent year’s dividend as provided in AS 43.23.025(a)(1)(B) .
  5. [Repealed, § 29 ch 134 SLA 1992.]

History. (§ 1 ch 102 SLA 1982; am § 24 ch 99 SLA 1985; am § 3 ch 57 SLA 1987; am § 1 ch 38 SLA 1989; am §§ 2, 3 ch 18 SLA 1991; am § 29 ch 134 SLA 1992)

Cross references. —

For annual deposit into the dividend fund, see AS 37.13.145 .

Legislative history reports. —

For governor’s transmittal letter related to the amendment to (b) of this section by ch. 38, SLA 1989 (CSHB 276(Fin) am), see 1989 House Journal 933-934.

Notes to Decisions

Stated in

Alaska Oil Co. v. Alaska, 45 B.R. 358 (D. Alaska 1985); Wielechowski v. State, 403 P.3d 1141 (Alaska 2017).

Sec. 43.23.048. Restorative justice account.

  1. The restorative justice account is created as a separate account in the dividend fund. The commissioner shall transfer from the dividend fund to the restorative justice account each fiscal year an amount equal to the amount that would have been paid during the previous fiscal year to individuals who were ineligible to receive dividends under AS 43.23.005(d) if they had been eligible.
  2. The legislature may appropriate amounts from the account to the following recipients in the priority order and percentages listed:
    1. 10 to 13 percent to the crime victim compensation fund established under AS 18.67.162 for payments to crime victims and for operating costs of the Violent Crimes Compensation Board;
    2. two to six percent to the office of victims’ rights for payments to crime victims as provided in AS 24.65.105 and for operating costs of the office of victims’ rights;
    3. one to three percent to nonprofit organizations to provide grants for services for crime victims and domestic violence and sexual assault programs;
    4. one to three percent to nonprofit organizations to provide grants for mental health services and substance abuse treatment for offenders; and
    5. 79 to 88 percent to the Department of Corrections for costs related to incarceration or probation.
  3. A person who is subject to an order of restitution all or part of which is paid under this section shall reimburse the state for the amount paid by the state. The state may enforce payment of reimbursement under this subsection as if the reimbursement were a civil judgment enforceable by execution.
  4. The legislature may appropriate money received under (c) of this section to the restorative justice account.
  5. Nothing in this section creates a dedicated fund.

History. (§ 6 ch 21 SLA 2018)

Effective dates. —

Section 14, ch. 21, SLA 2018 makes this section effective January 1, 2019.

Sec. 43.23.050. Dividend fund established. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.055. Duties of the department.

The department shall

  1. annually pay permanent fund dividends from the dividend fund;
  2. subject to AS 43.23.011 and (8) of this section, adopt regulations under AS 44.62 (Administrative Procedure Act) that establish procedures and time limits for claiming a permanent fund dividend; the department shall determine the number of eligible applicants by October 1 of the year for which the dividend is declared and pay the dividends by December 31 of that year;
  3. adopt regulations under AS 44.62 (Administrative Procedure Act) that establish procedures and time limits for an individual upon emancipation or upon reaching majority to apply for permanent fund dividends not received during minority because the parent, guardian, or other authorized representative did not apply on behalf of the individual;
  4. assist residents of the state, particularly in rural areas, who, because of language, disability, or inaccessibility to public transportation, need assistance to establish eligibility and to apply for permanent fund dividends;
  5. use a list of individuals ineligible for a dividend under AS 43.23.005(d) provided annually by the Department of Corrections and the Department of Public Safety to determine the number and identity of those individuals;
  6. adopt regulations that are necessary to implement AS 43.23.005(d) and 43.23.048 ;
  7. adopt regulations that establish procedures for the parent, guardian, or other authorized representative of a disabled individual to apply for prior year permanent fund dividends not received by the disabled individual because no application was submitted on behalf of the individual;
  8. adopt regulations that establish procedures for an individual to apply to have a dividend disbursement under AS 37.25.050(a)(2) reissued if it is not collected within two years after the date of its issuance; however, the department may not establish a time limit within which an application to have a disbursement reissued must be filed;
  9. provide any information, upon request, contained in permanent fund dividend records to the child support services agency created in AS 25.27.010 , or the child support enforcement agency of another state, for child support purposes authorized under law; if the information is contained in an electronic data base, the department shall provide the requesting agency with either
    1. access to the data base; or
    2. a copy of the information in the data base and a statement certifying its contents;
  10. establish a fraud investigation unit for the purpose of assisting the
    1. Department of Law in the prosecution of individuals who apply for or obtain a permanent fund dividend in violation of a provision in AS 11, by detecting and investigating those crimes; and
    2. commissioner to detect and investigate the claiming or paying of permanent fund dividends that should not have been claimed by or paid to an individual and to impose the penalties and enforcement provisions under AS 43.23.270 ;
  11. adopt regulations under AS 44.62 (Administrative Procedure Act) so that contributions under AS 43.23.130 are given a priority over donations under AS 43.23.230 if the total amount of contributions and donations elected by an applicant exceeds the amount of the permanent fund dividend that the applicant is entitled to receive.

History. (§ 1 ch 102 SLA 1982; am § 2 ch 55 SLA 1983; am § 3 ch 43 SLA 1984; am § 3 ch 54 SLA 1988; am § 5 ch 68 SLA 1990; am § 14 ch 4 SLA 1992; am § 1 ch 64 SLA 1993; am § 5 ch 46 SLA 1996; am § 144 ch 87 SLA 1997; am § 23 ch 175 SLA 2004; am § 25 ch 42 SLA 2006; am § 7 ch 21 SLA 2018; am § 7 ch 80 SLA 2018)

Revisor's notes. —

In 2004, “child support enforcement agency created in AS 25.27.010 ” was changed to “child support services agency created in AS 25.27.010 ” in this section in accordance with § 12(a), ch. 107, SLA 2004.

In 2018, “AS 43.23.270 ” was substituted for “43.23.035” in subparagraph (10)(B) to reflect the renumbering of that section.

In 2018, in paragraph (11), " AS 43.23.130 " was substituted for " AS 43.23.062 " and " AS 43.23.230 " was substituted for " AS 43.23.064" to reflect the 2018 renumbering of those sections.

Administrative Code. —

For hearing procedures, see 15 AAC 5, art. 1.

For permanent fund dividend program, see 15 AAC 23, art. 1.

Effect of amendments. —

The first 2018 amendment, effective January 1, 2019, in (6), added “and 43.23.048” at the end, and made stylistic changes.

The second 2018 amendment, effective January 1, 2019, added (11), and made related and stylistic changes.

Notes to Decisions

Applied in

Handley v. State, Dep't of Revenue, 838 P.2d 1231 (Alaska 1992); Department of Revenue, Permanent Fund Dividend Div. v. Cosio, 858 P.2d 621 (Alaska 1993).

Quoted in

Dep't of Revenue v. Andrade, 23 P.3d 58 (Alaska 2001).

Sec. 43.23.060. Duties of the department. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.062. Contributions from dividends. [Renumbered as AS 43.23.130.]

Sec. 43.23.065. Exemption of and levy on permanent fund dividends. [Renumbered as AS 43.23.140.]

Sec. 43.23.066. Claims on reimbursement for court-ordered treatment. [Renumbered as AS 43.23.150.]

Sec. 43.23.067. Claims of defaulted education loans. [Renumbered as AS 43.23.160.]

Sec. 43.23.068. Claims on defaulted public assistance overpayment. [Renumbered as AS 43.23.170.]

Sec. 43.23.069. Assignments. [Renumbered as AS 43.23.200.]

Sec. 43.23.070. Exemption of permanent fund dividends. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.071. Fees for processing claims and assignments. [Renumbered as AS 43.23.210.]

Sec. 43.23.072. Claims for amounts owed under the Alaska Employment Security Act. [Renumbered as AS 43.23.180.]

Sec. 43.23.073. Claims of the University of Alaska. [Renumbered as AS 43.23.190.]

Sec. 43.23.075. Eligibility for public assistance. [Renumbered as AS 43.23.240.]

Sec. 43.23.080. Eligibility for state public assistance payments. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.085. Eligibility for state programs. [Renumbered as AS 43.23.250.]

Sec. 43.23.090. Tax exemption. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.095. Definitions. [Renumbered as AS 43.23.295.]

Sec. 43.23.100. Definitions. [Repealed, § 22 ch 102 SLA 1982.]

Sec. 43.23.101. Voter registration.

The commissioner shall establish by rule a schedule by which the commissioner will provide, and shall provide as soon as is practicable the director of elections with

  1. electronic records from the permanent fund dividend applications of the information required by AS 15.07.060(a)(1) — (4) and (7) — (9), and the attestation that such information is true, for each permanent fund dividend applicant who
    1. is a citizen of the United States; and
    2. is at least 18 years of age or will be within 90 days of the date of the application; and
  2. the mailing addresses for all permanent fund dividend applicants.

History. (§ 1 ch 48 SLA 1992; am § 91 ch 82 SLA 2000; am § 7, 2016 General Election Ballot Measure No. 1)

Revisor’s notes. —

Formerly AS 43.23.016 ; renumbered in 2018.

Cross references. —

For findings and intent for the 2016 [effective in 2017] changes to this section, see sec. 1 of 2016 General Election Ballot Measure No. 1.

Effect of amendments. —

The 2016 amendment, effective March 1, 2017, rewrote the section.

Sec. 43.23.110. Applicant information confidential.

  1. Except as provided in (c) of this section, information on each permanent fund dividend application, except the applicant’s name, is confidential.  The department may only release information that is confidential under this section
    1. to a local, state, or federal government agency;
    2. in compliance with a court order;
    3. to the individual who or agency that files an application on behalf of another;
    4. to a banking institution to verify the direct deposit of a permanent fund dividend or correct an error in that deposit;
    5. as directed to do so by the applicant;
    6. to a contractor who has a contract with a person entitled to obtain the information under (1) — (5) of this section to receive, store, or manage the information on that person’s behalf; a contractor receiving data under this paragraph may only use the data as directed by and for the purposes of the person entitled to obtain the information;
    7. to the division of elections as required by  AS 43.23.101 .
  2. Notwithstanding (a) of this section, the department may release the names and addresses of permanent fund dividend applicants to a legislator of this state and to the legislator’s office staff for official legislative purposes.
  3. Information submitted on a permanent fund dividend application that is used for the purpose of registering an applicant to vote under  AS 43.23.101 shall be kept confidential by the division of elections as provided in  AS 15.07.195 .

History. (§ 2 ch 181 SLA 2004; am § 2 ch 92 SLA 2008; am §§ 8, 9, 2016 General Election Ballot Measure No. 1)

Revisor’s notes. —

Formerly AS 43.23.017 ; renumbered in 2018, at which time “AS 43.23.101 ” was substituted for “AS 43.23.016 ” to reflect the renumbering of that section.

Cross references. —

For findings and intent for the 2016 [effective in 2017] changes to subsection (a) and the addition of subsection (c), see sec. 1 of 2016 General Election Ballot Measure No. 1.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Effect of amendments. —

The 2016 amendment, effective March 1, 2017, added ‘‘Except as provided in (c) of this section,’’ at the beginning of (a), added (a)(7) and (c), and made related changes.

Article 3. Deductions; Claims; Assignments.

Sec. 43.23.130. Contributions from dividends.

  1. Notwithstanding AS 43.23.200 , the Department of Revenue shall prepare the electronic Alaska permanent fund dividend application to allow an applicant who files electronically to direct that money be subtracted from the dividend payment and contributed to the crime victim compensation fund (AS 18.67.162 ), the peace officer and firefighter survivors’ fund, or one or more of the educational organizations, community foundations, or charitable organizations that appear on the contribution list contained in the application. A contribution to the crime victim compensation fund, the peace officer and firefighter survivors’ fund or to an organization may be $25, $50, $75, $100, or more, in increments of $50, up to the total amount of the permanent fund dividend that the applicant is entitled to receive. If the total amount of contributions elected by an applicant exceeds the amount of the permanent fund dividend that the applicant is entitled to receive, contributions shall be deducted from the dividend in the order of priority elected by the applicant on the application until the entire amount of the dividend that the applicant is entitled to receive is allocated for contribution. The electronic dividend application form must include notice that seven percent of the money contributed will be used for administrative costs incurred in implementing this section, and money from the dividend fund will not be used for that purpose.
  2. The department shall list each educational organization, community foundation, or charitable organization eligible under (c) and (d) of this section, each university campus that applies under (l) of this section, the crime victim compensation fund, and the peace officer and firefighter survivors’ fund on the contribution list. The department shall maintain an electronic database for the contribution list that is accessible to the public and that permits searches by organization or fund name, geographic location, and type. The department shall provide a statement of the contributions made by an individual that is suitable for federal income tax purposes to each individual who elects to contribute under (a) of this section.
  3. The department may not include a charitable organization, other than a community foundation, on the contribution list for a dividend year unless the purpose of the charitable organization is to provide services for youth development, workforce development, arts and culture, aid and services to the elderly, low-income individuals, individuals in emergency situations, victims of crime, disabled individuals, individuals with mental illness, primary, vocational, and higher education, health and dental care, recreational facilities, child abuse and neglect, economic development, food assistance, libraries, public broadcasting, recycling of waste, animal rescue, and zoos. The department may not include on the contribution list an educational organization, community foundation, or charitable organization that is the affiliate of a group. For purposes of this subsection,
    1. “affiliate” means an organization or foundation that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, a group;
    2. “group” has the meaning given in AS 15.13.400 (8)(B).
  4. Except for each campus of the University of Alaska, the department may include an educational organization, community foundation, or charitable organization on the contribution list for a current dividend year only if the organization
    1. before March 31 of the qualifying year, files an application for inclusion on the list for that dividend year on the form required by the department;
    2. is exempt from taxation under 26 U.S.C. 501(c)(3) (Internal Revenue Code) as an educational or a charitable organization on the date of application;
    3. was qualified for tax exempt status under 26 U.S.C. 501(c)(3) (Internal Revenue Code) as an educational or a charitable organization during the two calendar years that immediately precede the year the application is filed;
    4. unless exempted under federal law, has a current Internal Revenue Service Form 990 on file with the United States Department of the Treasury, Internal Revenue Service, or, if the Internal Revenue Service has granted a filing extension for the current year, has on file that form for the immediately preceding year;
    5. is directed by a voluntary board of directors or local advisory board, a majority of whose members are residents of the state;
    6. if a community foundation, provided in the state aid during the two calendar years that immediately precede the year the application is filed, or, if an education organization or charitable organization, provided in the state services during the two calendar years that immediately precede the year the application is filed;
    7. receives at least $100,000 or five percent of its total annual receipts, whichever is less, from contributions;
    8. has completed and provided to the department a financial audit with an unqualified opinion conducted by an independent certified public accountant for the fiscal year to which the Internal Revenue Service Form 990 required under (4) of this subsection applies; this paragraph applies only to an organization that is required by the federal government to complete a financial audit by an independent certified public accountant; and
    9. does not make grants or contributions to an organization that is exempt from taxation under 26 U.S.C. 501(c)(4) or (6).
  5. Unless an appropriation specifically directs that the money be used for costs incurred in implementing this section, the department may not use money from the dividend fund for administrative costs incurred in implementing this section, even if it has been appropriated for costs of administering the dividend program. Contributions shall be distributed to each organization as soon as practicable.
  6. The department shall charge an application fee of $250 for each educational organization, community foundation, or charitable organization that files an application under (d) of this section or for each university campus that files an application under (l) of this section. The application fees shall be separately accounted for under AS 37.05.142 . The annual estimated balance in the account maintained under AS 37.05.142 for application fees collected under this subsection may be appropriated for costs of administering this section.
  7. The department may use an agent or enter into a contract for the implementation and operation of the contribution program under this section. Before executing a contract with a corporation or other organization, the organization must provide a copy of its policies and procedures to the department. A contract entered into under this subsection is exempt from AS 36.30 (State Procurement Code).
  8. A public agency that claims a dividend on behalf of an individual under AS 43.23.015(e) may not elect to make contributions from the dividend under (a) of this section.
  9. The department may adopt regulations under AS 44.62 (Administrative Procedure Act) to carry out the provisions of this section. Notwithstanding this subsection and other provisions of law, a state agency, including the department, may not adopt regulations or otherwise impose requirements or procedures on organizations to implement, interpret, make specific, or otherwise carry out the provisions of this section unless required by the federal government. If an organization disagrees with an action of the department under this section and requests an administrative hearing, the hearing shall be conducted by the office of administrative hearings (AS 44.64.010 ).
  10. By January 20 of each year, the department shall prepare a report identifying the organizations on the contribution list for the immediately preceding year, together with the amount of contributions made to each of the organizations, and shall notify the legislature that the report is available.
  11. A community foundation may not deposit contributions received under this section into a fund that would be included in the definition of a donor advised fund under 26 U.S.C. 4966(d)(2) (Internal Revenue Code).
  12. The University of Alaska shall apply separately for each of the three main campuses to be listed on the contribution list for the current dividend year in the manner prescribed by the department. The University of Alaska may apply for each campus other than the three main campuses to be listed on the contribution list for the current dividend year in the manner prescribed by the department.
  13. In addition to the application fee in (f) of this section, the department shall withhold a coordination fee from each organization, foundation, or university campus that receives contributions under this section in the immediately preceding dividend year. The coordination fee for an organization, foundation, or university campus that receives contributions under this section shall be seven percent of the amount of contributions reported by the department under (j) of this section for the organization, foundation, or university campus for the immediately preceding dividend year. The coordination fee shall be separately accounted for under AS 37.05.142 and shall be accounted for separately from the application fee collected under (f) of this section. The annual estimated balance in the account maintained under AS 37.05.142 for coordination fees collected under this subsection may be appropriated for costs of administering this section. The department may not withhold a coordination fee for contributions to the crime victim compensation fund or the peace officer and firefighter survivors’ fund.
  14. In this section,
    1. “community foundation” means a nonprofit, autonomous, philanthropic institution that is organized and operated primarily as a permanent collection of endowed funds for the long-term benefit of a defined geographic area within one or more municipalities, that has a long-term goal of increasing its permanent unrestricted charitable endowment to benefit the area served, that primarily provides benefits by making grants and may also provide other forms of charitable services, that makes grants that are not limited to providing one type of benefit or to serving one population segment, and that makes grants to multiple grantees;
    2. “peace officer and firefighter survivors’ fund” means the fund established in AS 39.60.010(a) .

History. (§ 1 ch 41 SLA 2008; am §§ 2 — 8 ch 22 SLA 2010; am §§ 1 — 6 ch 106 SLA 2014; am §§ 2 — 5 ch 14 SLA 2017; am §§ 8 — 10 ch 21 SLA 2018)

Revisor’s notes. —

Subsection (k) was enacted as ( l ); relettered in 2010.

Subsections ( l ) and (m) were enacted as (m) and (n); relettered in 2014.

Subsection (n) was enacted as (k); relettered in 2010 and 2014.

Formerly AS 43.23.062 ; renumbered in 2018, at which time “AS 43.23.200 ” was substituted for “AS 43.23.069 ” to reflect the renumbering of that section.

Effect of amendments. —

The 2017 amendment, effective July 1, 2017, in (a) in the first and second sentences, inserted “to the peace officer and firefighter survivors’ fund or” following “contributed” or similar; in (b), inserted “, and the peace officer and firefighter survivors' fund” following “( l ) of this section”, inserted “or fund” following “searches by organization” and made related changes; in (m), added the last sentence, in (n), added (n)(2), and made related changes.

The 2018 amendment, effective January 1, 2019, in (a), in the first sentence, inserted “the crime victim compensation fund (AS 18.67.162 ),” following “and contributed to”, in the second sentence, inserted “the crime victim compensation fund,” following “A contribution to”, and made stylistic changes; in (b), in the first sentence, inserted “the crime victim compensation fund,” following “under ( l ) of this section,”; in (m), in the last sentence, inserted “the crime victim compensation fund or” following “for contributions to”.

Sec. 43.23.140. Exemption of and levy on permanent fund dividends.

  1. Except as provided in (b) of this section, 20 percent of the annual permanent fund dividend payable to an individual is exempt from levy, execution, garnishment, attachment, or any other remedy for the collection of debt. No other exemption applies to a dividend. Notwithstanding other laws, a writ of execution upon a dividend that has not been delivered to the debtor may be served on the commissioner by
    1. certified mail, return receipt requested; or
    2. a civilian process server licensed by the commissioner of public safety using electronic execution procedures, as provided under regulations adopted by the department.
  2. An exemption is not available under this section for permanent fund dividends taken to satisfy
    1. child support obligations required by court order or decision of the child support services agency under AS 25.27.140 25.27.220 ;
    2. court ordered restitution under AS 12.55.045 12.55.051 , 12.55.100 , or AS 47.12.120(b)(4) ;
    3. claims on defaulted education loans under AS 43.23.160 ;
    4. court ordered fines;
    5. writs of execution under AS 09.35 of a judgment that is entered
      1. against a minor in a civil action to recover damages and court costs;
      2. under AS 09.65.255 against the parent, parents, or legal guardian of an unemancipated minor;
    6. a debt owed by an eligible individual to an agency of the state, including the University of Alaska, unless the debt is contested and an appeal is pending, or the time limit for filing an appeal has not expired;
    7. a debt owed to a person for a program for the rehabilitation of perpetrators of domestic violence required under AS 12.55.101 , AS 18.66.100(c)(15) , AS 25.20.061 (3), or AS 33.16.150(f)(2);
    8. a judgment for unpaid rent or damage owed to a landlord by an eligible individual that was a tenant of the landlord; in this paragraph, “tenant” has the meaning given in AS 34.03.360 ;
    9. court-ordered forfeiture of an appearance or performance bond under AS 12.30.075 .
  3. Claims listed in (b) of this section have priority in the order listed over other claims on a permanent fund dividend whether payments are sought through legal actions for the collection of debts or through assignments from the debtor.
  4. An assignment of or levy, execution, garnishment, attachment, or other remedy for the collection of debt applied to a dividend for a year may not be accepted by the department before April 1 of that same year. AS 09.38.080(c) and 09.38.085 do not apply to a levy on a permanent fund dividend. Upon receipt of a writ of execution under (a) of this section or another court order, the commissioner shall deliver to the court that portion of the dividend executed upon along with the case name and number. At the time payment is made to the court, the department shall send to the individual at the address provided in the individual’s dividend application and to the court that issued the writ or order a notice that contains
    1. notification that all or part of the individual’s dividend has been seized under a writ of execution or court order;
    2. the name and address of the court that issued the writ or order;
    3. the case number for which the writ or order was issued;
    4. the amount seized under the writ or order; and
    5. notification that the individual has 30 days from the date the notice is mailed in which to file with the court an objection to the seizure if a mistake has been made.

History. (§ 1 ch 102 SLA 1982; am § 1 ch 157 SLA 1984; am § 1 ch 57 SLA 1985; am § 67 ch 138 SLA 1986; am § 3 ch 26 SLA 1989; am § 3 ch 198 SLA 1990; am §§ 3, 4 ch 52 SLA 1992; am § 5 ch 113 SLA 1994; am § 3 ch 34 SLA 1995; am § 9 ch 59 SLA 1996; am § 63 ch 64 SLA 1996; am § 1 ch 89 SLA 1998; am § 92 ch 21 SLA 2000; am § 2 ch 43 SLA 2004; am §§ 2, 3 ch 41 SLA 2008; am §§ 2, 3 ch 79 SLA 2008; am § 12 ch 27 SLA 2014; am § 161 ch 36 SLA 2016)

Revisor’s notes. —

In 2004, “child support enforcement agency” was changed to “child support services agency” in (b) of this section in accordance with § 12(a), ch. 107, SLA 2004. In 2006, in (b)(5)(B) of this section “AS 09.65.255 ” was substituted for “AS 34.50.020 ” to reflect the 2006 renumbering of AS 34.50.020 .

Formerly AS 43.23.065 ; renumbered in 2018, at which time “AS 43.23.160 ” was substituted for “AS 43.23.067 ” to reflect the renumbering of that section.

Cross references. —

For property exempt from execution generally, see AS 09.38. For effect of the 2008 amendments of subsections (a) and (d) on Alaska Rule of Civil Procedure 89, see § 5, ch. 41, SLA 2008 and § 4, ch. 79, SLA 2008.

For a statement of legislative intent regarding taxes collected under this section, see sec. 1, ch. 36, SLA 2016, in the 2016 Temporary and Special Acts.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Effect of amendments. —

The 2016 amendment, effective July 12, 2016, added (b)(9), and made a related change.

Notes to Decisions

Cited in

In re Browne, 101 B.R. 188 (Bankr. D. Alaska 1989); Camacho v. United States (In re Camacho), 177 B.R. 667 (Bankr. D. Alaska 1994).

Sec. 43.23.150. Claims on reimbursement for court-ordered treatment.

  1. AS 09.38 does not apply to permanent fund dividends taken under AS 47.12.155(c) . Notwithstanding AS 09.35, execution on a dividend claimed under AS 47.12.155(c) is accomplished by delivering a certified claim to the department containing the following information:
    1. the name and social security number of the individual whose dividend is being claimed;
    2. the amount the individual owes on the reimbursement claim; and
    3. a statement that
      1. the Department of Health and Social Services has notified the individual that future permanent fund dividends of the individual will be taken to satisfy the reimbursement claim;
      2. the individual was notified of the right to request a hearing and allowed 30 days after the date of the notice described in (A) of this paragraph to request the Department of Health and Social Services to hold a hearing on the reimbursement claim;
      3. the reimbursement claim has not been contested, or, if contested, that the issue has been resolved in favor of the Department of Health and Social Services; and
      4. if the reimbursement claim has been contested and resolved in favor of the Department of Health and Social Services, no appeal is pending, the time limit for filing an appeal has expired, or the appeal has been resolved in favor of the Department of Health and Social Services.
  2. The Department of Health and Social Services shall notify the individual if a dividend is claimed under (a) of this section. The notice shall be sent to the address provided in the individual’s permanent fund dividend application and must provide the following information:
    1. the amount of the reimbursement claim;
    2. notice that the permanent fund dividend, or that portion of the permanent fund dividend that does not exceed the amount of the reimbursement claim, shall be paid to the Department of Health and Social Services; and
    3. notification that the individual has a right to request a hearing and has 30 days after the date the notice is mailed in which to file with the Department of Health and Social Services an objection to the dividend claim if a mistake has been made.
  3. AS 44.62.330 44.62.630 apply to a hearing requested by an individual under (b)(3) of this section.

History. (§ 1 ch 144 SLA 1996)

Revisor’s notes. —

In 1996, in subsection (a), “AS 47.12.155(c) ” was substituted for “AS 47.10.079(c)” under § 7, ch. 144, SLA 1996.

Formerly AS 43.23.066 ; renumbered in 2018.

Sec. 43.23.160. Claims of defaulted education loans.

  1. AS 09.38 does not apply to a permanent fund dividend taken under AS 14.43.145 . Notwithstanding AS 09.35, the Alaska Commission on Postsecondary Education may take a permanent fund dividend under AS 14.43.145 by delivering a claim to the department certifying the following information:
    1. the name and social security number of the individual whose dividend is being claimed;
    2. the amount the individual owes on a loan awarded under AS 14.43; and
    3. a statement that the loan is in default under AS 14.43.145, or, if the individual has requested review of the status of the loan under AS 14.43.145(c) , that a final determination has been made that the loan is in default.
  2. The Alaska Commission on Postsecondary Education shall notify the individual of a claim under (a) of this section. The notice shall be sent to the address provided in the individual’s permanent fund dividend application and must provide the following information:
    1. the amount of the claim;
    2. notice that the amount of the permanent fund dividend up to the amount of the claim shall be paid to the Alaska Commission on Postsecondary Education to be credited against the individual’s loan balance; and
    3. the individual’s right to a hearing under (c) of this section.
  3. Within 30 days after the date of the notice under (b) of this section, the individual may request a hearing. AS 44.62.330 44.62.630 apply to a hearing under this section. At the hearing, the borrower has the burden to show that
    1. the commission has not sent a notice of default in compliance with AS 14.43.145(b) ;
    2. the notice of default has been rescinded after review under AS 14.43.145(c) ; or
    3. the amount owed by the borrower is less than the amount claimed from the permanent fund dividend.
  4. If the amount owed by the borrower is determined under (c) of this section to be some amount greater than $0, but less than the amount claimed, the commission may amend its claim to the amount determined to be owing.

History. (§ 18 ch 92 SLA 1987; am §§ 5, 6 ch 52 SLA 1992; am § 17 ch 54 SLA 1997)

Revisor’s notes. —

Formerly AS 43.23.067 ; renumbered in 2018.

Sec. 43.23.170. Claims on defaulted public assistance overpayment.

  1. AS 09.38 does not apply to permanent fund dividends taken under AS 47.05.080(b) . Notwithstanding AS 09.35, execution on a dividend claimed under AS 47.05.080(b) is accomplished by delivering a certified claim to the department containing the following information:
    1. the name and social security number of the individual whose dividend is being claimed;
    2. the amount the individual owes on the overpayment claim; and
    3. a statement that
      1. the Department of Health and Social Services has notified the individual that future permanent fund dividends of the individual will be taken to satisfy the overpayment claim;
      2. the individual was notified of the right to request a hearing and allowed 30 days from the date of the notice under (A) of this paragraph to request the Department of Health and Social Services to hold a hearing on the overpayment claim;
      3. the overpayment claim has not been contested, or, if contested, that the issue has been resolved in favor of the Department of Health and Social Services; and
      4. if the overpayment claim has been contested and resolved in favor of the Department of Health and Social Services, no appeal is pending, the time limit for filing an appeal has expired, or the appeal has been resolved in favor of the Department of Health and Social Services.
  2. The Department of Health and Social Services shall notify the individual if a dividend is claimed under (a) of this section. The notice shall be sent to the address provided in the individual’s permanent fund dividend application and must provide the following information:
    1. the amount of the overpayment claim;
    2. notice that the amount of the permanent fund dividend that does not exceed the amount of the overpayment claim shall be paid to the Department of Health and Social Services; and
    3. notification that the individual has a right to request a hearing and has 30 days from the date the notice is mailed in which to file with the Department of Health and Social Services an objection to the dividend claim if a mistake has been made.
  3. AS 44.62.330 44.62.630 apply to a hearing requested by an individual under (b)(3) of this section.

History. (§ 1 ch 35 SLA 1995)

Revisor’s notes. —

Formerly AS 43.23.068 ; renumbered in 2018.

Sec. 43.23.180. Claims for amounts owed under the Alaska Employment Security Act.

  1. AS 09.38 does not apply to permanent fund dividends taken by the Department of Labor and Workforce Development for a claim for payment of money owed under AS 23.20 (Alaska Employment Security Act). Notwithstanding AS 09.35, execution on a dividend claimed under this section is accomplished by delivering a certified claim to the Department of Revenue containing the following information:
    1. the name and social security number of the individual whose dividend is being claimed; if the Department of Labor and Workforce Development does not have access to the individual’s social security number for this purpose, the department may supply other identification information authorized under regulations to make a claim under AS 43.23.140 ;
    2. the amount the individual owes on the claim under AS 23.20;
    3. a statement that
      1. the Department of Labor and Workforce Development has notified the individual that future permanent fund dividends of the individual will be taken to satisfy the claim under AS 23.20;
      2. the individual was notified of the right to request a hearing under AS 23.20 and the Department of Labor and Workforce Development has allowed the individual at least 30 days after the date of the notice described in (A) of this paragraph to request a hearing on the claim;
      3. the claim under AS 23.20 has not been contested, or, if contested, the issue has been resolved in favor of the Department of Labor and Workforce Development; and
      4. if the claim under AS 23.20 has been contested and resolved in favor of the Department of Labor and Workforce Development, an appeal is not pending, the time limit for filing an appeal has expired, or the appeal has been resolved in favor of the department.
  2. The Department of Labor and Workforce Development shall notify the individual if a dividend is claimed under (a) of this section. The notice shall be sent to the mailing address provided in the individual’s permanent fund dividend application and must provide the following information:
    1. the amount of the claim under AS 23.20;
    2. notice that the permanent fund dividend, or that portion of the permanent fund dividend that does not exceed the amount of the claim under AS 23.20, shall be paid to the Department of Labor and Workforce Development in accordance with priorities established in state law;
    3. notice that the individual has a right to request a hearing and has a specific time after the date that the notice is mailed in which to file with the Department of Labor and Workforce Development an objection to paying the claim from the individual’s permanent fund dividend.
  3. Except as provided in (d) of this section, AS 44.62.330 44.62.630 apply to a hearing requested by an individual under (b) of this section. The hearing
    1. is limited to issues of identity of the individual and whether an amount is still owing in the claim under AS 23.20; and
    2. may be conducted telephonically or in writing.
  4. If the Department of Labor and Workforce Development has a notification or hearing procedure established in statute or regulation, the department may instead use that notification and hearing procedure so long as
    1. the procedure provides at least the minimum time for notice specified in (a)(3)(B) of this section for the individual to request a hearing;
    2. the notice includes the statements required by (b) of this section; and
    3. the hearing is limited to the issues specified in (c)(1) of this section.
  5. The Department of Labor and Workforce Development may adopt regulations to implement this section under AS 44.62 (Administrative Procedure Act).
  6. In a claim for payment under this section, the Department of Labor and Workforce Development may include only fines, penalties, overpayments, attorney fees, costs, and other amounts that
    1. are owed the department under other provisions of state law under which the claim under AS 23.20 is being made; and
    2. have been established by court judgment or administrative order.

History. (§ 2 ch 64 SLA 2000)

Revisor’s notes. —

Formerly AS 43.23.072 ; renumbered in 2018, at which time “AS 43.23.140 ” was substituted for “AS 43.23.065 ” to reflect the renumbering of that section.

Administrative Code. —

For employment security, see 8 AAC 85.

Sec. 43.23.190. Claims of the University of Alaska.

  1. AS 09.38 does not apply to a permanent fund dividend taken under AS 14.40.251 . Notwithstanding AS 09.35, the University of Alaska may take a permanent fund dividend under AS 14.40.251 by delivering a claim to the department certifying the following information:
    1. the name and social security number of the individual whose dividend is being claimed;
    2. the amount the individual owes the university; and
    3. a statement that
      1. the amount claimed is in default under AS 14.40.251;
      2. the university has notified the individual that future permanent fund dividends will be taken to satisfy the claim;
      3. the individual was notified of the right to request a hearing and allowed 30 days after the date of the notice described in (B) of this paragraph to request the university to hold a hearing on the claim;
      4. the claim has not been contested or, if contested, the issue has been resolved in favor of the university; and
      5. if the claim has been contested and resolved in favor of the university, no appeal is pending, the time limit for filing an appeal has expired, or the appeal has been resolved in favor of the university.
  2. The University of Alaska shall notify the individual of a claim under (a) of this section. The notice shall be sent to the address provided in the individual’s permanent fund dividend application and must provide the following information:
    1. the amount of the claim;
    2. notice that the amount of the permanent fund dividend up to the amount of the claim shall be paid to the university to be credited against the individual’s default balance; and
    3. notice of the individual’s right to a hearing under (c) of this section.
  3. Within 30 days after the date of the notice under (b) of this section, the individual may request a hearing. AS 44.62.330 44.62.630 apply to a hearing under this subsection. At the hearing, the individual has the burden to show that
    1. the university has not sent a notice of default in compliance with AS 14.40.251(b) ;
    2. the notice of default has been rescinded after review under AS 14.40.251(c) ; or
    3. the amount owed by the individual is less than the amount claimed from the permanent fund dividend.
  4. If the amount owed is determined under (c) of this section to be some amount greater than $0, but less than the amount claimed, the University of Alaska may amend its claim to the amount determined to be owing.

History. (§ 3 ch 43 SLA 2004)

Revisor’s notes. —

Formerly AS 43.23.073 ; renumbered in 2018.

Sec. 43.23.200. Assignments.

  1. Except as provided in (b) of this section, a person eligible to receive a permanent fund dividend may not assign the right to the dividend. An attempted assignment of the right to receive a permanent fund dividend is against public policy and is void.
  2. A person may assign the right to receive a permanent fund dividend to a federal, state, or municipal government agency or to a court.
  3. For purposes of this section, “state agency” includes a regional housing authority created under AS 18.55.996 .

History. (§ 15 ch 4 SLA 1992; am § 17 ch 4 SLA 1992)

Revisor’s notes. —

Subsection (c) enacted as AS 43.23.095(b). Renumbered in 1992.

Formerly AS 43.23.069 ; renumbered in 2018.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Notes to Decisions

Applied in

Berger v. State, 910 P.2d 581 (Alaska 1996).

Sec. 43.23.210. Fees for processing claims and assignments.

The department shall by regulation adopted under AS 44.62 (Administrative Procedure Act) establish fees for processing claims on dividends received by the department under AS 43.23.140 , 43.23.160 , or 43.23.180 and for processing assignments of dividends received by the department under AS 43.23.200(b) . The fees shall cover the administrative expenses of the department associated with the claims and assignments. Fees shall be deducted from the amount of the dividend remaining after payment of the portion claimed or assigned, or, if the entire dividend is claimed or assigned, the fees shall be deducted before the dividend is paid to the creditor or assignee.

History. (§ 1 ch 11 SLA 1994; am § 1 ch 64 SLA 2000)

Revisor’s notes. —

Formerly AS 43.23.071 ; renumbered in 2018, at which time references to other renumbered sections were conformed.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Article 4. Dividend Raffle.

Sec. 43.23.220. Education endowment fund.

  1. The education endowment fund is established as a separate account in the general fund. The fund consists of appropriations from
    1. donations to the fund under AS 43.23.230(b) ;
    2. transfers to the fund under AS 43.23.230(a) ;
    3. interest earned on the fund; and
    4. any other money appropriated to the fund.
  2. The commissioner is the fiduciary of the fund. In managing the fund, the commissioner shall
    1. have the same powers and duties as provided in AS 37.10.071 ; and
    2. invest the fund in a manner likely to achieve at least a four percent nominal return over a five-year period to meet the objectives of the fund.
  3. In managing the fund, the commissioner shall
    1. consider the status of the fund’s capital and the income generated on both current and probable future bases;
    2. determine the appropriate investment objectives;
    3. establish investment policies to achieve the objectives; and
    4. act only in regard to the best financial interests of the fund.
  4. On July 1 of each year, the commissioner shall
    1. determine the fund balance for the previously closed fiscal year, including the earnings of the fund; and
    2. when the average market value for that fiscal year exceeds $1,000,000,000, transfer 4.5 percent of the average fiscal-year-end market value of the balance of the fund for the last five fiscal years, including the fiscal year just ended, and including any unrealized gains and losses, to the Department of Education and Early Development for distribution as supplemental grants to school districts according to the average daily membership for each district adjusted under AS 14.17.410(b)(1)(A) — (D), subject to appropriation.
  5. Money appropriated to the fund does not lapse.

History. (§ 8 ch 80 SLA 2018)

Revisor’s notes. —

Enacted as AS 43.23.063; renumbered in 2018.

Effective dates. —

Section 10, ch. 80, SLA 2018 makes this section effective January 1, 2019.

Sec. 43.23.230. Dividend raffle fund; dividend donations to the dividend raffle fund; drawing.

  1. The dividend raffle fund is established as an account in the general fund. The commissioner shall manage the fund. Interest and other income received on money in the fund shall be separately accounted for and shall be appropriated to the fund. The fund consists of donations appropriated to the fund under (c) of this section. The commissioner shall use the dividend raffle fund, without further appropriation, to pay for prizes as set out in (d) of this section and may use up to two percent of the balance of the fund but not more than $500,000 from the fund each fiscal year to pay the cost of administering the fund and for promotion and advertisement of the fund. When the balance of the dividend raffle fund exceeds $300,000,000 at the end of a fiscal year, the commissioner shall transfer the amount above $300,000,000 to the education endowment fund established in AS 43.23.220 . Money donated to the fund does not lapse.
  2. Notwithstanding AS 43.23.200 , the department shall provide on the Alaska permanent fund dividend application an option for an applicant who is 18 years of age or older to direct that all or a portion of the applicant’s dividend payment be donated for educational purposes and to enter the permanent fund dividend raffle as provided in (c) of this section. A donation under this section may be $100 or more, in increments of $100, up to the total amount of the permanent fund dividend that the applicant is entitled to receive.
  3. Of the donations received in a year under (b) of this section, the legislature shall appropriate 25 percent to the education endowment fund established in AS 43.23.220 and shall appropriate 25 percent to the dividend raffle fund. The legislature shall appropriate the remaining 50 percent of the donations received under (b) of this section to the Department of Education and Early Development for distribution as supplemental grants to school districts according to the average daily membership for each district adjusted under AS 14.17.410(b)(1)(A) — (D).
  4. At the beginning of each year, the commissioner shall conduct a public drawing to award prizes from the dividend raffle fund. Each $100 donation as provided in (b) of this section entitles a person to one entry into the raffle. The prizes for the raffle shall be as follows:
    1. the first name drawn receives an amount equal to eight percent of the balance of the dividend raffle fund;
    2. the second name drawn receives an amount equal to four percent of the balance of the dividend raffle fund;
    3. the third name drawn receives an amount equal to two percent of the balance of the dividend raffle fund; and
    4. the fourth name drawn receives an amount equal to one percent of the balance of the dividend raffle fund.
  5. Nothing in this section creates a dedicated fund.

History. (§ 8 ch 80 SLA 2018)

Revisor’s notes. —

Enacted as AS 43.23.064; renumbered in 2018, at which time references to other renumbered sections were conformed.

Effective dates. —

Section 10, ch. 80, SLA 2018 makes this section effective January 1, 2019.

Article 5. Relationship to other Programs.

Sec. 43.23.240. Eligibility for public assistance.

  1. In determining the eligibility of an individual under a public assistance program administered by the Department of Health and Social Services in which eligibility for assistance is based on financial need, the Department of Health and Social Services may not consider a permanent fund dividend as income or resources received by the recipient of public assistance or by a member of the recipient’s household unless required to do so by federal law or regulation.  The Department of Health and Social Services shall notify all recipients of public assistance of the effects of receiving a permanent fund dividend.
  2. An individual who is denied medical assistance under 42 U.S.C. 1396 — 1396p (Social Security Act, Title XIX) solely because of the receipt of a permanent fund dividend by the individual or by a member of the individual’s household is eligible for state-funded medical assistance under AS 47.25.120 47.25.300 (general relief assistance program). The individual is entitled to receive, for a period not to exceed four months, the same level of medical assistance as the individual would have received under 42 U.S.C. 1396 — 1396p (Social Security Act, Title XIX) had there been no permanent fund dividend program.
  3. An individual who is denied assistance solely because permanent fund dividends received by the individual or by a member of the individual’s household are counted as income or resources under federal law or regulation is eligible for cash assistance under AS 47.25.120 47.25.300 (general relief assistance program). Notwithstanding the limit in AS 47.25.130 , the individual is entitled to receive, for a period not to exceed four months, the same amount as the individual would have received under other public assistance programs had there been no permanent fund dividend program.

History. (§ 1 ch 102 SLA 1982)

Revisor’s notes. —

Formerly AS 43.23.075 ; renumbered in 2018.

Cross references. —

For a temporary provision relating to the permanent fund dividend and eligibility for public assistance and medical assistance during the novel coronavirus disease (COVID-19) public health disaster emergency declared on March 11, 2020 or until November 15, 2020, whichever first occurs, see § 22, ch. 10, SLA 2020 in the 2020 Temporary and Special Acts.

Administrative Code. —

For permanent fund dividend distribution, see 7 AAC 38.

Sec. 43.23.250. Eligibility for state programs.

A program administered by the state or any of its instrumentalities or municipalities, the eligibility for which is based on financial need, may not consider a permanent fund dividend as income or resources unless required to do so by federal law or regulation.

History. (§ 1 ch 102 SLA 1982)

Revisor’s notes. —

Formerly AS 43.23.085 ; renumbered in 2018.

Cross references. —

For a temporary provision relating to eligibility for a state program based on financial need during the novel coronavirus disease (COVID-19) public health disaster emergency or until November 15, 2020, whichever first occurs, see § 22(d), ch. 10, SLA 2020 in the 2020 Temporary and Special Acts.

Administrative Code. —

For permanent fund dividend distribution, see 7 AAC 38.

Article 6. Enforcement; Penalties.

Sec. 43.23.260. Subpoena power.

  1. The commissioner or the commissioner’s designee at the director level may issue subpoenas to compel the production of books, papers, correspondence, memoranda, and other records considered necessary as evidence in connection with an investigation under or the administration of this chapter.
  2. In case of refusal to obey a subpoena issued to any person under (a) of this section, the superior court may, upon application by the department, issue an order requiring the person to appear before the department to produce evidence if ordered. Failure to obey the order of the court is punishable as contempt.
  3. A person who, without just cause, fails or refuses to produce books, papers, correspondence, memoranda, and other records, if it is in the person’s power to do so, in obedience to a subpoena of the department or an authorized representative of it, upon conviction, is punishable by a fine of not more than $200, or by imprisonment for not more than 60 days, or by both. Each day the failure or refusal continues is a separate offense.

History. (§ 1 ch 97 SLA 2004)

Revisor’s notes. —

Formerly AS 43.23.033 ; renumbered in 2018.

Sec. 43.23.270. Penalties and enforcement.

  1. In addition to any criminal penalties imposed by state law, if an individual is convicted of a crime in connection with a false statement made in a certification required under AS 43.23.015 , and the conviction is not reversed, that individual forfeits all permanent fund dividends paid and is not eligible for a future permanent fund dividend.
  2. If the commissioner determines that a permanent fund dividend should not have been claimed by or paid to an individual, the commissioner may use all collection procedures or remedies available for collection of taxes under this title to recover the payment of a permanent fund dividend that was improperly made. A notice of an improperly paid dividend must be sent to the individual within
    1. three years after the improper payment is sent; or
    2. six years after the improper payment is sent if the commissioner determines that the individual exercised gross negligence or recklessly disregarded a material fact in connection with a false statement made in an application.
  3. In addition to any criminal penalties imposed by state law, if the department finds that an individual, in claiming a permanent fund dividend, or an individual, in certifying another person’s eligibility, wilfully misrepresents, exercises gross negligence with respect to, or recklessly disregards a material fact pertaining to, eligibility, the department may issue an order against the individual for the
    1. forfeiture of the dividend;
    2. imposition of a civil fine of up to $3,000; and
    3. loss of eligibility to receive the next five dividends following the forfeited dividend.
  4. If notice is not sent within the time required under (b) of this section, administrative or judicial proceedings may not be commenced for recovery of an improperly paid dividend. The time limitations of (b) of this section do not apply if a dividend is forfeited under (a) of this section or if it is more probable than not that an individual has committed a crime in connection with a false statement made in an application.
  5. The provisions of AS 43.23.015(g) and (i) apply to a request for review of, and to appeal of, a decision under (c) of this section by an individual aggrieved by the decision. When all appeals have been exhausted under this chapter or the time when all of the appeals that could have been taken has expired, the order issued imposing a civil fine, forfeiture, or loss of eligibility becomes final and enforceable in the same manner as a judgment of the court.

History. (§ 1 ch 102 SLA 1982; am § 3 ch 159 SLA 1988; am §§ 12, 13 ch 4 SLA 1992; am §§ 23, 24 ch 42 SLA 2006)

Revisor’s notes. —

Formerly AS 43.23.035 ; renumbered in 2018.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Editor’s notes. —

Section 34(b), ch. 42, SLA 2006, provides that the 2006 amendment of (c) of this section and (e) of this section “apply only with respect to applications filed on or after July 1, 2006,” and that subsection (c) “as it read before July 1, 2006, applies with respect to applications filed before July 1, 2006.”

Notes to Decisions

Cited in

Department of Revenue, Permanent Fund Dividend Div. v. Wilder, 929 P.2d 1280 (Alaska 1997).

Article 7. General Provisions.

Sec. 43.23.295. Definitions.

In this chapter,

  1. “Alaska permanent fund” means the fund established by art. IX, § 15 of the state constitution;
  2. “disabled” means physically or mentally unable to complete and sign an application due to a serious emotional disturbance, visual, orthopedic, or other health impairment, or developmental disability that is attributable to intellectual disability, cerebral palsy, epilepsy, autism, or other cause; “disabled” does not mean “incompetent”;
  3. “dividend fund” means the fund established by AS 43.23.045 ;
  4. “individual” means a natural person;
  5. “permanent fund dividend” means a right to receive a payment from the dividend fund;
  6. “qualifying year” means the year immediately preceding January 1 of the current dividend year;
  7. “state resident” means an individual who is physically present in the state with the intent to remain indefinitely in the state under the requirements of AS 01.10.055 or, if the individual is not physically present in the state, intends to return to the state and remain indefinitely in the state under the requirements of AS 01.10.055 ;
  8. “year” means a calendar year.

History. (§ 1 ch 102 SLA 1982; am § 3 ch 55 SLA 1983; am § 6 ch 68 SLA 1990; am § 38 ch 168 SLA 1990; am § 16 ch 4 SLA 1992; am § 2 ch 73 SLA 1996; am §§ 7, 8 ch 44 SLA 1998; am § 13 ch 42 SLA 2013)

Revisor’s notes. —

Formerly AS 43.23.095 ; renumbered in 2018.

Administrative Code. —

For permanent fund dividend program, see 15 AAC 23, art. 1.

Notes to Decisions

Equal protection. —

Argument of claimant, denied permanent fund dividend because of absence from state for more than 180 days, that he was not provided the same benefits as members of groups who were absent for one of the (former) listed excusable absences, and as such his equal protection rights were violated, was without merit. Church v. Department of Revenue, 973 P.2d 1125 (Alaska 1999).

Petitioner’s absence from the state for more than 180 days in a year for an “inexcusable” reason rendered him ineligible for permanent fund dividends (PFDs), even though he would have been eligible had he been a state employee, since the rules bore a fair and substantial relationship to the legitimate governmental objectives of promoting state residency, preventing fraud in the distribution of PFDs, and simplifying adjudication procedures. Eldridge v. Department of Revenue, 988 P.2d 101 (Alaska 1999).

Procedural due process. —

Claimant who was ineligible for a permanent fund dividend as a matter of law because he was out of the state for more than 180 days, and whose absence did not fit into one of the (former) statutory or regulatory excusable absence categories, was not denied his procedural due process rights when his appeal was denied in a summary adjudication, since, in the absence of a factual dispute, he was not entitled to an evidentiary hearing. Church v. Department of Revenue, 973 P.2d 1125 (Alaska 1999).

Substantive due process. —

The statutory and regulatory scheme denying permanent fund dividend to claimant absent from the state for more than 180 days, whose absence did not fit one of the (former) excused categories, does not violate substantive due process. Church v. Department of Revenue, 973 P.2d 1125 (Alaska 1999).

Right of interstate travel. —

The permanent fund dividend regulations and statutes are bona fide requirements which ensure that benefits provided for residents are enjoyed only by residents, and as such do not violate the constitutional right of interstate travel. Church v. Department of Revenue, 973 P.2d 1125 (Alaska 1999).

Defining permanent resident. —

The legislature has given broad discretion to the commissioner to determine the factors which define a permanent resident. Church v. Department of Revenue, 973 P.2d 1125 (Alaska 1999).

Requirement of intent to return to state. —

A serviceman who was absent more than five years failed to establish intent to return to the state where the evidence showed that he returned for a brief visit only once in a 12-year period, he maintained only motor vehicle registration, voter registration, driver’s license and bar membership in Alaska, and he had not requested reassignment to Alaska. Department of Revenue, Permanent Fund Dividend Div. v. Wilder, 929 P.2d 1280 (Alaska 1997).

Prohibiting permanent fund distribution to illegal aliens. —

An administrative regulation, which restricted permanent fund dividend eligibility to aliens with resident alien or refugee status, fell within the delegated authority of the commissioner of revenue to regulate the eligibility of individuals for permanent fund dividends. The regulation was also constitutional under the state and federal equal protection clauses. Limiting the distribution of dividends to those who are lawful permanent residents is rationally related to legitimate objectives of the dividend program. Department of Revenue, Permanent Fund Dividend Div. v. Cosio, 858 P.2d 621 (Alaska 1993).

Validity of regulation. —

Since the purpose of former paragraph (8) (now paragraph 7) is to ensure that permanent fund dividends are only given to permanent residents and a legitimate function of corresponding regulations is to ease the administrative burdens of determining eligibility, 15 AAC 23.163, requiring that absences do not exceed 180 days, is consistent with its statutory purpose. Church v. Department of Revenue, 973 P.2d 1125 (Alaska 1999).

Absence for medical treatment. —

“Medical treatment”, as defined in this section, does not mean merely an absence from the state on the advice of one’s doctor, but implies some specific therapeutic application by medical personnel; thus, applicants who were outside Alaska for nearly two-thirds of the year-long eligibility period for the permanent fund dividend did not qualify for an allowable absence for medical treatment, although their medical treatment may have been medically advised. Brodigan v. Alaska Dep't of Revenue, 900 P.2d 728 (Alaska 1995).

A regulation, by allowing an absence for applicants receiving medical treatment if the absence “does not include a seasonal or permanent change of residence,” assures that eligibility is limited to those residents who are temporarily outside actively attempting to treat their medical conditions, and is consistent with the language and purpose of this section. Brodigan v. Alaska Dep't of Revenue, 900 P.2d 728 (Alaska 1995).

State resident. —

A military family did not meet the residency requirements where they had been absent from Alaska for more than five years, giving rise to the presumption that they did not intend to return and remain in Alaska. The active duty “allowable absence” provision of AS 43.23.008(a)(3) did not apply. Harrod v. State, 255 P.3d 991 (Alaska 2011).

Military spouse. —

Since an absence for military service was allowable under the definition of “state resident” in AS 43.23.095 prior to its amendment effective January 1, 1999, and so was “accompanying an eligible individual as the spouse...of the eligible individual” under 15 AAC 23.163, a military spouse absent from the state was a resident because she met both the intent and the allowable absence requirements. Department of Revenue, Permanent Fund Dividend Div. v. Hale, 978 P.2d 1276 (Alaska 1999).

Dividends properly withheld. —

The state department of revenue properly withheld appellant’s permanent fund dividends (PFDs) for 1992, 1993, and 1994 because the absences he reported from his primary Alaska residence exceeded the 180-day period allowed under former AS 43.23.005(a) , 43.23.095 (8), and their implementing regulations. Schikora v. Department of Revenue, 7 P.3d 938 (Alaska 2000).

Quoted in

Department of Revenue v. Gazaway, 793 P.2d 1025 (Alaska 1990); Ross v. State, 286 P.3d 495 (Alaska 2012).

Stated in

Heller v. Dep't of Revenue, 314 P.3d 69 (Alaska 2013).

Cited in

Handley v. State, Dep't of Revenue, 838 P.2d 1231 (Alaska 1992).

Chapter 25. Alaska Industrial Incentive Act.

[Repealed, § 63 ch 37 SLA 1986.]

Chapter 26. Industrial Incentive Tax Credits.

[Repealed, § 64 ch 37 SLA 1986.]

Chapter 30. Inheritance and Transfer Taxes.

[Repealed, § 1 ch 24 SLA 1970.]

Chapter 31. Estate Tax Law of Alaska.

Collateral references. —

42 Am. Jur. 2d, Inheritance, Estate, and Gift Taxes, § 1 et seq.

85 C.J.S., Taxation, §§ 1930 et seq.

Rights and remedies as regards estate or succession tax paid or payable by executor or administrator on property not passing under will or coming into his possession. 1 ALR2d 978.

Succession or estate tax as affected by estate by entirety or other joint estate with right of survivorship. 1 ALR2d 1101.

Illegitimate child as “lineal descendant” and “child” within the provisions of inheritance, succession, or estate tax statutes respecting exemption and tax rates. 3 ALR2d 166.

Valuation of property for purposes of estate, succession, or gift tax as affected by contract or bylaw specifying price at which property may or must be sold, purchased, or offered. 5 ALR2d 1122.

Liability of life insurer which pays proceeds of policy direct to beneficiary, for the portion of estate or succession tax attributable to such proceeds. 10 ALR2d 657.

Inheritance, succession, or estate tax on property covered by power of appointment as affected by location of property, or residence of parties, outside the taxing state or country. 19 ALR2d 1415.

Inheritance, succession, or estate tax on property covered by power of appointment as affected by location of property, or residence of parties, outside the taxing state or country. 19 ALR2d 1415.

Valuation of corporate stock for purposes of succession, inheritance, or estate tax, as affected by quantity involved. 23 ALR2d 775.

Death or divorce of blood relative as affecting relationship by affinity for purposes of inheritance, succession, or estate tax. 26 ALR2d 271.

Estate tax consequences of reciprocal trusts. 38 ALR2d 522.

Statutory provision that specified fund or property shall be “exempt from taxation,” “exempt from any tax,” or the like, as exempting such property from estate or succession taxes. 47 ALR2d 999.

Children of adopted child, or adopted children of natural child, as “lineal descendants” within provisions of inheritance, succession, or estate tax statutes respecting exemption and tax rates. 51 ALR2d 854.

Accumulation of income in inter vivos trust in favor of third person as subject to estate or succession tax at settlor’s death. 55 ALR2d 415.

Applicability of dead man statute as applicable to proceedings to determine liability for succession, estate, or inheritance tax. 66 ALR2d 714.

Surviving husband or wife of child who died before decedent as “husband” or “wife” within succession tax law provision as to rates or exemptions. 81 ALR2d 1230.

Right to interest on tax refund or credit in absence of specific controlling statute. 88 ALR2d 823.

Inter vivos settlement of disputed claim as consideration within statutes excepting transfers for consideration from estate, succession, or inheritance tax. 13 ALR3d 657.

Renunciation of inheritance, devise, or legacy as affecting state inheritance, estate, or succession tax. 27 ALR3d 1354.

Valuation of corporate stock for purposes of state gift, inheritance, or estate tax, as affected by predetermined price in buy-out or first-option agreement among stockholders or with corporation. 58 ALR3d 1104.

Devise or bequest pursuant to testator’s contractual obligation as subject to estate, succession, or inheritance tax. 59 ALR3d 969.

Valuation of United States Treasury bonds for state inheritance or estate tax purposes. 62 ALR3d 1272.

Refund of state inheritance or estate tax where claims are proven against estate after tax was paid. 63 ALR3d 924.

Surviving spouse taking elective share as chargeable with estate or inheritance tax. 67 ALR3d 199.

Liability of income beneficiary of trust for proportionate share of estate or inheritance tax in absence of specific direction in statute, will, or other instrument. 67 ALR3d 273.

Ultimate burden of estate tax in absence of statute, will, or other provision. 68 ALR3d 714.

Liability of testamentary trustee for failure to assert claim against executor of testator’s estate for mistake resulting in overpayment of taxes. 68 ALR3d 1265.

Construction and effect of will provisions expressly relating to the burden of estate or inheritance taxes. 69 ALR3d 122.

Construction and effect of will provisions not expressly mentioning payment of death taxes but relied on as affecting the burden of estate or inheritance taxes. 70 ALR3d 630.

Construction and effect of provisions in nontestamentary instrument relied upon as affecting the burden of estate or inheritance taxes. 70 ALR3d 691.

Construction and application of statutes apportioning or prorating estate taxes. 71 ALR3d 247.

Remedies and practice under estate tax apportionment statutes. 71 ALR3d 371

Construction, and application of “pay-all-taxes” provision in will, as including liability of nontestamentary property for inheritance and estate taxes. 56 ALR5th 133.

Sec. 43.31.011. Tax upon estates of resident decedents.

A tax is imposed upon the transfer of the estate of a person who, at the time of death, was a resident of this state, the amount of which shall be computed as follows:

  1. Determine the amount of the credit allowable under the applicable federal revenue Act for estate, inheritance, legacy, and succession taxes actually paid to the several states.
  2. Determine for each of the other states the amount of all constitutionally valid estate, inheritance, legacy, and succession taxes, actually paid to each of the other states in respect to property owned by the decedent or subject to these taxes as a part of or in connection with the decedent’s estate.
  3. Determine for each other state in which property is located that is owned by the decedent or subject to estate, inheritance, legacy, or succession taxes as a part of or in connection with the decedent’s estate the proportion of the amount of the credit allowable under the applicable federal revenue Act for estate, inheritance, legacy, and succession taxes actually paid to the several states, as the value of the property taxable in that state bears to the value of the entire gross estate wherever situated.
  4. The amount of the tax is the amount of the allowable credit as determined in (1) of this section less the sum of the smaller figures of (2) or (3) of this section for each of the other states in which the decedent’s property is situated.  For example: The amount of allowable credit under the federal Act is $10,000 (relating to (1) in this section)

Amount of Tax Proportion of Credit Smaller of Actually Paid from Situs of Property (2) of (3) (relating to (2) of (relating to (3) of of this this section) this section) section State X $3,000 10%—$1,000 $1,000 State Y $1,000 15%—$1,500 $1,000 $2,000

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The Alaska estate tax is $10,000 minus $2,000 equalling $8,000.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.011. Renumbered in 1970.

Cross references. —

For priority of claims against estate, see AS 13.16.470 ; for payment of claims, see AS 13.16.480 ; for apportionment of taxes, see AS 13.16.610 .

Sec. 43.31.021. Tax upon estates of nonresident decedents.

A tax is imposed upon the transfer of real property situated in this state, upon tangible personal property having an actual situs in this state, upon intangible personal property having a business situs in this state and upon stocks, bonds, debentures, notes and other securities or obligations of corporations organized under the laws of this state, of a person who at the time of death was not a resident of this state but was a resident of the United States, the amount of which shall be a sum equal to that proportion of the amount of the credit allowable under the applicable federal revenue Act for estate, inheritance, legacy and succession taxes actually paid to the several states, as the value of the property taxable in this state bears to the value of the entire gross estate wherever situated.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.021. Renumbered in 1970.

Sec. 43.31.031. Tax upon estates of alien decedents.

  1. A tax is imposed upon the transfer of real property situated and tangible personal property having an actual situs in this state and upon intangible personal property physically present in this state of a person who at the time of death was not a resident of the United States, the amount of which is a sum equal to that proportion of the credit allowable under the applicable federal revenue Act for estate, inheritance, legacy, and succession taxes actually paid to the several states, as the value of the property taxable in this state bears to the value of the estate taxable by the United States wherever situated.
  2. For the purpose of this section, stock in a corporation organized under the laws of this state shall be considered physically present in this state. The amount receivable as insurance upon the life of a decedent who at the time of death was not a resident of the United States, and any money deposited with a person carrying on the banking business by or for the decedent who was not engaged in business in the United States at the time of death, is not for the purpose of this section, considered to be physically present in this state.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.031. Renumbered in 1970.

Sec. 43.31.041. Administration by Department of Revenue.

The department, except as otherwise provided, has jurisdiction and is charged with the administration and enforcement of the provisions of this chapter.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.041. Renumbered in 1970.

Sec. 43.31.051. Examination of books, papers, records, etc.

  1. The department, for the purpose of ascertaining the correctness of a return, or for the purpose of making a return where none has been made, may examine books, papers, records, or memoranda, bearing upon the matter required to be included in the return; may require the attendance of persons rendering the return or of an officer or employee of those persons, or of any person having knowledge in the premises, at a convenient place in the superior court in the judicial district in which the person resides, and may take testimony with reference to the matter required by law to be included in the return, and may administer oaths to these persons.
  2. If a person subpoenaed to appear under this chapter to testify, or to produce books, papers, or other data, refuses to do so, the superior court in the judicial district in which the person resides has jurisdiction by appropriate process to compel the attendance, testimony, or production of books, papers, or other data.

History. (§ 2 ch 24 SLA 1970; am § 25 ch 168 SLA 1990)

Revisor’s notes. —

Enacted as AS 43.30.051. Renumbered in 1970.

Sec. 43.31.061. Appointment, bonds and credentials of agents.

  1. The department may appoint and remove examiners and appraisers it considers necessary, these persons to have those duties and powers the department prescribes.  The compensation of these examiners and appraisers shall be as the department prescribes, and they shall be reimbursed for travel expenses as provided for state employees.
  2. The department may require the examiners, appraisers, and employees as it designates to give bond payable to the state for the faithful performance of their duties in that form and with those sureties as it determines, and all premiums on these bonds shall be paid by the state.
  3. All officers empowered by law to administer oaths or employees, examiners, and appraisers appointed by the department may administer an oath to persons giving testimony before them or to take the acknowledgment of a person in respect to the returns or reports required under this chapter.
  4. All employees, examiners, and appraisers appointed by the department shall have for identification purposes proper credentials issued by the department and exhibit them upon demand.

History. (§ 2 ch 24 SLA 1970; am § 55 ch 32 SLA 1971)

Revisor’s notes. —

Enacted as AS 43.30.061. Renumbered in 1970.

Sec. 43.31.071. Regulations.

The department may adopt regulations not inconsistent with this chapter as it considers necessary to enforce its provisions, and may adopt regulations as are or may be promulgated with respect to the estate tax provisions of the revenue Act of the United States insofar as they are applicable. The department may prescribe forms it considers proper for the administration of this chapter.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.071. Renumbered in 1970.

Sec. 43.31.081. Information confidential. [Repealed, § 3 ch 166 SLA 1976. For current law, see AS 43.05.230.]

Sec. 43.31.091. Actions by or against department.

The department may sue and be sued but may not be required to give supersedeas or other bond in any cause or court of this state.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.091. Renumbered in 1970.

Sec. 43.31.101. Special appraisers. [Repealed, § 56 ch 32 SLA 1971.]

Sec. 43.31.111. Notice of death or tax return.

The executor, within two months after the decedent’s death, or within a like period after qualifying as executor, shall submit a report of the death to the department on the form prepared and published by the department known as the preliminary notice and report. If a federal estate tax return is required by the applicable federal revenue Act, a copy of the preliminary notice filed with the federal government may be filed with the department in place of the preliminary notice and report.

History. (§ 2 ch 24 SLA 1970; am § 3 ch 20 SLA 2016)

Revisor’s notes. —

Enacted as AS 43.30.111. Renumbered in 1970.

Effect of amendments. —

The 2016 amendment, effective July 1, 2016, substituted “submit a report” for “give written notice”.

Sec. 43.31.121. Tax return in certain cases.

The executor of an estate required by the laws of the United States to file a federal estate tax return shall file with the department within 15 months from the date of death a return consisting of an executed copy of the federal estate tax return, and shall file with this return all supplemental data, if any, as may be necessary to determine and establish the correct tax under this chapter. This return shall be made in the case of every decedent who at the time of death was not a resident of the United States and whose gross estate includes any real property situated and tangible personal property having an actual situs in the state and intangible personal property physically present in the state.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.121. Renumbered in 1970.

Sec. 43.31.131. Failure to make return and extension.

If the federal taxing authorities grant an extension of time for filing a return the department shall allow a like extension of time for filing upon the filing by the executor of a copy of the federal extension with the department. An extension of time for filing a return does not operate to extend the time for payment of the tax. If a person fails to file a return at the time prescribed by law or files, wilfully or otherwise, a false or fraudulent return, the department shall make the return from its own knowledge and from information it can obtain through testimony or otherwise. A return so made by the department shall be prima facie good and sufficient for all legal purposes.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.131. Renumbered in 1970.

Sec. 43.31.141. When tax due, extension and interest.

The tax imposed by this chapter is due and payable 15 months after the decedent’s death and shall be paid by the executor to the department. If the department finds that the payment on the due date of tax or any part of the tax would impose undue hardship upon the estate, the department may extend the time for payment of any part, but no extension may be for more than one year and the aggregate of extensions with respect to an estate may not exceed five years from the due date. In that case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension unless a further extension is granted. If the time for the payment is extended, there shall be collected, as part of this amount, interest on the tax as provided in AS 43.05.225 (1) from the due date of the tax to the date the tax is paid.

History. (§ 2 ch 24 SLA 1970; am § 34 ch 113 SLA 1980; am § 4 ch 23 SLA 1991)

Revisor’s notes. —

Enacted as AS 43.30.141. Renumbered in 1970.

Sec. 43.31.151. Notice of deficiency in federal estate tax.

It is the duty of the executor to file with the department within 60 days after a final determination of a deficiency in federal estate tax has been made, written notice of the deficiency. If, based upon this deficiency and the ground for it, it appears that the amount of tax previously paid is less than the amount of tax owing, the difference together with interest at the rate of seven percent a year from the due date of the tax shall be paid upon notice and demand by the department. If the executor fails to give the notice required by this section, any additional tax owing may be assessed, or a proceeding in court for the collection of the tax may be begun without assessment at any time before the filing of notice or within 30 days after the delinquent filing of notice, notwithstanding the provisions of AS 43.05.260 .

History. (§ 2 ch 24 SLA 1970; § 117 ch 6 SLA 1984)

Revisor’s notes. —

Enacted as AS 43.30.151. Renumbered in 1970.

Sec. 43.31.161. Deficiency, hearing, and procedure. [Repealed, § 3 ch 166 SLA 1976. For taxpayer remedies, see AS 43.05.240.]

Sec. 43.31.171. Civil penalties. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.05.220.]

Sec. 43.31.181. Receipts for taxes.

The department shall issue to the executor, upon payment of the tax imposed by this chapter, receipts in triplicate, any of which is sufficient evidence of payment, and shall entitle the executor to be credited and allowed the amount of the receipt by a court having jurisdiction to audit or settle the accounts of the executor. If the executor files a complete return and makes written application to the department for determination of the amount of the tax and discharge from personal liability, the department, as soon as possible, and in any event within one year after receipt of the application, shall notify the executor of the amount of the tax, and upon payment of the tax the executor shall be discharged from personal liability for any additional tax thereafter found to be due, and is entitled to receive from the department a receipt in writing showing the discharge; however, the discharge does not operate to release the gross estate of the lien of additional tax that may thereafter be found to be due, while the title to the gross estate remains in the executor or in the heirs, devisees, or distributees; but after the discharge is given, no part of the gross estate is subject to lien or to any claim or demand for tax after the title to the estate has passed to a bona fide purchaser for value.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.181. Renumbered in 1970.

Sec. 43.31.191. Failure to pay tax.

  1. If a tax imposed by this chapter or any portion of the tax is unpaid within 90 days after it becomes due, and the time for payment is not extended, the department shall collect the tax, penalty and interest by using the remedy of distraint on real and personal property as set out in AS 43.20.270 or by issuing a warrant directed to the commissioner of public safety commanding the commissioner to
    1. levy upon and sell the real and personal property of the estate found in the state for the payment of the amount of the unpaid tax with interest and penalties, if any, as may have accrued or been assessed against it, together with the cost of executing the warrant; and
    2. return the warrant to the department and pay to it the money collected under it by a time to be specified in the warrant, not less than 60 days from the date of the warrant.
  2. The commissioner of public safety shall proceed upon the warrant in all respects, with like effect, in the manner prescribed by law for executions issued against property upon judgments of a court of record.  Alias and pluries warrants may issue from time to time as the department considers proper until the entire amount of the tax, deficiency, interest, penalties and costs have been recovered.

History. (§ 2 ch 24 SLA 1970; am § 58 ch 32 SLA 1971)

Revisor’s notes. —

Enacted as AS 43.30.191. Renumbered in 1970.

Sec. 43.31.201. Tax payable from entire estates and third persons.

If the tax or a part of the tax is paid or collected out of that part of the estate passing to or in possession of a person other than the executor in the capacity of executor, the person is entitled to a reimbursement out of a part of the estate still undistributed or by a just and equitable contribution by the person whose interest in the estate of the decedent would have been reduced if the tax had been paid before the distribution of the estate or whose interest in the estate is subject to an equal or prior liability for the payment of tax, debts, or other charges against the estate, it being the purpose and intent of this section that so far as is practical and unless otherwise directed by the will of the decedent, the tax shall be paid out of the estate before its distribution; but the department is not charged with enforcing contribution from a person.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.201. Renumbered in 1970.

Sec. 43.31.211. Lien for unpaid taxes. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.10.035(a).]

Sec. 43.31.221. Personal liability of executor.

If an executor makes distribution either in whole or in part of any of the property of an estate to the heirs, next of kin, distributees, legatees or devisees without having paid or secured the tax due the state under this chapter, or obtained the release of the property from the lien of the tax the executor becomes personally liable for the tax so due the state, or so much of it as remains due and unpaid, to the full extent of the full value of any property belonging to the person or estate which may come into the hands, custody, or control of the executor.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.221. Renumbered in 1970.

Sec. 43.31.230. Sale of real estate by executor to pay tax.

Every executor has the same right and power to take possession of or sell, convey and dispose of real estate as assets of the estate for the payment of the tax imposed by this chapter as the executor may have for the payment of the debts of the decedent.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.230. Renumbered in 1970.

Sec. 43.31.240. Actions to enforce payment.

Actions may be brought within the time or times specified in this chapter by the department to recover the amount of taxes, penalties and interest due under this chapter. The action shall be brought in the superior court where the estate is being or has been administered, or if no administration is had in this state, then in the appropriate court of the jurisdiction where any of the property of the estate is situated.

History. (§ 2 ch 24 SLA 1970; am § 59 ch 32 SLA 1971)

Revisor’s notes. —

Enacted as AS 43.30.240. Renumbered in 1970.

Sec. 43.31.250. No discharge of executor until tax paid.

No final account of an executor of the estate of a nonresident, nor of the estate of a resident where the value of the gross estate wherever situated exceeds $60,000 may be allowed by any court until the account shows, and the judge of the court finds, that the tax imposed by the provisions of this chapter upon the executor, which has become payable, has been paid. The certificate of the department of nonliability for tax or its receipt for the amount of tax certified is conclusive in proceedings as to the liability or the payment of the tax to the extent of the certificate.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.250. Renumbered in 1970.

Sec. 43.31.260. Agreements as to tax due.

For the purpose of facilitating the settlement and distribution of estates held by executors, the department may, on behalf of the state, agree upon the amount of taxes at any time due or to become due from the executor under the provisions of this chapter, and payment in accordance with the agreement is full satisfaction of the taxes to which the agreement relates.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.260. Renumbered in 1970.

Sec. 43.31.270. Time for assessment of tax. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.05.260.]

Sec. 43.31.280. Refunds of excess tax paid.

  1. When it appears upon the examination of a return made under this chapter or upon proof submitted to the department by the executor, that an amount of estate tax has been paid in excess of the tax legally due under this chapter, then the amount of overpayment, together with any overpayment of interest on it shall be refunded to the executor and this refund shall be made by the department as a matter of course regardless of whether the executor has filed a written claim for it, except that upon request of the department, the executor shall file with the department a conformed copy of any written claim for refund of federal estate tax which has been filed with the United States.
  2. Notwithstanding (a) of this section, no refund of estate tax may be made nor is any executor entitled to bring an action for refund of estate tax after the expiration of two years from the date of payment of the tax to be refunded unless there has been filed with the department written notice of administrative or judicial determination of the federal estate tax liability of the estate, whichever occurs last, and notice shall have been so filed not later than 60 days after determination has become final.
  3. In this section, an administrative determination shall be considered to have become final on the date of receipt by the executor or other interested party of the final payment to be made refunding federal estate tax or upon the last date on which the executor or any other interested party receives notice from the United States that an overpayment of federal estate tax has been credited by the United States against any liability other than federal estate tax of the estate.  A final judicial determination shall be considered to have occurred on the date on which a judgment entered by a court of competent jurisdiction and determining that there has been an overpayment of federal estate tax becomes final.
  4. Nothing in this section prevents an executor from bringing or maintaining an action in a court of competent jurisdiction within a period otherwise prescribed by law to determine any question bearing upon the taxable situs of property, the domicile of a decedent, or otherwise affecting the jurisdiction of the state to impose an inheritance or estate tax with respect to a particular item of property.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.280. Renumbered in 1970.

Sec. 43.31.290. Superior court judge to furnish names of decedents.

Each superior court judge shall, on or before the 10th day of every month, notify the department of the names of all decedents, the names and addresses of the respective executors, administrators or curators appointed, the amount of the bonds, if any, required by the court, and the probable value of the estates, in all estates of decedents whose wills have been probated or propounded for probate before the judge or upon which letters testamentary or upon whose estates letters of administration or curatorship have been sought or granted, during the preceding months. The report shall contain any other information which the judge may have concerning the estate of these decedents. The judge shall also furnish immediately further information, from the records and files of the judge’s office in regard to the estates, which the department may from time to time require.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.290. Renumbered in 1970.

Sec. 43.31.300. Corporate executors of nonresident decedents.

If the executor of the estate of a nonresident is a corporation duly authorized, qualified, and acting as an executor in the jurisdiction of the domicile of the decedent, it is under the duties and obligations as to the giving of notices and filing of returns required by this chapter, and may bring and defend actions and suits as authorized or permitted by this chapter, to the same extent as an individual executor, notwithstanding that the corporation may be prohibited from exercising, in this state, any powers as executor, but nothing in this section authorizes corporations not authorized to do business in this state to qualify or act as executor, administrator, or in any other fiduciary capacity, if otherwise prohibited by the laws of this state, except to the extent expressly provided.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.300. Renumbered in 1970.

Sec. 43.31.310. Prima facie liability for tax.

The estate of each decedent whose property is subject to the laws of the state is considered prima facie liable for estate taxes under this chapter, and is subject to a lien for them in an amount which may be later determined to be due and payable on the estate as provided in this chapter. The presumption of liability begins on the date of the death of the decedent and continues until the full settlement of all taxes which may be found to be due under this chapter, the settlement to be shown by receipts for all taxes due to be issued by the department as provided for in this chapter. Whenever it appears to the department that an estate is not subject to a tax under this chapter the department shall issue to the executor, administrator, curator or other personal representative, or to the heirs, devisees, or legatees of the decedent, a certificate in writing to that effect, showing nonliability to tax, which certificate of nonliability has the same effect as a receipt showing payment. The certificate of nonliability is subject to record and admissible in evidence in like manner as receipts showing payment of taxes. There shall be paid to the department a fee of $2.50 for each certificate so issued.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.310. Renumbered in 1970.

Sec. 43.31.320. Discharge of estate; notice of lien, limitation, etc.

  1. If no receipt for the payment of taxes, or no receipt of nonliability for taxes has been issued or recorded as provided for in this chapter, the property constituting the estate of the decedent in this state shall be considered fully acquitted and discharged of all liability for estate and inheritance taxes under this chapter after a lapse of 10 years from the date of the filing with the department of notice of the decedent’s death, or after a lapse of 10 years from the date of the filing with the department of an estate tax return, whichever date is earlier, unless the department makes out, files and has recorded with the appropriate recorder wherein any part of the estate of the decedent may be situated in this state, a notice of lien against the property of the estate, specifying the amount or approximate amount of taxes claimed to be due to the state under this chapter, which notice of lien continues the lien in force for an additional period of five years or until payment is made. Notice of lien shall be filed and recorded; however, if no receipt for the payment of taxes, or no certificate of nonliability for taxes, has been issued or recorded as provided for in this chapter, the property constituting the estate of the decedent in this state, if the decedent was a resident of this state at the time of death, shall be considered fully acquitted and discharged of all liability for tax under this chapter after a lapse of 10 years from the date of the death of the decedent, unless the department makes out, files and has recorded notice of lien as provided in this chapter, which notice continues the lien in force against the property of the estate for an additional period of five years or until payment is made.
  2. Notwithstanding anything to the contrary in this section or this chapter, no lien for estate and inheritance taxes under this chapter may continue for more than 20 years from the date of death of the decedent, whether the decedent is a resident or nonresident of this state.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.320. Renumbered in 1970.

Sec. 43.31.330. Disposition of proceeds.

All taxes and fees levied and collected under this chapter shall be paid into the general fund.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.330. Renumbered in 1970.

Sec. 43.31.340. Interpretation and construction.

When not otherwise provided for in this chapter, the rules of interpretation and construction applicable to the estate and inheritance tax laws of the United States apply to and shall be followed in the interpretation of this chapter.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.340. Renumbered in 1970.

Sec. 43.31.350. Failure to produce records.

A person who fails to comply with any duty imposed upon the person by this chapter, or who, having possession or control of any record, file or paper, containing or supposed to contain information concerning the estate of the decedent, or having possession or control of any property comprised in the gross estate of the decedent, fails to exhibit it upon request to the department or an examiner or appraiser, appointed under this chapter, who desires to examine it in the performance of official duties under this chapter, is liable to a penalty of not more than $1,000, with costs of suit, in a civil action in the name of the state.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.350. Renumbered in 1970.

Secs. 43.31.360 — 43.31.390. Failure to make return; false return or return statement; tax evasion. [Repealed, § 46 ch 113 SLA 1980. For criminal penalties, see AS 43.05.290.]

Sec. 43.31.400. Effectiveness of chapter.

This chapter shall remain in force and effect so long as the government of the United States retains in full force and effect as a part of the revenue laws of the United States a federal estate tax, and this chapter shall cease to be operative when the government of the United States ceases to impose an estate tax of the United States.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.400. Renumbered in 1970.

Sec. 43.31.410. Exemptions.

The tax imposed under the inheritance and estate tax laws of this state in respect to personal property, except tangible property having an actual situs in this state, is not payable

  1. if the transferer at the time of death was a resident of a state or territory of the United States, or the District of Columbia, which at the time of death did not impose a death tax of any character in respect to property of residents of this state, except tangible personal property having an actual situs in the state, territory or district; or
  2. if the laws of the state, territory or district of the residence of the transferer at the time of death contained a reciprocal exemption provision under which nonresidents were exempted from death taxes of every character in respect to personal property, except tangible personal property having an actual situs therein, and if the state, territory or district of the residence of the nonresident decedent allowed a similar exemption to residents of the state, territory or district of residence of the decedent.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.410. Renumbered in 1970.

Sec. 43.31.420. Definitions.

In this chapter,

  1. “decedent” includes the testator, intestate grantor, bargainor, vendor, or donor;
  2. “executor” means the executor, administrator, or curator of the decedent, or if there is no executor, administrator, or curator appointed qualified and acting, then any person who is in the actual or constructive possession of any property included in the gross estate of the decedent;
  3. “gross estate” means the gross estate as determined under the provisions of the applicable federal revenue Act;
  4. “intangible personal property” means incorporeal personal property including deposits in banks, negotiable instruments, mortgages, debts, receivables, shares of stock, bonds, notes, credits, evidences of an interest in property, evidences of debt, and choses in action generally;
  5. “net estate” means the net estate as determined under the provisions of the applicable federal revenue Act;
  6. “nonresident” means a natural person domiciled outside the state;
  7. “person” means persons, corporations, associations, joint stock companies, and business trusts;
  8. “real property” means real property as it is commonly understood and includes real property whose legal title is in the decedent but which is subject to a contract of sale to a third party;
  9. “resident” means a natural person domiciled in the state;
  10. “tangible personal property” means corporeal personal property, including money;
  11. “transfer” includes the passing of property or any interest in property, in possession or enjoyment, present or future, by inheritance, descent, devise, succession, bequest, grant, deed, bargain, sale, gift, or appointment in the manner described in this chapter;
  12. “United States” used in a geographical sense includes only the 50 states and the District of Columbia.

History. (§ 2 ch 24 SLA 1970; am § 38 ch 168 SLA 1990)

Revisor’s notes. —

Enacted as AS 43.30.420. Renumbered in 1970. Paragraph (4) was formerly a part of paragraph (10); renumbered in 2002. Paragraphs (2) and (3) were formerly (3) and (4), respectively; renumbered in 2002 to reflect the 1990 repeal of former paragraph (2).

Sec. 43.31.430. Short title.

This chapter may be cited as the Estate Tax Law of Alaska.

History. (§ 2 ch 24 SLA 1970)

Revisor’s notes. —

Enacted as AS 43.30.430. Renumbered in 1970.

Chapter 35. Gaming and Gambling on Passenger Vessels.

Editor’s notes. —

Section 11, 2006 Primary Election Ballot Measure No. 2, part of the initiative that enacted AS 43.35.200 43.35.220 (formerly AS 05.16), provides that “[I]t is the intention of the people of Alaska that any portion of this legislation that is declared unlawful shall be stricken in a manner that preserves the remaining portion of the remaining legislation to the maximum extent possible.”

Secs. 43.35.010 — 43.35.070. Amount of tax; administration; distributor fees; operation by a minor; distribution of tax; orders and regulations; gambling not legalized. [Repealed, § 2 ch 39 SLA 1998.]

Sec. 43.35.080. Penalties. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.220 and 43.05.290.]

Sec. 43.35.090. Definitions. [Repealed, § 2 ch 39 SLA 1998.]

Secs. 43.35.100 — 43.35.150. License tax; regulations and orders; manner of paying tax; refund to local governments; gambling not legalized; violations and penalties. [Repealed, § 2 ch 39 SLA 1998.]

Sec. 43.35.200. Gambling activities aboard commercial vessels purportedly authorized by federal law.

AS 43.35.200 43.35.220 apply to the use of playing cards, dice, roulette wheels, coin-operated instruments or machines, or other objects or instruments used, designed, or intended for gaming or gambling used in the waters under the jurisdiction of the State of Alaska on a voyage described in 15 U.S.C. 1175(c)(2), and to any other gambling activities taking place aboard large passenger vessels in the state.

History. (§ 2, 2006 Primary Election Ballot Measure No. 2)

Revisor’s notes. —

Formerly AS 05.16.010 . Renumbered in 2008, at which time “AS 43.35.200 43.35.220 apply” was substituted for “This chapter applies”.

Administrative Code. —

For tax on gaming or gambling activities aboard large passenger vessels, see 15 AAC 165, art. 1.

Sec. 43.35.210. Tax on gambling activities.

There is imposed on the operator of gaming or gambling activities aboard large passenger vessels in the state a tax of 33 percent of the adjusted gross income from those activities. “Adjusted gross income” means gross income less prizes awarded and federal and municipal taxes paid or owed on the income. The tax shall be collected and is due and payable to the Department of Revenue in the manner and at the times required by the Department of Revenue.

History. (§ 2, 2006 Primary Election Ballot Measure No. 2)

Revisor’s notes. —

In 2006, “a” was deleted following “operator of” in the first sentence to correct a grammatical error in 2006 Ballot Measure No. 2. Formerly AS 05.16.020. Renumbered in 2008.

Administrative Code. —

For tax on gaming or gambling activities aboard large passenger vessels, see 15 AAC 165, art. 1.

Sec. 43.35.220. Disposition of receipts.

The proceeds from the tax on gambling operations aboard commercial passenger vessels in the state’s marine water shall be deposited in the large passenger vessel gaming and gambling tax account that is established as a subaccount within the commercial vessel passenger tax account (AS 43.52.230(a) ).

History. (§ 2, 2006 Primary Election Ballot Measure No. 2; am § 1 ch 101 SLA 2010)

Revisor’s notes. —

Formerly AS 05.16.030. Renumbered in 2008.

Chapter 40. Motor Fuel Tax.

Administrative Code. —

For motor fuel tax, see 15 AAC 40.

Collateral references. —

71 Am. Jur. 2d, State and Local Taxation, §§ 524-534

51 Am. Jur. 2d, Licenses and Permits, § 42 et seq.

53 C.J.S., Licenses, § 34.

State tax on or in respect of goods shipped in interstate commerce to consignee for sale on consignor’s account without previous sale or order for purchase. 4 ALR2d 244.

Loading or unloading interstate freight in performance of obligation resting upon one other than interstate carrier as interstate commerce as regards local taxation. 10 ALR2d 651.

State taxation of motor carriers as affected by commerce clause. 17 ALR2d 421.

Power to remit, release, or compromise tax claim. 28 ALR2d 1425.

Financial hardship or inability to pay taxes as rendering inapplicable statutes denying remedy by injunction against assessment or collection of tax. 65 ALR2d 550.

Sec. 43.40.005. Refined fuel surcharge levied.

  1. Every dealer or user of refined fuels shall pay a surcharge of $.0095 a gallon on refined fuel sold, transferred, or used in the state.
  2. The following refined fuels are exempt from the surcharge imposed under this section:
    1. fuel sold to a federal or state government agency for official use;
    2. fuel refined and used outside the United States;
    3. liquefied petroleum gas;
    4. aviation fuel;
    5. fuel sold or transferred between qualified dealers.

History. (§ 2 ch 37 SLA 2015)

Sec. 43.40.007. Use of revenue derived from the refined fuel surcharge.

The legislature may appropriate the annual estimated balance of the surcharge levied under AS 43.40.005 to the oil and hazardous substance release prevention account of the oil and hazardous substance release prevention and response fund established in AS 46.08.010 . Nothing in this section creates a dedicated fund.

History. (§ 2 ch 37 SLA 2015)

Sec. 43.40.010. Tax on transfers or consumption of motor fuel and expenditure of proceeds.

  1. In addition to the surcharge levied under AS 43.40.005 , there is levied a tax of eight cents a gallon on all motor fuel sold or otherwise transferred within the state, except that
    1. the tax on aviation gasoline is four and seven-tenths cents a gallon;
    2. the tax on motor fuel used in and on watercraft of all descriptions is five cents a gallon;
    3. the tax on all aviation fuel other than gasoline is three and two-tenths cents a gallon; and
    4. the tax rate on motor fuel that is blended with alcohol is the same tax rate a gallon as other motor fuel; however, in an area and during the months in which fuel containing alcohol is required to be sold, transferred, or used in an effort to attain air quality standards for carbon monoxide as required by federal or state law or regulation, the tax rate on motor fuel that is blended with alcohol is six cents a gallon less than the tax on other motor fuel not described in (1) — (3) of this subsection.
  2. In addition to the surcharge levied under AS 43.40.005 , there is levied a tax of eight cents a gallon on all motor fuel consumed by a user, except that
    1. the tax on aviation gasoline consumed is four and seven-tenths cents a gallon;
    2. the tax on motor fuel used in and on watercraft of all descriptions is five cents a gallon;
    3. the tax on all aviation fuel other than gasoline is three and two-tenths cents a gallon; and
    4. the tax rate on motor fuel that is blended with alcohol is the same tax rate a gallon as other motor fuel; however, in an area and during the months in which fuel containing alcohol is required to be sold, transferred, or used in an effort to attain air quality standards for carbon monoxide as required by federal or state law or regulation, the tax rate on motor fuel that is blended with alcohol is six cents a gallon less than the tax on other motor fuel not described in (1) — (3) of this subsection.
  3. [Repealed, § 24 ch 37 SLA 2015.]
  4. [Repealed, § 3 ch 166 SLA 1976.]
  5. Sixty percent of the proceeds of the revenue from the motor fuel taxes on aviation fuel, excluding the amount determined to have been spent by the state in its collection, shall be refunded to a municipality owning and operating or leasing and operating an airport in the proportion that the revenue was collected at the municipal airport. All other proceeds of the motor fuel taxes on aviation fuel shall be paid into a special aviation fuel tax account in the state general fund. The legislature may appropriate funds from this account for capital or operating costs of airports.
  6. The proceeds from the revenue from the tax on motor fuel used in boats and watercraft of all descriptions shall be deposited in a special watercraft fuel tax account in the general fund. The legislature may appropriate from this account for water and harbor facilities.
  7. The proceeds of the revenue from the tax on all motor fuels, except as provided in (e), (f) and (j) of this section, shall be deposited in a special highway fuel tax account in the state general fund. The legislature may appropriate funds from it for expenditure by the Department of Transportation and Public Facilities directly or as matched with available federal-aid highway money for maintenance of highways, construction of highway projects and ferries included in the program provided for in AS 19.10.150 , including approaches, appurtenances and related facilities and acquisition of rights-of-way or easements, and other highway costs including surveys, administration, and related matters.  All departments of the state government authorized to spend funds collected from taxes imposed by this chapter shall perform, when feasible, all construction or reconstruction projects by contract after the projects have been advertised for competitive bids, except that, when feasible, arrangements shall be made with political subdivisions to carry out the construction or reconstruction projects.  If it is not feasible for the work to be performed by state engineering forces, the commissioner of transportation and public facilities may contract on a professional basis with private engineering firms for road design, bridge design, and services in connection with surveys.  If more than one private engineering firm is available for the work the contracts shall be entered into on a negotiated basis.
  8. All motor fuel tax receipts shall be paid into the general fund and distributed to the proper accounts in the general fund.  Valid motor fuel tax refund claims shall be paid from the highway fuel tax account in the general fund.
  9. [Repealed, § 35 ch 126 SLA 1994.]
  10. The proceeds from the tax on motor fuel used in snow vehicles and, unless a tax refund is applied for under AS 43.40.050(a) , other internal combustion engines not used in or in conjunction with a motor vehicle licensed to be operated on public ways shall be deposited in a special nonpublic highway use account in the general fund.  The legislature may appropriate from this account to the Department of Transportation and Public Facilities for trail staking and shelter construction and maintenance.
  11. The tax on the transfer or consumption of motor fuel provided for in this section does not apply to liquified petroleum gas.
  12. [Repealed, § 3 ch 182 SLA 1990.]

History. (§ 48-5-2 ACLA 1949; am § 1 ch 80 SLA 1951; am § 1 ch 47 SLA 1955; am §§ 1, 2 ch 27 SLA 1957; am § 1 ch 134 SLA 1957; am § 1 art VI title II ch 152 SLA 1957; am § 2 art V title III ch 152 SLA 1957; am § 2 ch 124 SLA 1959; am §§ 1, 2 ch 20 SLA 1960; am § 1 ch 150 SLA 1960; am § 1 ch 110 SLA 1961; am § 1 ch 136 SLA 1961; am §§ 1 — 3 ch 131 SLA 1962; am § 1 ch 130 SLA 1968; am § 10 ch 143 SLA 1968; am §§ 1, 2 ch 216 SLA 1968; am §§ 1 — 3 ch 158 SLA 1970; am § 3 ch 58 SLA 1971; am §§ 1, 2 ch 124 SLA 1971; am §§ 2, 3 ch 125 SLA 1971; am §§ 1 — 3 ch 153 SLA 1972; am § 3 ch 166 SLA 1976; am §§ 1, 2 ch 116 SLA 1977; am § 4 ch 82 SLA 1982; am §§ 1, 2 ch 87 SLA 1983; am § 3 ch 182 SLA 1990; am § 35 ch 126 SLA 1994; am §§ 2, 4 ch 127 SLA 1994; am §§ 2, 4 ch 88 SLA 1997; am §§ 3 — 5, 24 ch 37 SLA 2015)

Revisor’s notes. —

In 1990, a reference to AS 43.40.050(a) was substituted for a reference to AS 43.40.040 in (j) of this section to reflect the 1980 repeal of AS 43.40.040 and amendment of AS 43.40.050(a) .

The contingent amendment of this section by secs. 3 and 5, ch. 127, SLA 1994, as amended by secs. 3 and 5, ch. 88, SLA 1998, did not take effect because the contingency did not occur.

Cross references. —

For civil penalty imposed for failure to file a return or report, or pay the full amount of a tax, or a portion or a deficiency of the tax, see AS 43.05.220 .

For provisions suspending collection of the motor fuel tax levied under this section between September 1, 2008, and August 31, 2009, see § 6, ch. 2, 4SSLA 2008, in the 2008 Temporary and Special Acts.

Administrative Code. —

For collection of tax, see 15 AAC 40, art. 4.

For tax return filing requirements; filing credits, see 15 AAC 40, art. 5.

Opinions of attorney general. —

The purpose of the dedication of the taxes on motor fuels contained in subsection (g) of this section is public highways. 1959 Alas. Op. Att'y Gen. No. 9.

A proposed alteration going to the geographical area of expenditure rather than to the special purpose of a dedication, does not contravene the constitution. 1959 Alas. Op. Att'y Gen. No. 9.

The 1957 amendment to this section, which reduced the tax on motor fuel used in commercial fishing crafts for purposes of commercial fishing from five cents to two cents per gallon, effected no change in the dedication inasmuch as the reduction in the tax was coupled with an exemption from the refund of three cents per gallon formerly allowed to users of fuel in commercial fishing craft for commercial purposes. Nothing has been done which increased or decreased the dedication. 1959 Alas. Op. Att'y Gen. No. 14.

The Civil Air Patrol is exempt from taxation under the Alaska Motor Fuel Oil Tax Act because it is an instrumentality of the federal government, but volunteer members of Civil Air Patrol are not exempt. 1961 Alas. Op. Att'y Gen. No. 26.

Notes to Decisions

Extent of tax liability. —

UPS was responsible for taxes on all jet fuel that the company loaded into the tanks of its aircraft making domestic flights from Anchorage, not just for the fuel that they “burned” over Alaska. UPS Co. v. Department of Revenue, 1 P.3d 83 (Alaska 2000).

Sec. 43.40.013. Collection of the refined fuel surcharge and the motor fuel tax.

Every dealer who sells or otherwise transfers refined or motor fuel in the state shall collect the surcharge and tax required in this chapter at the time of sale, and remit the total surcharge and tax collected during each calendar month of each year to the department by the last day of each succeeding month. Every user shall likewise remit the surcharge and tax required in this chapter and accrued on fuel actually used by the user during each month. If the monthly return is timely filed, one percent of the total monthly surcharge and tax due, limited to a maximum of $100, may be deducted and retained to cover the expense of accounting and filing the monthly return. At the time the remittance is made, each dealer or user shall submit a statement to the department showing all fuel that the dealer or user has distributed or used during the month.

History. (§ 6 ch 37 SLA 2015)

Sec. 43.40.015. Exemption from collection of tax.

  1. A dealer who has a reasonable belief at the time of sale or transfer that fuel that is sold or transferred is not to be used as motor fuel need not collect the motor fuel tax. However, as to fuel for which the tax was not collected and for which a certificate of use was not obtained, if the department determines that the fuel was put to a use that is taxable under this chapter, the dealer is liable for the tax and subject to a civil penalty under AS 43.05.220(a) whether or not the dealer’s belief that the fuel sold or transferred would not be used as motor fuel was reasonable.
  2. Except for sale or transfer of fuel under (d) of this section, if the motor fuel tax is not collected, the dealer shall obtain a certificate of use from the buyer or transferee at the time of the first sale or transfer of the fuel stating that the fuel that has been or will be purchased or received is not intended for use as motor fuel.  The form of the certificate of use shall be prescribed by the department by regulation.  The department may not collect the motor fuel tax from a dealer for fuel for which a certificate of use has been properly obtained under this subsection.
  3. A certificate of use obtained under this section must be renewed annually for exemptions listed under AS 43.40.100 (2).
  4. A certificate of use is not required under this section
    1. for fuel exempted under AS 43.40.100 (2)(C) or (J); and
    2. for fuel exempted under AS 43.40.100 (2)(I) other than fuel sold or transferred under this exemption to a person who is engaged in construction or mining activity.

History. (§ 1 ch 182 SLA 1990; am § 6 ch 88 SLA 1997; am §§ 7, 8 ch 37 SLA 2015)

Administrative Code. —

For collection of tax, see 15 AAC 40, art. 4.

Notes to Decisions

Extent of tax liability. —

UPS was responsible for taxes on all jet fuel that the company loaded into the tanks of its aircraft making domestic flights from Anchorage, not just for the fuel that they “burned” over Alaska. UPS Co. v. Department of Revenue, 1 P.3d 83 (Alaska 2000).

Sec. 43.40.020. Penalty for violation. [Repealed, § 46 ch 113 SLA 1980. For criminal penalties, see AS 43.05.290.]

Sec. 43.40.025. Handling of tax in sales or transfers of motor fuel in certain credit transactions. [Repealed, § 3 ch 82 SLA 1998, effective July 1, 2008.]

Sec. 43.40.030. Refund of the motor fuel tax for nonhighway use.

  1. Except as specified in AS 43.40.010(j) , a person who uses motor fuel to operate an internal combustion engine is entitled to a motor fuel tax refund of six cents a gallon if
    1. the tax on the motor fuel has been paid;
    2. the motor fuel is not aviation fuel, or motor fuel used in or on watercraft; and
    3. the internal combustion engine is not used in or in conjunction with a motor vehicle licensed to be operated on public ways.
  2. The entire amount of the motor fuel tax levied by this chapter shall be refunded to the purchaser on that part of the motor fuel used in a foreign country on which the tax has been paid when the fuel is sold and delivered in the state for non-highway use in a foreign country.
  3. The department shall establish the necessary regulations and prescribe the appropriate forms to prove that, for purposes of the motor fuel tax, the motor fuel is taken to and used in foreign countries.
  4. If a person obtains motor fuel on which the motor fuel tax levied by this chapter has been paid and the motor fuel is exempt from the motor fuel tax, the person is entitled to a refund of the motor fuel tax paid.

History. (§ 2 ch 47 SLA 1955; am § 3 ch 27 SLA 1957; am § 2 ch 136 SLA 1961; am § 4 ch 158 SLA 1970; am § 3 ch 124 SLA 1971; am § 4 ch 125 SLA 1971; am § 4 ch 116 SLA 1977; am §§ 35, 36 ch 113 SLA 1980; am § 5 ch 82 SLA 1982; am § 9 ch 37 SLA 2015)

Administrative Code. —

For refunds, see 15 AAC 40, art. 6.

Sec. 43.40.035. Other refunds and credits.

  1. A person who resells fuel on which a surcharge under AS 43.40.005 or the tax under AS 43.40.010(a) or (b) was previously paid is entitled to a credit or refund of (1) the motor fuel tax if the resold fuel is not motor fuel and the requirements of AS 43.40.015 have been fulfilled; or (2) the amount of surcharge or tax previously paid exceeds the surcharge or tax due on the resale. The amount of the credit or refund under this section is equal to the amount of the surcharge or tax previously paid on the resold fuel less the amount of the surcharge or tax prescribed by AS 43.40.005 or 43.40.010(a) or (b), respectively.
  2. A reseller may elect, with the express written consent of the supplier of the reseller, to receive the credit or refund under this section directly from the supplier rather than by filing a claim for the credit or refund with the department. When an election is properly made under this subsection, the supplier may claim the credit or refund from the department. To be effective an election under this subsection must be signed in quadruplicate by the reseller and by the supplier. The reseller and the supplier shall each file one copy of the election, with original signatures, with the department. The reseller and supplier shall each retain a copy of the election with original signatures for audit review by the department. If an election is made under this subsection, it may not be revoked without the express written consent of the supplier.
  3. For motor fuel sold to federal, state, and local government agencies for official use and purchased with a government credit card, the credit card issuer may apply for a refund of any motor fuel tax assessed on the purchase if the tax is not billed by the credit card issuer to the government agency making the purchase. For refined fuel sold to federal agencies for official use and purchased with a government credit card, the credit card issuer may apply for a refund of any refined fuel surcharge assessed on the purchase if the surcharge is not billed by the credit card issuer to the government agency making the purchase.

History. (§ 6 ch 82 SLA 1982; am § 3 ch 87 SLA 1983; am § 2 ch 182 SLA 1990; am § 1 ch 107 SLA 2003; am §§ 10, 11 ch 37 SLA 2015)

Administrative Code. —

For refunds, see 15 AAC 40, art. 6.

Sec. 43.40.040. Applications and permits for refund. [Repealed, § 45 ch 113 SLA 1980. For current law, see AS 43.40.050(a).]

Sec. 43.40.050. Refund claim by affidavit or other documentation.

  1. A person who claims a refund under AS 43.40.030 shall present the claim for the refund to the commissioner by affidavit upon a form provided by the commissioner.  The claim shall include the name, address, and occupation of the applicant, the nature of the business of the applicant, and a description sufficient to identify the machinery or equipment in which the motor fuel for which the refund is claimed was used.  The claim shall be accompanied by each invoice issued to the claimant at the time the motor fuel was purchased.  The commissioner may require any additional information that the commissioner considers necessary for the administration of this subsection.
  2. A claim for refund under AS 43.40.030 or 43.40.035 shall be filed within one year after the date of the purchase of the refined or motor fuel as indicated on the invoice, and failure to file within the one-year period is a waiver of the right to the refund. A claim is considered to be filed when the claim is mailed or personally presented to an office of the department.
  3. A reseller who claims a refund or credit under AS 43.40.035 shall present the refund claim to the department or to the supplier of that reseller by affidavit on a form provided by the department.  The claim shall include the name, address, and occupation of the applicant, the nature of the business of the applicant, and a description sufficient to identify the reason for the refund or credit.  The claim shall be supported by documentation required by the department.
  4. A credit card issuer who claims a refund under AS 43.40.035 shall present the refund claim to the department on a form prescribed by the department together with documentation of the claim required by the department.

History. (§ 4 ch 47 SLA 1955; am § 1 ch 139 SLA 1960; am § 37 ch 113 SLA 1980; am §§ 7 — 9 ch 82 SLA 1982; am § 2 ch 107 SLA 2003; am § 12 ch 37 SLA 2015)

Administrative Code. —

For collection of tax, see 15 AAC 40, art. 4.

For refunds, see 15 AAC 40, art. 6.

Collateral references. —

53 C.J.S., Licenses, § 62.

Sec. 43.40.060. Separate invoices.

The department may require the issuance of separate invoices for refined or motor fuel sold, distributed, or transferred when the invoices will be the basis for a refund claim.

History. (§ 6 ch 47 SLA 1955; am § 13 ch 37 SLA 2015)

Administrative Code. —

For refunds, see 15 AAC 40, art. 6.

Sec. 43.40.070. Refund warrants.

  1. Upon approval of a refund claim of the motor fuel tax by the department, a disbursement shall be made from the highway fuel tax account in the general fund in favor of the applicant in the amount of the claim.
  2. Upon approval of a refund claim of the refined fuel surcharge by the department, a disbursement shall be made from the oil and hazardous substance release prevention account of the oil and hazardous substance release prevention and response fund established in AS 46.08.010 in favor of the applicant in the amount of the claim.

History. (§ 7 ch 47 SLA 1955; am § 5 ch 131 SLA 1962; am § 24 ch 175 SLA 2004; am §§ 14, 15 ch 37 SLA 2015)

Sec. 43.40.080. Examination of books and records.

  1. To determine the validity of a claim for refund, the department may examine the books and records of the claimant and the books and records of a distributor of the refined or motor fuel. The department may cancel the refund of a claimant relying on a fraudulent invoice.
  2. [Repealed, § 46 ch 113 SLA 1980.]

History. (§ 5 ch 47 SLA 1955; am § 46 ch 113 SLA 1980; am § 16 ch 37 SLA 2015)

Sec. 43.40.085. Preservation of books and records.

Dealers and users shall preserve for three years all books and records pertaining to sales, transfers, and uses of refined or motor fuel that are subject to a surcharge or tax under this chapter.

History. (§ 5 ch 158 SLA 1970; am § 17 ch 37 SLA 2015)

Administrative Code. —

For collection of tax, see 15 AAC 40, art. 4.

Sec. 43.40.090. Criminal violation. [Repealed, § 46 ch 113 SLA 1980.]

Sec. 43.40.092. Disallowance of exemption from motor fuel tax for certain fuel sold for use in jet propulsion aircraft operating in flights that continue from foreign countries.

  1. The provisions of this section apply to disallow the exemption from the motor fuel tax for motor fuel sold for use by a dealer or used by a user in jet propulsion aircraft operating in flights that continue from foreign countries if, for motor fuel produced by a refiner,
    1. the refiner determines, on or after July 1, 1997, that the refiner will expand capacity or expand the refinery to produce more residual fuel oil used in watercraft;
    2. on or after the July 1, 1997, the refiner has voluntarily committed by agreement entered into with the commissioner that, if the refiner expands its oil refining capacity in order to produce additional supplies of fuel for use in jet propulsion aircraft that qualify for the tax exemption, when the refiner expands capacity, the refiner will
      1. use the refiner’s best efforts to advertise for, recruit, and employ in the construction activities associated with expanding refinery capacity resident workers who have experience in the specific fields in which they are hired to work;
      2. contract with licensed Alaska firms to prepare materials that are used in construction activities and to provide services in conjunction with activities associated with expanded refinery capacity and, in contracting with those firms, to encourage the refiner’s contractors to employ and, when necessary, train state residents; and
      3. enter into contracts with Alaska-licensed vendors, contractors, and suppliers for the provision of supplies and services used in conjunction with activities associated with expanding refinery capacity; and
    3. the commissioner determines that a dealer or user claiming the exemption for motor fuel acquired from a refiner who has entered into an agreement described in (2) of this subsection acquired the motor fuel for which the exemption is claimed from a refiner who has not complied with the requirements of the agreement in completing expansion of its oil refining capacity under the agreement described in (1) of this subsection.
  2. For purposes of this section,
    1. the term “resident worker” means an individual who
      1. is physically present in the state with the intent to remain in the state indefinitely and has a home in the state;
      2. demonstrates that intent by maintaining a residence in the state;
      3. possesses a resident fishing, trapping, or hunting license, or receives a permanent fund dividend; and
      4. may be required to state under oath that the individual is not claiming residency outside of the state or obtaining benefits under a claim of residency outside of the state;
    2. the phrases “Alaska-licensed contractors” and “Alaska firms” mean a contractor or firm that
      1. has held an Alaska business license for one year before performing any work in connection with the commitment described in (a) of this section;
      2. has maintained for one year a place of business within the state that deals in the supplies, services, or construction of the nature required for the commitment described in (a) of this section; and
      3. is
        1. a sole proprietorship and the proprietor is an Alaska resident;
        2. a partnership and more than 50 percent of the partners are Alaska residents;
        3. a corporation that has been incorporated in the state or is authorized to do business in the state; or
        4. a joint venture composed entirely of ventures that qualify under this subparagraph.

History. (§ 7 ch 88 SLA 1997; am § 18 ch 37 SLA 2015)

Sec. 43.40.094. Qualified dealer license.

  1. A dealer is eligible for a qualified dealer license if the dealer sells at least 50 percent of fuel acquired to unrelated persons for any combination of the following purposes:
    1. resale;
    2. use in heating private or commercial buildings or facilities;
    3. use in jet propulsion aircraft;
    4. motor fuel.
  2. A person applying for a qualified dealer license must use a form or format prescribed by the department. At the time of application, the applicant must provide an estimate of the average number of gallons of fuel subject to surcharge or tax each month during a calendar year, and state the estimated amount of surcharge and tax on those gallons. A license issued under this section is not transferable.
  3. The department may not issue or renew a qualified dealer license if
    1. the department finds that the applicant or qualified dealer has withheld information required in the application or that the information submitted in the application is false or misleading;
    2. the applicant, or a responsible person of a business organization that is applying for the license, has been convicted within the last 10 years, in this state or in any other taxing jurisdiction, of crimes involving a fuel surcharge or tax;
    3. the qualified dealer fails to comply with a requirement of this chapter;
    4. the qualified dealer has failed to pay in full the surcharge, taxes, interest, and penalties levied under AS 43.05 or this chapter.
  4. The department may
    1. issue only one qualified dealer license to each person;
    2. put additional limitations on the applicant or holder of a qualified dealer license.
  5. A license issued under this section expires on June 30 following the date of issue. Before a license issued under this section expires, the licensee may apply to renew the license, on a form or in a format prescribed by the department, for one year after the expiration date of the license.
  6. If the department determines a qualified dealer license may not be issued or renewed under this section, the department shall mail or electronically deliver a notice of license denial or nonrenewal to the person whose license was denied or not renewed. The person may appeal a notice of license denial or nonrenewal not later than 10 days after the date the notice was mailed or electronically delivered.
  7. The department may, at the time an applicant applies for a qualified dealer license, require the applicant to file a bond or other security with the department in an amount equal to twice the estimated surcharge and tax due to the department in one month, or $5,000, whichever is greater.
  8. The department may adopt regulations to implement this section, including regulations relating to the revocation of a license.

History. (§ 19 ch 37 SLA 2015)

Cross references. —

For provision relating to the applicability of previous regulations adopted by the Department of Revenue relating to qualified dealers and qualified dealer licenses, see sec. 25, ch. 37, SLA 2015.

Sec. 43.40.100. Definitions.

In this chapter,

  1. “dealer” means a person who sells or otherwise transfers in this state refined or motor fuel on which the surcharge or tax imposed by this chapter has not been paid;
  2. “motor fuel” means fuel used in an engine for the propulsion of a motor vehicle or aircraft, and fuel used in and on watercraft for any purpose, or in a stationary engine, machine, or mechanical contrivance that is run by an internal combustion motor; “motor fuel” does not include
    1. fuel consigned to foreign countries;
    2. fuel sold for use in jet propulsion aircraft operating in flights
      1. to foreign countries; or
      2. that continue from foreign countries, unless exemption of the motor fuel from taxation is disallowed because of the refiner’s failure to comply with the provisions of a voluntary agreement under AS 43.40.092 in conjunction with expansion of refinery capacity;
    3. fuel used in stationary power plants operating as public utility plants and generating electrical energy for sale to the general public;
    4. fuel used by nonprofit power associations or corporations for generating electric energy for resale;
    5. fuel used by charitable institutions;
    6. fuel sold or transferred between qualified dealers;
    7. fuel sold to federal, state, and local government agencies for official use;
    8. fuel used in stationary power plants that generate electrical energy for private residential consumption;
    9. fuel used to heat private or commercial buildings or facilities;
    10. fuel used for other nontaxable purposes as prescribed by regulations adopted by the department;
    11. fuel used in stationary power plants of 100 kilowatts or less that generate electrical power for commercial enterprises not for resale; or
    12. residual fuel oil used in and on watercraft if the residual fuel oil is sold or transferred in the state or consumed by a user; for purposes of this subparagraph, “residual fuel oil” means the heavy refined hydrocarbon known as number 6 fuel oil that is the residue from crude oil after refined petroleum products have been extracted by the refining process and that may be consumed or used only when sufficient heat is provided to the oil to reduce its viscosity rated by kinetic unit and to give it fluid properties sufficient for pumping and combustion;
  3. “qualified dealer” means a person who (A) refines, (B) imports, (C) manufactures, (D) produces, (E) compounds, or (F) wholesales refined or motor fuel;
  4. “refined fuel” means fuel produced from oil that is used in an engine, machine, or contrivance that creates heat, energy, or power;
  5. “user” means a person consuming or using refined or motor fuel, who
    1. purchases the fuel out of the state and ships it into the state for personal use in the state;
    2. manufactures the fuel in the state; or
    3. purchases or receives fuel in the state that is not subject to the surcharge or tax under this chapter at the time of purchase or receipt or is subject to a surcharge or tax that is less than the rate prescribed by AS 43.40.005 or 43.40.010 .

History. (§ 48-5-1 ACLA 1949; am § 1 ch 56 SLA 1949; am § 9 ch 47 SLA 1955; am § 26 ch 70 SLA 1964; am §§ 6, 7 ch 158 SLA 1970; am § 1 ch 74 SLA 1972; am § 5 ch 116 SLA 1977; am § 10 ch 83 SLA 1980; am §§ 10 — 12 ch 82 SLA 1982; am § 4 ch 87 SLA 1983; am § 8 ch 88 SLA 1997; am § 20 ch 22 SLA 2001; am §§ 20 — 23 ch 37 SLA 2015)

Revisor’s notes. —

Reorganized in 1983 to alphabetize the defined terms.

Paragraph (4) was enacted as paragraph (5); renumbered in 2015 at which time current paragraph (5) was also renumbered.

Administrative Code. —

For collection of tax, see 15 AAC 40, art. 4.

For refunds, see 15 AAC 40, art. 6.

For qualified dealer license and bonding requirements, see 15 AAC 40, art. 7.

Notes to Decisions

Extent of tax liability. —

UPS was responsible for taxes on all jet fuel that the company loaded into the tanks of its aircraft making domestic flights from Anchorage, not just for the fuel that they “burned” over Alaska. UPS Co. v. Department of Revenue, 1 P.3d 83 (Alaska 2000).

Secs. 43.40.110 — 43.40.120. Additional tax levy on transfers or consumption of motor fuel. [Repealed, § 8 ch 158 SLA 1970.]

Chapter 43. Disaster Taxes.

Secs. 43.43.010 — 43.43.060. Disaster relief tax. [Repealed, § 1 ch 48 SLA 1969.]

Secs. 43.43.110 — 43.43.160. Disaster severance tax. [Repealed, § 2 ch 247 SLA 1970.]

Chapter 45. School Tax.

[Repealed, § 2 ch 64 SLA 1980.]

Chapter 50. Tobacco Taxes and Sales.

Administrative Code. —

For cigarette tax, see 15 AAC 50.

Legislative history reports. —

For governor’s transmittal letter for ch. 1, FSSLA 2004 (SB 1001) making a series of amendments to this chapter, see 2004 Senate Journal 3839 — 3841.

Collateral references. —

51 Am. Jur. 2d, Licenses and Permits, §§ 4, 29-31

71 Am. Jur. 2d, State and Local Taxation, §§ 521-523.

53 C.J.S., Licenses, § 34.

Article 1. Cigarette Tax Act.

Sec. 43.50.010. License.

  1. A person may not sell, purchase, possess, or acquire cigarettes as a manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer without a license.
  2. The department, upon application and payment of the fee, shall issue a license to each manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer. The department shall adopt reasonable regulations that it considers necessary in respect to the application for and the issuance of licenses.
  3. The department may refuse to issue a license if there is reasonable cause to believe that the applicant has wilfully withheld information requested to determine the applicant’s eligibility to receive a license, or if there is reasonable cause to believe that information submitted in the application is false or misleading and is not made in good faith.
  4. A license required by AS 43.50.010 43.50.180 is in addition to any other license required by law.
  5. A license issued under AS 43.50.010 43.50.180 must include
    1. the name and address of the licensee;
    2. the type of business to be conducted; and
    3. the year for which the license is issued.

History. (§ 3 ch 187 SLA 1955; am § 38 ch 113 SLA 1980)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

Sec. 43.50.020. Separate licenses.

If a person operates more than one place of business, the person must obtain a separate license for each place of business, except that a person operating one or more cigarette vending machines is considered to have only one place of business for the purpose of a license under AS 43.50.010 43.50.180 . A person licensed only as a manufacturer, distributor, direct-buying retailer, vending machine operator, or buyer may not operate in another capacity unless the appropriate license for it is first secured. Each license shall be exhibited at the place of business for which it is issued and in the manner prescribed by the department.

History. (§ 4 ch 187 SLA 1955)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

Sec. 43.50.030. License fees.

  1. For each license issued to a manufacturer, and for each renewal, the fee is $50.
  2. For each license issued to a distributor or wholesaler-distributor, and for each renewal, the fee is $50.
  3. For each license issued to a vending machine operator, and for each renewal, the fee is $50.
  4. For each license issued to a direct-buying retailer, and for each renewal, the fee is $50.
  5. For each license issued to a buyer, and for each renewal, the fee is $25.
  6. A license may not be issued except upon the payment of the fee notwithstanding a statute or exemption to the contrary.

History. (§ 5 ch 187 SLA 1955; am § 1 ch 47 SLA 1964; am §§ 2 — 4 ch 1 FSSLA 2004)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

Sec. 43.50.035. Wholesaler-distributor license.

  1. A person outside of this state who sells or distributes cigarettes into this state and is not required to be licensed under AS 43.50.010 may apply for a wholesaler-distributor license.
  2. A person outside of this state who sells or distributes cigarettes into this state, who is not required to be licensed under AS 43.50.010 , and who wishes to purchase stamps under this chapter is required to be licensed as a wholesaler-distributor.
  3. The department shall adopt reasonable regulations necessary for the collection of cigarette taxes on cigarette sales or distributions made by a wholesaler-distributor licensee into this state and standards for
    1. application and issuance of the license; and
    2. refusal to issue the license.

History. (§ 2 ch 47 SLA 1964; am § 3 ch 109 SLA 2003; am § 5 ch 1 FSSLA 2004)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

Sec. 43.50.040. Expiration of licenses.

A license issued under AS 43.50.010 or 43.50.035 expires on June 30 following the date of issue. If a license is revoked, or the business for which the license is issued changes ownership or the licensee changes the place of business from the premises covered by the license, the licensee shall immediately return the license to the department. If the licensee moves the business to another location in the state, the license shall, upon the payment of a fee of 50 cents, be reissued for the new location for the balance of the unexpired term. Before a license issued under AS 43.50.010 or 43.50.035 expires, the licensee may apply to renew the license for one year from the expiration date of the license. The renewal fee required by AS 43.50.030 must accompany the application. The department shall adopt reasonable regulations that it considers necessary regarding the renewal of licenses.

History. (§ 6 ch 187 SLA 1955; am § 4 ch 109 SLA 2003)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

Sec. 43.50.050. Transfer of licenses.

A license is not assignable or transferable. However in the case of death, bankruptcy, receivership, or incompetency of the licensee, or if the business of the licensee is transferred to another by operation of law, the department may extend the license for a limited time to the executor, administrator, trustee, receiver, or the transferee.

History. (§ 7 ch 187 SLA 1955)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

Sec. 43.50.060. Refunds.

The department may not refund the license fee upon the surrender or revocation of a license. The department may refund a license fee that is paid or collected in error. If a license is lost, destroyed, or defaced, the department may issue a duplicate license upon payment of a fee of 50 cents.

History. (§ 8 ch 187 SLA 1955)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

Sec. 43.50.070. Suspension or revocation of or refusal to renew a license.

  1. The department may suspend, revoke, or refuse to renew a license issued under this chapter (1) for a negligent violation of AS 11.76.100 , 11.76.106 , 11.76.107 , 11.76.109 , or a violation of this chapter or a regulation of the department adopted under this chapter; (2) if a licensee ceases to act in the capacity for which the license was issued; or (3) if a licensee negligently sells tobacco or products containing tobacco to a person who is required to, but does not, hold a license endorsement under AS 43.70.075 or whose license endorsement under AS 43.70.075 has been suspended. A person whose license is suspended or revoked may not sell cigarettes or tobacco products, or permit cigarettes or tobacco products to be sold, during the period of the suspension or revocation on the premises occupied or controlled by that person. A disciplinary proceeding or action is not barred or abated by the expiration, transfer, surrender, renewal, or extension of a license issued under this chapter. The department shall comply with the provisions of AS 44.62 (Administrative Procedure Act), except that a hearing officer of the department, rather than a hearing officer assigned under AS 44.62.350 , may conduct hearings.
  2. In this section, “licensee” means a person licensed under AS 43.50.010 43.50.180 or 43.50.300 43.50.390 .

History. (§ 9 ch 187 SLA 1955; am § 4 ch 125 SLA 1990; am § 5 ch 113 SLA 1992; am § 5 ch 135 SLA 1998; am §§ 5, 6 ch 109 SLA 2003; am § 11 ch 57 SLA 2018)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

Effect of amendments. —

The 2018 amendment, effective January 1, 2018, in (a), inserted “11.76.109,” at the end of the citation list.

Sec. 43.50.080. Returns. [Repealed, § 20 ch 109 SLA 2003.]

Sec. 43.50.090. Tax imposed.

  1. There is levied an excise tax of 38 mills on each cigarette imported or acquired in the state. The tax shall be paid through the use of stamps as provided in AS 43.50.500 43.50.700 . A person who imports or acquires cigarettes in the state upon which a stamp required by this chapter has not been affixed in accordance with AS 43.50.500 43.50.700 , who fails to apply to purchase stamps as required by AS 43.50.540(a) , and who fails to pay the tax through the use of stamps is not relieved of the obligation to pay taxes due under this chapter. The person shall still pay the tax, and the tax is due on or before the end of the month following the month in which cigarettes were manufactured, imported, acquired, or sold in this state. Cigarettes upon which the excise is imposed are not again subject to the excise when acquired by another person.
  2. It is the intent and purpose of this section to provide for the collection of this excise from the person who first acquires the cigarettes in this state.
  3. The tax imposed under (a) of this section does not apply to cigarettes imported or acquired in the state by an exchange, commissary, or ship’s stores operated by one of the uniformed services of the United States as defined in 5 U.S.C. 2101.
  4. The tax imposed under (a) of this section does not apply to the first 400 cigarettes personally transported into the state by an individual for that individual’s personal consumption during the calendar month.

History. (§ 11 ch 187 SLA 1955; am § 5 ch 94 SLA 1977; am § 2 ch 48 SLA 1997; am §§ 7, 8 ch 109 SLA 2003; am §§ 6, 7 ch 1 FSSLA 2004)

Contingent amendment of subsection (a). —

Under secs. 3, 7, and 10, ch. 48, SLA 1997, the rate in subsection (a) is modified on the later of (1) the date a court enters a final judgment that the amendment made to subsection (a) by sec. 2, ch. 48, SLA 1997 changing the rate of taxation on cigarettes violates the prohibition set out in art. IX, sec. 7, Constitution of the State of Alaska, against dedication of the proceeds of a state tax or license, and (2) the expiration of any time for appeal of that judgment, or upon entry of a final order on the appeal that subsection (a), as amended by sec. 2, ch. 48, SLA 1997, violates art. IX, sec. 7, Constitution of the State of Alaska. Section 42, ch. 1, FSSLA 2004 contingently sets the modified rates of taxation on cigarettes under AS 43.50.190(a) at 77.5 mills after December 31, 2004, and before July 1, 2006; at 87.5 mills after June 30, 2006, and before July 1, 2007; and at 97.5 mills after June 30, 2007. Under sec. 8, ch. 48, SLA 1997, if this contingent amendment of AS 43.50.190(a) takes effect, the contingent amendment is retroactive to October 1, 1997, and 35.5 mills per cigarette of the tax levied after October 1, 1997 under subsection (a) of this section, as amended by sec. 2, ch. 48, SLA 1997, shall be credited to the tax levied under AS 43.50.190(a), as contingently amended by sec. 4, ch. 48, SLA 1997, and sec. 42, ch. 1, FSSLA 2004. As of May 2022, the contingencies had not been satisfied.

Cross references. —

For legislative intent concerning the 1997 amendment of this section, see § 1, ch. 48, SLA 1997 in the 1997 Temporary and Special Acts.

Administrative Code. —

For taxation, see 15 AAC 50, art. 2.

Notes to Decisions

Constitutionality of 1977 act. —

Chapter 94, SLA 1977, relating to both state and local taxation, does not violate Alaska Const., art. II, § 13, which requires every bill to be confined to one subject. North Slope Borough v. Sohio Petroleum Corp., 585 P.2d 534 (Alaska 1978).

Sec. 43.50.100. Unlicensed possession or sale.

  1. [Repealed, § 45 ch 113 SLA 1980.]
  2. [Repealed, § 3 ch 166 SLA 1976.]
  3. [Repealed, § 45 ch 113 SLA 1980.]
  4. A person or licensee who is in control or possession of cigarettes contrary to this chapter or who offers to sell or dispose of cigarettes to others for the purpose of resale without being licensed to do so is considered to have possession of the cigarettes as a consumer and is personally liable for the cigarette taxes imposed by this chapter, plus a penalty of 100 percent.
  5. [Repealed, § 45 ch 113 SLA 1980.]

History. (§ 12 ch 187 SLA 1955; am § 4 ch 47 SLA 1964; am § 3 ch 166 SLA 1976; am § 45 ch 113 SLA 1980; am § 9 ch 109 SLA 2003)

Cross references. —

For present provisions concerning civil penalties, see AS 43.05.220 .

Sec. 43.50.105. Restrictions on shipping or transporting cigarettes.

  1. A person who is not licensed under this chapter may not ship or cause to be shipped cigarettes to a person in this state unless the person receiving the cigarettes is
    1. licensed under this chapter;
    2. an operator of a customs bonded warehouse under 19 U.S.C. 1311 or 19 U.S.C. 1555; or
    3. an instrumentality of the federal government or an Indian tribal organization authorized by law to possess cigarettes not taxed under this chapter.
  2. A person who is licensed under this chapter may not ship or cause to be shipped cigarettes to a person in this state unless the person receiving the cigarettes
    1. is licensed under this chapter;
    2. holds a business license endorsement under AS 43.70.075 ;
    3. is an operator of a customs bonded warehouse under 19 U.S.C. 1311 or 19 U.S.C. 1555;
    4. is an instrumentality of the federal government or an Indian tribal organization authorized by law to possess cigarettes not taxed under this chapter; or
    5. is an individual 19 years of age or older receiving the cigarettes for personal consumption and the tax imposed on the cigarettes under this chapter has been paid.
  3. A common or contract carrier may not knowingly transport cigarettes to a person in this state unless the person
    1. shipping the cigarettes is licensed under this chapter and, before shipment, provides the common or contract carrier with a copy of the person’s current license issued by the department and an affidavit from the intended recipient certifying that the person receiving the cigarettes is a person described under (b)(1) — (5) of this section; or
    2. receiving the cigarettes is a person described under (a)(2) or (3) of this section or is licensed under this chapter and, before receipt, provides the common or contract carrier with a copy of the person’s current license issued by the department.
  4. If the cigarettes are transported by a common or contract carrier to a home or residence, it is rebuttably presumed that the common or contract carrier knew that the person receiving the cigarettes was not a person described under (b)(1) — (5) of this section, unless the person shipping the cigarettes has satisfied the requirements in (c)(1) of this section.
  5. A person, other than a common or contract carrier, may not knowingly transport cigarettes to a person in this state, unless the person receiving the cigarettes is a person described under (b)(1) — (5) of this section.
  6. A person who ships or causes to be shipped cigarettes to a person in this state shall plainly and visibly mark the container or wrapping with the word “cigarettes” if the cigarettes are shipped in a container or wrapping other than the cigarette manufacturer’s original container or wrapping.
  7. A person who violates the provisions of this section is guilty of a
    1. class A misdemeanor if the person unlawfully ships, causes to be shipped, or transports at least one but fewer than 5,000 cigarettes;
    2. class C felony if the person unlawfully ships, causes to be shipped, or transports 5,000 or more cigarettes.
  8. In addition to the criminal penalty under (g) of this section, the department may assess a civil fine of not more than $5,000 for each violation of this section.
  9. A person who violates the provisions of this section is jointly and severally liable for the taxes imposed by AS 43.50.090 and 43.50.190 . To the fullest extent permitted by the Constitution of the United States, a person who violates the provisions of this section is required to collect the taxes and pay them to the department.

History. (§ 10 ch 109 SLA 2003; am §§ 8 — 13 ch 1 FSSLA 2004; am § 12 ch 57 SLA 2018)

Cross references. —

For punishment of class A misdemeanors, see AS 12.55.135(a) for imprisonment and AS 12.55.035 for fines.

For punishment for class C felonies, see AS 12.55.125(e) for imprisonment and AS 12.55.035 for fines.

Effect of amendments. —

The 2018 amendment, effective January 1, 2018, in (b)(2), substituted “business license” for “tobacco”.

Sec. 43.50.110. Taxpayer’s remedies. [Repealed, § 3 ch 166 SLA 1976. For current law, see AS 43.05.240.]

Sec. 43.50.120. Lien. [Repealed, § 4 ch 94 SLA 1976. For current law, see AS 43.10.035.]

Sec. 43.50.130. Records.

  1. A licensee shall keep a complete and accurate record of all cigarettes manufactured, purchased, or acquired.  The records, except in the case of a manufacturer, must include a written statement containing the name and address of the seller and the purchaser, the date of delivery, the quantity of cigarettes, the trade name and brand, and the price paid for each brand of cigarettes purchased. The licensee shall keep such other records as the department prescribes.  All statements and records required by this section shall be in the form prescribed by the department, shall be preserved for three years, and shall be offered for inspection upon demand by the department.
  2. A licensee may not issue or accept a written statement that falsely indicates the name of the customer, the type of merchandise, the price, the discounts, or the terms of sale.
  3. Where an invoice is given or accepted by a licensee
    1. a statement that makes the invoice a false record of the transaction may not be inserted in the invoice; and
    2. a statement that should be included in the invoice may not be omitted from the invoice if the invoice does not reflect the transaction involved without the statement.
  4. An invoice for the sale of cigarettes given or accepted by a licensee under this chapter must state whether the taxes imposed by this chapter have been paid.

History. (§ 15 ch 187 SLA 1955; am § 11 ch 109 SLA 2003)

Sec. 43.50.140. Disposition of proceeds.

The proceeds derived from the payment of taxes, fees, and penalties under AS 43.50.010 43.50.180 , and the license fees received by the department shall be paid into a state fund entitled “School Fund,” and shall be used exclusively to rehabilitate, construct, and repair the state’s school facilities, and for costs of insurance on buildings comprising school facilities during the rehabilitation, construction, and repair, and for the life of the buildings.

History. (§ 16 ch 187 SLA 1955)

Opinions of attorney general. —

In order to insure that tobacco tax funds are used most effectively in being a part of major rehabilitation, construction and major repair projects, the law requires that expenditures from such funds be made only after study and concurrence by the city school board, the city council, and the commissioner of education (now Department of Education). 1962 Alas. Op. Att'y Gen. No. 24.

It is necessary for the city council to concur by resolution in any expenditure of tobacco tax funds. 1962 Alas. Op. Att'y Gen. No. 24.

In addition to the approval of the city council, any disbursement of tobacco tax funds must be made with the authorization of the local school board. 1962 Alas. Op. Att'y Gen. No. 24.

Notes to Decisions

Distribution to particular recipients not required. —

There is no express requirement in this section that school fund proceeds be distributed to any particular recipient and, in the view of the Alaska Supreme Court, there are no grounds for implying such a requirement. Southwest Region Sch. Dist. v. Department of Educ., 723 P.2d 636 (Alaska 1986).

Sec. 43.50.145. Notification of noncompliance; confiscation of noncomplying cigarettes. [Repealed, § 4 ch 103 SLA 2003.]

Sec. 43.50.150. Administration and regulatory authority; cooperation with municipalities.

  1. The department shall
    1. administer this chapter; and
    2. collect, supervise, and enforce the collection of taxes due under this chapter and penalties as provided in AS 43.05.
  2. The department may adopt regulations necessary for the administration of this chapter.
  3. The department may enter into an agreement with a municipality that imposes a tax on cigarettes or other tobacco products for the purpose of jointly auditing a person liable for a tax under AS 43.50.010 43.50.390 and the municipal tax on cigarettes or other tobacco products.
  4. The department may enter into an agreement with a municipality that collects a tax on cigarettes through the use of a stamp similar to that used by the department under AS 43.50.500 to distribute and collect money for the stamps issued by the municipality on behalf of the municipality in conjunction with the distribution and sale of stamps under AS 43.50.500 43.50.700 . An agreement under this subsection must provide for the municipality to reimburse the department for the cost of distributing the municipality’s stamps and collecting the money for those stamps.
  5. Notwithstanding AS 40.25.100(a) and AS 43.05.230(a) , the department may furnish the proper officer or representative of a municipality the tax returns or reports filed with the department under this chapter if the municipality grants substantially similar privileges to the department, provides adequate safeguards for the confidentiality of the returns and reports, and uses the returns and reports only for tax purposes.

History. (§ 17 ch 187 SLA 1955; am § 39 ch 113 SLA 1980; am § 1 ch 74 SLA 2014)

Administrative Code. —

For licensing, see 15 AAC 50, art. 1.

For taxation, see 15 AAC 50, art. 2.

Sec. 43.50.160. Criminal penalties. [Repealed, § 46 ch 113 SLA 1980. For current law, see AS 43.05.290.]

Sec. 43.50.170. Definitions.

In AS 43.50.010 43.50.180 , unless the context otherwise requires,

  1. “buyer” means a person who imports or acquires cigarettes for the person’s own consumption from any source other than a manufacturer, distributor, direct-buying retailer, retailer, or wholesaler-distributor;
  2. “cigarette” means a roll for smoking of any size or shape, made wholly or partly of tobacco, whether the tobacco is flavored, adulterated, or mixed with another ingredient, if the wrapper or cover of the roll is made of paper or a material other than tobacco;
  3. “direct-buying retailer” means a person who is engaged in the sale of cigarettes at retail in this state and who brings cigarettes or causes cigarettes to be brought into the state that are not purchased from a wholesaler-distributor;
  4. “distributor” means a person who brings cigarettes that are not purchased from a wholesaler-distributor, or has cigarettes that are not purchased from a wholesaler-distributor brought, into the state, and who sells or distributes at least 75 percent of the cigarettes to others for resale in the state;
  5. “licensee” means a person licensed under AS 43.50.010 43.50.180 ;
  6. “manufacturer” means a person who makes, fashions, or produces cigarettes for sale to distributors or other persons;
  7. “person” includes an individual, company, partnership, limited liability partnership, joint venture, joint agreement, limited liability company, association, mutual or otherwise, corporation, estate, trust, business trust, receiver, trustee, syndicate, or political subdivision of this state, or combination acting as a unit;
  8. “place of business” means a place where cigarettes are sold, or where cigarettes are brought or kept for the purpose of sale or consumption, including a vessel, vehicle, airplane, or train;
  9. “retailer” means a person in the state who is engaged in the business of selling cigarettes at retail;
  10. “sale” includes a sale, barter, exchange, and every other manner of transferring the ownership of personal property;
  11. “tobacco product” has the meaning given in AS 43.50.390 ;
  12. “wholesaler-distributor” means a person outside this state who sells or distributes cigarettes into this state, who is not required to be licensed under AS 43.50.010 , and who is licensed under AS 43.50.035 .

History. (§ 2 ch 187 SLA 1955; am § 27 ch 70 SLA 1964; am § 5 ch 125 SLA 1988; am §§ 12, 13 ch 109 SLA 2003; am §§ 14 — 17 ch 1 FSSLA 2004; am § 45 ch 40 SLA 2008)

Sec. 43.50.180. Short title.

AS 43.50.010 43.50.180 may be cited as the Cigarette Tax Act.

History. (§ 1 ch 187 SLA 1955)

Article 2. Additional Cigarette Taxes.

Sec. 43.50.190. Additional tax levy on cigarettes.

  1. There is levied an excise tax on each cigarette imported or acquired in this state,
    1. after December 31, 2004, but before July 1, 2006, 42 mills;
    2. after June 30, 2006, but before July 1, 2007, 52 mills;
    3. after June 30, 2007, 62 mills.
  2. The tax levied by this section is in addition to the tax levied by AS 43.50.010 43.50.180 . The tax shall be administered and collected in the same manner as the tax levied by AS 43.50.010 43.50.180 , except that receipts from the tax shall be deposited in the general fund. The penalties provided in AS 43.05 and this chapter apply to the tax levied in this section.
  3. The tax imposed under (a) of this section does not apply to the first 400 cigarettes personally transported into the state by an individual for that individual’s personal consumption during the calendar month.
  4. A portion of the annual proceeds of the tax levied under (a) of this section equal to 8.9 percent of the total proceeds of the tax shall be deposited into the tobacco use education and cessation fund established in AS 37.05.580 . This deposit shall be in addition to any sums deposited into the fund under AS 37.05.580 (a).
  5. In this section, “cigarette” has the meaning given in AS 43.50.170 .

History. (§§ 1, 2 ch 53 SLA 1961; am § 40 ch 113 SLA 1980; am § 2 ch 24 SLA 1985; am § 3 ch 96 SLA 1989; am §§ 14, 15 ch 109 SLA 2003; am §§ 18 — 20 ch 1 FSSLA 2004; am § 46 ch 40 SLA 2008)

Contingent amendment of subsection (a). —

Under secs. 4, 7, and 10, ch. 48, SLA 1997, as amended by sec. 42, ch. 1, FSSLA 2004, the rate in subsection (a) is modified on the later of (1) the date a court enters a final judgment that the amendment made to AS 43.50.090(a) by sec. 2, ch. 48, SLA 1997 changing the rate of taxation on cigarettes violates the prohibition set out in art. IX, sec. 7, Constitution of the State of Alaska, against dedication of the proceeds of a state tax or license, and (2) the expiration of any time for appeal of that judgment, or upon entry of a final order on the appeal that AS 43.50.090(a) , as amended by sec. 2, ch. 48, SLA 1997, violates art. IX, sec. 7, Constitution of the State of Alaska. Section 42, ch. 1, FSSLA 2004 contingently sets the modified rates of taxation on cigarettes under subsection (a) of this section at 77.5 mills after December 31, 2004, and before July 1, 2006; at 87.5 mills after June 30, 2006, and before July 1, 2007; and at 97.5 mills after June 30, 2007. Under sec. 8, ch. 48, SLA 1997, if this contingent amendment takes effect, the contingent amendment is retroactive to October 1, 1997, and 35.5 mills per cigarette of the tax levied after October 1, 1997 under AS 43.50.090(a), as amended by sec. 2, ch. 48, SLA 1997, shall be credited to the tax levied under subsection (a) of this section, as contingently amended by sec. 4, ch. 48, SLA 1997, and sec. 42, ch. 1, FSSLA 2004. As of May 2022, the contingencies had not been satisfied.

Cross references. —

For legislative intent in connection with the 1985 amendment to (a) of this section, see § 1, ch. 24, SLA 1985 in the Temporary and Special Acts.

Administrative Code. —

For taxation, see 15 AAC 50, art. 2.

Sec. 43.50.200. Nonparticipating manufacturer equity excise tax.

  1. There is levied an excise tax of 12.5 mills on each cigarette imported or acquired in this state from a nonparticipating manufacturer.
  2. The tax levied by this section is in addition to the taxes levied by AS 43.50.010 43.50.190 . The tax shall be administered and collected in the same manner as the taxes levied by AS 43.50.010 43.50.180 , except that receipts from the tax shall be deposited in the general fund. The penalties provided in AS 43.05 and this chapter apply to the tax levied in this section.
  3. In this section, “nonparticipating manufacturer” means a tobacco product manufacturer as defined in AS 45.53.100 that is not a participating manufacturer as that term is defined in sec. II(jj) of the Master Settlement Agreement.

History. (§ 21 ch 1 FSSLA 2004)

Article 3. Excise Tax on Certain Tobacco Products.

Sec. 43.50.300. Excise tax levied.

An excise tax is levied on tobacco products in the state at the rate of 75 percent of the wholesale price of the tobacco products. The tax is levied when a person

  1. brings, or causes to be brought, a tobacco product into the state from outside the state for sale;
  2. makes, manufactures, or fabricates a tobacco product in the state for sale in the state; or
  3. ships or transports a tobacco product to a retailer in the state for sale by the retailer.

History. (§ 4 ch 125 SLA 1988; am § 5 ch 48 SLA 1997)

Sec. 43.50.310. Exemptions.

  1. A facility operated by one of the uniformed services of the United States is exempt from the tax. In this subsection, “uniformed services” has the meaning given in 5 U.S.C. 2101.
  2. The tax does not apply to a tobacco product if the United States Constitution or other federal laws prohibit the levying of the tax on the product by the state.

History. (§ 4 ch 125 SLA 1988)

Sec. 43.50.320. Licensing.

  1. Except as provided in (g) of this section, a person must be licensed by the department if the person engages in business as a distributor for a tobacco product that is subject to the tax.
  2. The department, upon application and payment of a fee of $50, shall issue a license for one year to a person who applies for a license under (a) of this section.
  3. The department may refuse to issue a license under this section if there is reasonable cause to believe the information submitted in the application is false or misleading and is not made in good faith.
  4. A license issued under this section must include the name and address of the licensee, the type of business to be conducted, and the year for which the license is issued.
  5. The department may renew a license issued under this section for a fee of $50.
  6. The department may suspend, revoke, or refuse to renew a license issued under this section as provided in AS 43.50.070 .
  7. A license required by this section is in addition to any other license required by law, except that a person who is licensed under AS 43.50.010 43.50.180 is exempt from the licensing requirements of this section.
  8. A license issued under this section is not assignable or transferable, except that in the case of death, bankruptcy, receivership, or incompetency of the licensee, or if the business of the licensee is transferred to another by operation of law, the department may extend the license for a limited time to the executor, administrator, trustee, receiver, or the transferee.

History. (§ 4 ch 125 SLA 1988; am § 16 ch 109 SLA 2003)

Sec. 43.50.330. Returns.

  1. On or before the last day of each calendar month, a licensee shall file a return with the department. The return must state the number or amount of tobacco products sold by the licensee during the preceding calendar month, the selling price of the tobacco products, and the amount of tax imposed on the tobacco products.
  2. The licensee shall remit with the return the tax due under AS 43.50.300 for the month covered by the return, after deducting four-tenths of one percent of the tax due, which the licensee shall retain to cover the expense of accounting and filing the return.

History. (§ 4 ch 125 SLA 1988; am § 6 ch 48 SLA 1997)

Sec. 43.50.335. Tax credits and refunds.

The department shall adopt procedures for a refund or credit to a licensee of the tax paid for tobacco products that have become unfit for sale, are destroyed, or are returned to the manufacturer for credit or replacement if the licensee provides proof acceptable to the department that the tobacco products have not been and will not be consumed in this state.

History. (§ 17 ch 109 SLA 2003)

Sec. 43.50.340. Records.

A licensee shall keep a complete and accurate record of all tobacco products of the licensee subject to the tax, including purchase prices, sales prices, the names and addresses of the sellers and the purchasers, the dates of delivery, the quantities of tobacco products, and the trade names and brands. Statements and records required by this section must be in the form prescribed by the department, preserved for three years, and available for inspection upon demand by the department.

History. (§ 4 ch 125 SLA 1988)

Sec. 43.50.350. Disposition of proceeds.

The tax collected by the department shall be deposited in the general fund. The annual estimated balance in the account maintained by the commissioner of administration under AS 37.05.142 may be used by the legislature to make appropriations for health care, health research, health promotion, and health education programs.

History. (§ 4 ch 125 SLA 1988; am § 17 ch 90 SLA 1991)

Sec. 43.50.360. Annual report. [Repealed, § 35 ch 126 SLA 1994.]

Sec. 43.50.370. Regulations.

The department shall adopt under the Administrative Procedure Act (AS 44.62) reasonable regulations that it considers necessary to carry out the provisions of AS 43.50.300 43.50.390 .

History. (§ 4 ch 125 SLA 1988)

Sec. 43.50.390. Definitions.

In AS 43.50.300 43.50.390 ,

  1. “distributor” means a person who
    1. brings, or causes to be brought, a tobacco product into the state from outside the state for sale;
    2. makes, manufactures, or fabricates a tobacco product in the state for sale in the state; or
    3. ships or transports a tobacco product to a retailer in the state for sale by the retailer;
  2. “licensee” means a distributor who is
    1. licensed under AS 43.50.320 ; or
    2. exempted by AS 43.50.320 (g) from licensing under AS 43.50.320;
  3. “the tax” means the tax levied by AS 43.50.300 ;
  4. “tobacco product” means
    1. a cigar;
    2. a cheroot;
    3. a stogie;
    4. a perique;
    5. snuff and snuff flour;
    6. smoking tobacco, including granulated, plug-cut, crimp-cut, ready-rubbed, and any form of tobacco suitable for smoking in a pipe or cigarette;
    7. chewing tobacco, including cavendish, twist, plug, scrap, and tobacco suitable for chewing; or
    8. an article or product made of tobacco or a tobacco substitute, but not including a cigarette as defined in AS 43.50.170 ;
  5. “wholesale price” means
    1. the established price for which a manufacturer sells a tobacco product to a distributor after deduction of a discount or other reduction received by the distributor for quantity or cash if the manufacturer’s established price is adequately supported by bona fide arm’s length sales as determined by the department; or
    2. the price, as determined by the department, for which tobacco products of comparable retail price are sold to distributors in the ordinary course of trade if the manufacturer’s established price does not meet the standards of (A) of this paragraph.

History. (§ 4 ch 125 SLA 1988; am § 18 ch 109 SLA 2003)

Article 4. Compliance with Federal Laws Relating to Cigarettes.

Sec. 43.50.400. Sale or distribution of cigarettes; prohibitions.

A person may not

  1. sell or distribute to consumers in this state, acquire, hold, own, possess, or transport for sale or distribution in this state, or import or cause to be imported into this state for sale or distribution in this state cigarettes
    1. the package of which
      1. bears a statement, label, stamp, sticker, or notice indicating that the manufacturer did not intend the cigarettes to be sold, distributed, or used in the United States, including labels stating, “for export only,” “U.S. tax-exempt,” “for use outside U.S.,” or similar wording; or
      2. does not comply with all requirements of federal law regarding health warnings and other information on packages of cigarettes manufactured, packaged, or imported for sale, distribution, or use in the United States, including the warning labels required by 15 U.S.C. 1333 (Federal Cigarette Labeling and Advertising Act), and all federal trademark and copyright laws;
    2. imported into the United States on or after January 1, 2000, in violation of 26 U.S.C. 5754; or
    3. for which a list of the ingredients added to tobacco in the manufacture of those cigarettes has not been submitted to the Secretary of the United States Department of Health and Human Services as required under 15 U.S.C. 1335a (Federal Cigarette Labeling and Advertising Act);
  2. alter a package of cigarettes before sale or distribution to the consumer so as to remove, conceal, or obscure
    1. a statement, label, stamp, sticker, or notice described in (1)(A)(i) of this section; or
    2. any health warning, including a health warning that is specified in 15 U.S.C. 1333 (Federal Cigarette Labeling and Advertising Act).

History. (§ 1 ch 87 SLA 2000)

Sec. 43.50.410. Imported cigarettes: requirements.

A person that imports into this state for sale or distribution in this state cigarettes manufactured outside of the United States shall file with the department, on or before the last day of each calendar quarter, for the cigarettes that the person imported into this state in the preceding calendar quarter, a statement signed by the person under penalty of perjury that the commissioner shall treat as confidential and that shall not be considered a public record under AS 40.25.110 , identifying the brand and brand styles of the cigarettes, the quantity of each brand style of cigarettes, and the person or persons to whom the cigarettes have been shipped. In this section, “calendar quarter” means each of the three-month periods ending March 31, June 30, September 30, and December 31.

History. (§ 1 ch 87 SLA 2000)

Revisor’s notes. —

In 2000, “AS 40.25.110 ” was substituted for “AS 09.25.110” to reflect the 2000 renumbering of AS 09.25.110.

Sec. 43.50.420. Enforcement.

For the purpose of enforcing AS 43.50.400 43.50.450 , the commissioner may share information with any local, state, or federal government agency.

History. (§ 1 ch 87 SLA 2000)

Sec. 43.50.430. Applicability.

AS 43.50.400 43.50.450 do not apply to cigarettes

  1. imported into the United States for personal use free of federal tax or duty, or voluntarily abandoned to the United States Secretary of the Treasury at the time of entry; or
  2. sold or intended to be sold as duty-free merchandise by a duty-free sales enterprise in accordance with the provisions of 19 U.S.C. 1555(b); however, AS 43.50.400 43.50.450 apply to duty-free cigarettes that are brought back into the customs territory for resale within the customs territory.

History. (§ 1 ch 87 SLA 2000)

Sec. 43.50.450. Definitions.

In AS 43.50.400 43.50.450 , unless the context otherwise requires,

  1. “cigarette” has the meaning given in AS 43.50.170 ;
  2. “manufacturer” has the meaning given in AS 43.50.170 .

History. (§ 1 ch 87 SLA 2000)

Article 5. Compliance with Statutory Requirements Regarding Cigarette Sales.

Cross references. —

For a statement of legislative findings and purpose relating to ch. 103, SLA 2003, which added AS 43.50.460 43.50.495 , see § 1, ch. 103, SLA 2003, in the 2003 Temporary and Special Acts.

Legislative history reports. —

For governor’s transmittal letter for ch. 103, SLA 2003 (House Bill 224), see 2003 House Journal 674 — 675.

Sec. 43.50.460. Tobacco product manufacturer certifications.

  1. Every tobacco product manufacturer whose cigarettes are sold in this state, whether directly or through a distributor, retailer, or similar intermediary or intermediaries, shall execute and deliver on a form or in the manner prescribed by the commissioner a certification to the commissioner, no later than April 30 of each year, certifying, under penalty of perjury, that, as of the date of the certification, the tobacco product manufacturer is either a participating manufacturer or is in full compliance with AS 45.53.
  2. A participating manufacturer shall include in its certification a list of its brand families. The participating manufacturer shall update the list 30 days before any addition or modification to its brand families by executing and delivering a supplemental certification to the commissioner.
  3. A nonparticipating manufacturer shall include in its certification a complete list of all of its brand families. The nonparticipating manufacturer shall update the list 30 days before any addition or modification to its brand families by executing and delivering a supplemental certification to the commissioner. A nonparticipating manufacturer’s certification must
    1. separately list brand families of cigarettes and the number of units sold for each brand family that was sold in the state during the preceding calendar year;
    2. list all of its brand families that have been sold in the state at any time during the current calendar year;
    3. indicate by an asterisk any brand family sold in the state during the preceding calendar year that is no longer being sold in the state as of the date of the certification; and
    4. identify by name and address any other manufacturer of the listed brand families in the preceding calendar year.
  4. For a nonparticipating manufacturer, the certification required by (a) of this section must additionally certify that the nonparticipating manufacturer
    1. is registered to do business in the state or has appointed a resident agent for service of process and provided notice of the appointment as required by AS 43.50.475 ;
    2. has
      1. established and continues to maintain a qualified escrow fund; and
      2. executed a qualified escrow agreement that has been reviewed and approved by the Department of Law and that governs the qualified escrow fund; and
    3. is in full compliance with AS 45.53 and this section, and any regulations adopted under those statutes.
  5. For a nonparticipating manufacturer, the certification must also include the
    1. name, address, telephone number, and electronic mail address of the financial institution where the nonparticipating manufacturer has established the qualified escrow fund required under AS 45.53 and the regulations adopted under that chapter;
    2. account number of the qualified escrow fund and sub-account number for the State of Alaska;
    3. amount that the non-participating manufacturer placed in the qualified escrow fund for cigarettes sold in the state during the preceding calendar year, the date and amount of each such deposit, and the evidence or verification considered necessary by the commissioner to confirm the information submitted under this section; and
    4. amounts of and dates of any withdrawal or transfer of money the nonparticipating manufacturer made at any time from the qualified escrow fund or from any other qualified escrow fund into which the nonparticipating manufacturer ever made escrow payments in accordance with AS 45.53 and the regulations adopted under that chapter.
  6. A tobacco product manufacturer may not include a brand family in its certification unless
    1. for a participating manufacturer, the participating manufacturer affirms that the brand family is to be considered to be its cigarettes for purposes of calculating its payments under the Master Settlement Agreement for the relevant year, in the volume and shares determined under the Master Settlement Agreement; and
    2. for a nonparticipating manufacturer, the nonparticipating manufacturer affirms that the brand family is to be considered to be its cigarettes for purposes of AS 45.53.
  7. Nothing in this section shall be construed as limiting or otherwise affecting the state’s right to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the Master Settlement Agreement or for purposes of AS 45.53.
  8. A tobacco product manufacturer shall maintain all invoices and documentation of sales of cigarettes and other information relied upon for the certification for a period of five years, unless otherwise required by law to maintain them for a greater period of time.

History. (§ 2 ch 103 SLA 2003; am § 50 ch 56 SLA 2005)

Revisor’s notes. —

Enacted as AS 43.50.500 and renumbered in 2003.

Sec. 43.50.465. Directory of cigarettes approved for sale and importation.

Not later than July 30 of each year, the commissioner shall develop and make available for public inspection a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of AS 43.50.460 and all brand families that are listed in those certifications, except as follows:

  1. the commissioner may not include or retain in the directory the name or brand families of any nonparticipating manufacturer that fails to provide the required certification or whose certification the commissioner determines is not in compliance with AS 43.50.460 , unless the commissioner has determined that the violation has been cured to the satisfaction of the commissioner;
  2. neither a tobacco product manufacturer nor brand family shall be included or retained in the directory if the commissioner concludes that
    1. for a nonparticipating manufacturer, all escrow payments required under AS 45.53 for any period for any brand family, regardless of whether listed by the nonparticipating manufacturer, have not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the Department of Law; or
    2. all outstanding final judgments, including interest on those judgments, for violations of AS 45.53 have not been fully satisfied for the brand family and the manufacturer;
  3. the commissioner shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand families to keep the directory in conformity with the requirements of AS 43.50.460 43.50.495 ;
  4. every licensee shall provide to the commissioner, and update as necessary, an electronic mail address for the purpose of receiving any notifications that may be required by AS 43.50.460 43.50.495 .

History. (§ 2 ch 103 SLA 2003)

Revisor’s notes. —

Enacted as AS 43.50.510 and renumbered in 2003, at which time “AS 43.50.460 43.50.495 ” was substituted for “AS 43.50.500 43.50.590 ” and “AS 43.50.460 ” was substituted for “AS 43.50.500 ” to reflect the 2003 renumbering of those sections.

Sec. 43.50.470. Prohibition against sale or importation of cigarettes not in the directory.

  1. A person may not sell, offer, or possess for sale in this state, or import for personal consumption in this state, cigarettes of a tobacco product manufacturer or brand family not included in the directory.
  2. Under regulations adopted by the department, the department may allow a licensee a credit for the tax paid under this chapter on cigarettes that the licensee destroys or returns to the manufacturer or distributor to avoid a violation of this section if
    1. the tobacco product manufacturer and brand family of the cigarettes were included in the directory at the time the licensee came into possession of the cigarettes; and
    2. the tobacco product manufacturer or brand family was subsequently removed from the directory while the licensee was still in possession of the cigarettes.

History. (§ 2 ch 103 SLA 2003)

Revisor’s notes. —

Enacted as AS 43.50.520 and renumbered in 2003.

Sec. 43.50.475. Agent for service of process.

  1. A nonresident or foreign nonparticipating manufacturer that has not registered to do business in the state as a foreign corporation or business entity shall, as a condition precedent to having its brand families listed or retained in the directory, appoint and continually engage without interruption the services of an agent in this state to act as agent for the service of process on whom all process and an action or proceeding against the nonparticipating manufacturer concerning or arising out of the enforcement of AS 43.50.460 43.50.495 and AS 45.53 may be served in any manner authorized by law. The nonparticipating manufacturer shall provide the name, address, telephone number, electronic mail address, and proof of the appointment and availability of the agent to and to the satisfaction of the commissioner and the Department of Law.
  2. The nonparticipating manufacturer shall provide notice to the commissioner and the Department of Law 30 calendar days before termination of the authority of an agent and shall additionally provide proof to the satisfaction of the Department of Law of the appointment of a new agent no less than five calendar days before the termination of an existing agent appointment. If an agent terminates an agency appointment, the nonparticipating manufacturer shall notify the commissioner and the Department of Law of the termination within five calendar days and shall include proof to the satisfaction of the Department of Law of the appointment of a new agent.
  3. Any nonparticipating manufacturer whose products are sold in this state without appointing or designating an agent as required by this section is considered to have appointed the commissioner of commerce, community, and economic development as its agent and may be proceeded against in courts of this state by service of process upon the commissioner of commerce, community, and economic development in the manner described by AS 10.06.175(b) , regardless of whether the nonparticipating manufacturer is a corporation; however, the appointment of the commissioner of commerce, community, and economic development as the agent does not satisfy the condition precedent to having the nonparticipating manufacturer’s brand families listed or retained in the directory.

History. (§ 2 ch 103 SLA 2003)

Revisor’s notes. —

Enacted as AS 43.50.530 and renumbered in 2003 at which time “AS 43.50.460 43.50.495 ” was substituted for “AS 43.50.500 43.50.590 ” to reflect the 2003 renumbering of those sections.

In 2004, in (c) of this section, “commissioner of community and economic development” was changed to “commissioner of commerce, community, and economic development”, in accordance with § 3, ch. 47, SLA 2004.

Sec. 43.50.480. Reporting and disclosure of information; escrow installments.

  1. Not later than the end of the month following the month in which cigarettes were imported or sold in the state, each licensee shall submit the information the commissioner requires to facilitate compliance with AS 43.50.460 43.50.495 , including a list by brand family of the total number of cigarettes or, in the case of roll-your-own cigarettes, the equivalent stick count for which the licensee, during the previous calendar month, paid the tax due for the cigarettes. For a period of five years, the licensee shall maintain and make available to the commissioner all invoices and documentation of sales of cigarettes of all nonparticipating manufacturers and any other information relied upon in reporting to the commissioner.
  2. The commissioner is authorized to disclose to the Department of Law any information received under this chapter and requested by the Department of Law for purposes of determining compliance with and enforcing the provisions of this chapter. The commissioner and the Department of Law shall share with each other the information received under this chapter, and may share the information with other federal, state, or local agencies only for purposes of enforcement of AS 43.50.460 43.50.495 , AS 45.53, or corresponding laws of other states.
  3. The commissioner or Department of Law may require at any time that the nonparticipating manufacturer provide proof from the financial institution in which the manufacturer has established a qualified escrow fund for the purpose of compliance with AS 45.53 of the amount of money in the fund being held on behalf of the state and the dates of deposits, and listing the amounts of all withdrawals from the fund and the dates of withdrawals.
  4. In addition to the information required to be submitted under (a) of this section, the commissioner or the Department of Law may require a licensee or tobacco product manufacturer to submit any additional information, including samples of the packaging or labeling of each brand family, necessary to enable the commissioner or the Department of Law to determine whether a tobacco product manufacturer is in compliance with AS 43.50.460 43.50.495 .
  5. To promote compliance with the provisions of AS 43.50.460 43.50.495 , the commissioner may adopt regulations requiring a tobacco product manufacturer subject to the requirements of AS 43.50.460 to make the escrow deposits required in quarterly installments during the year in which the sales covered by the deposits are made. The commissioner may require production of information sufficient to determine the adequacy of the amount of the installment deposit.

History. (§ 2 ch 103 SLA 2003)

Revisor’s notes. —

Enacted as AS 43.50.540 and renumbered in 2003, at which time “AS 43.50.460 43.50.495 ” was substituted for “AS 43.50.500 43.50.590 ” and “AS 43.50.460 ” was substituted for “AS 43.50.500 ” to reflect the 2003 renumbering of those sections.

Sec. 43.50.485. Penalties and other remedies.

  1. In addition to or in place of any other civil or criminal remedy provided by law, upon a determination that a licensee has violated AS 43.50.470(a) or any regulation adopted under that statute, the commissioner may revoke or suspend the license issued under AS 43.50.010 , 43.50.035 , or 43.50.320 of any licensee. The department shall comply with the provisions of AS 44.62 (Administrative Procedure Act). Each offer to sell cigarettes in violation of AS 43.50.470(a) constitutes a separate violation. The commissioner also may impose a civil penalty in an amount not to exceed the greater of 500 percent of the retail value of the cigarettes sold or $5,000 upon a determination of violation of a provision of AS 43.50.470(a) or any regulations adopted under that statute. The penalty shall be imposed in the manner provided by AS 43.05.245 .
  2. Any cigarettes that have been sold, offered for sale, or possessed for sale in this state, or imported for personal consumption in this state in violation of AS 43.50.470(a) are contraband, regardless of whether the violation was knowing, and the cigarettes are subject to seizure and forfeiture; seized and forfeited cigarettes shall be destroyed and may not be resold. The department shall comply with the provisions of AS 44.62 (Administrative Procedure Act).
  3. The Department of Law, on behalf of the commissioner, may seek an injunction to restrain a threatened or actual violation of AS 43.50.460 , 43.50.470(a) , or 43.50.480 by a licensee and to compel the licensee to comply with those provisions.

History. (§ 2 ch 103 SLA 2003)

Revisor’s notes. —

Enacted as AS 43.50.550 and renumbered in 2003, at which time “AS 43.50.470(a) ” was substituted for “AS 43.50.520(a) ” and “AS 43.50.460 , 43.50.470(a) , or 43.50.480 ” was substituted for “AS 43.50.500 , 43.50.520(a) , or 43.50.540 ” to reflect the renumbering of those sections.

Sec. 43.50.490. Miscellaneous provisions.

  1. A determination of the commissioner not to list in, or to remove from, the directory a brand family or tobacco product manufacturer is subject to administrative review under AS 44.62.330 44.62.630 .
  2. A person may not be issued a license or granted a renewal of a license under AS 43.50.010 , 43.50.035 , or 43.50.320 unless the person has certified in writing, under penalty of perjury, that the person will comply fully with AS 43.50.460 43.50.495 .
  3. The department shall adopt under AS 44.62 (Administrative Procedure Act) reasonable regulations that it considers necessary to carry out the provisions of AS 43.50.460 43.50.495 .
  4. If a court determines that a person has violated the provisions of AS 43.50.460 43.50.495 , the court shall order any profits, gain, gross receipts, or other benefit from the violation to be disgorged and paid to the state for deposit in the general fund. Unless otherwise expressly provided, the remedies or penalties provided by AS 43.50.460 43.50.495 are cumulative to each other and to the remedies or penalties available under all other laws of this state.

History. (§ 2 ch 103 SLA 2003)

Revisor’s notes. —

Enacted as AS 43.50.560 and renumbered in 2003, at which time “AS 43.50.460 43.50.495 ” was substituted for “AS 43.50.500 43.50.590 ” to reflect the 2003 renumbering of those sections.

Sec. 43.50.495. Definitions.

In AS 43.50.460 43.50.495 , unless the context otherwise requires,

  1. “brand family” means all styles of cigarettes sold under the same trade mark and differentiated from one another by means of additional modifiers or descriptors, including menthol, lights, kings, and 100s; “brand family” includes any brand name, alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicium of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes;
  2. “cigarette” has the meaning given in AS 45.53.100 ;
  3. “commissioner” means the commissioner of revenue;
  4. “department” means the Department of Revenue;
  5. “directory” means the directory developed and made available under AS 43.50.465 ;
  6. “licensee” means a person licensed or required to be licensed under AS 43.50.010 , 43.50.035 , or 43.50.320 ;
  7. “Master Settlement Agreement” has the meaning given in AS 45.53.100 ;
  8. “nonparticipating manufacturer” means a tobacco product manufacturer that is not a participating manufacturer;
  9. “participating manufacturer” has the meaning given in sec. II(jj) of the Master Settlement Agreement and all amendments to that agreement;
  10. “qualified escrow fund” has the meaning given in AS 45.53.100 ;
  11. “roll-your-own” has the meaning given in AS 45.53.100 (4)(B);
  12. “tobacco product manufacturer” has the meaning given in AS 45.53.100 ;
  13. “units sold” has the meaning given in AS 45.53.100 .

History. (§ 2 ch 103 SLA 2003)

Revisor’s notes. —

Enacted as AS 43.50.590 and renumbered in 2003, at which time “AS 43.50.460 43.50.495 ” was substituted for “AS 43.50.500 43.50.590 ” and “AS 43.50.465 ” was substituted for “AS 43.50.510 ” to reflect the 2003 renumbering of those sections.

Article 6. Cigarette Tax Stamps.

Sec. 43.50.500. Tax payment by use of stamps.

A licensee shall pay the tax imposed under AS 43.50.090(a) , 43.50.190(a) , and 43.50.200 through the use of stamps issued under AS 43.50.500 43.50.700 .

History. (§ 19 ch 109 SLA 2003; am § 22 ch 1 FSSLA 2004)

Sec. 43.50.510. Stamp design; manner of affixing.

  1. The department shall design and furnish stamps of sizes and denominations as determined by the department.
  2. Notwithstanding the packaging requirements of AS 43.70.075(g)(1) , a stamp required under AS 43.50.500 43.50.700 must be affixed
    1. on the smallest package that will be handled, sold, used, consumed, or distributed in this state; and
    2. in a denomination equal to the amount of tax due under this chapter on the cigarettes in the package.
  3. A stamp required under AS 43.50.500 43.50.700 shall be affixed to the bottom of each individual package of cigarettes in a manner so that the stamp cannot be removed from the package without being mutilated or destroyed.
  4. For purposes of this section, a stamp is considered affixed only if more than 80 percent of the stamp is attached to the individual package in accordance with (c) of this section and regulations adopted by the department.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.520. Stamp required before sale, distribution, or consumption.

  1. Except as provided in AS 43.50.580 , a licensee or the authorized agent or designee of the licensee shall affix a stamp, in the manner required by AS 43.50.510 , to each package of cigarettes immediately upon the opening of the shipping container containing the package and before sale, distribution, or consumption in this state.
  2. Except as provided in AS 43.50.580 and 43.50.610 , a person may not engage in the following activities in this state unless the package containing the cigarettes is affixed with the required stamp:
    1. sell or distribute cigarettes to a person who is a consumer in this state;
    2. acquire, hold, own, possess, or transport cigarettes for sale or distribution in this state;
    3. import or cause to be imported cigarettes into this state for sale, distribution, or consumption; or
    4. place or store cigarette packages in a vending machine in this state.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.530. Sale of stamps.

  1. The department shall furnish stamps for sale to licensees.
  2. The department may enter into agreements with financial institutions to permit the sale of stamps by those institutions. The department shall make a list of financial institutions authorized to sell stamps under this section available to the public.
  3. The department may limit the number of stamps sold to a licensee during the three months immediately preceding the effective date of a tax increase under AS 43.50.090 , 43.50.190 , or 43.50.200 to minimize the amount of cigarette stockpiling by a licensee. The department may not set the limit of stamps that a licensee may purchase during that three-month period below an amount equal to three times the average monthly stamp purchases made by the licensee during the 12-month period immediately preceding that three-month period.

History. (§ 19 ch 109 SLA 2003; am § 23 ch 1 FSSLA 2004)

Sec. 43.50.540. Purchase of and payment for stamps.

  1. A licensee shall apply to the department or a financial institution authorized under AS 43.50.530(b) to purchase stamps required by AS 43.50.500 43.50.700 .
  2. A licensee may authorize an agent or designee to purchase stamps for the licensee at a location where stamps are sold. The licensee’s authorization of an agent or designee must be in writing and must be signed by the licensee. The licensee shall provide a copy of the authorization to the department. The authorization continues in effect until the department receives the licensee’s written notice of revocation of the authorization.
  3. Except as otherwise provided in this subsection, each stamp shall be sold to a licensee at its denominated value less the discount provided in this subsection. The discount under this subsection is provided as compensation for affixing stamps to packages as required by AS 43.50.500 43.50.700 . The department may reduce or eliminate the discount to a licensee under this subsection if the licensee fails to meet the requirements of AS 43.50.500 43.50.700 . The discount under this subsection is equal to the sum of the amounts calculated using the following percentages of denominated value of stamps purchased by a licensee under this section in a calendar year:
    1. $1,000,000 or less, three percent;
    2. the amount that is more than $1,000,000 but not more than $2,000,000, two percent;
    3. the amount that is over $2,000,000, zero percent.
  4. Payment for stamps shall be made at the time of purchase, except that the department may permit a licensee to defer payments as provided in AS 43.50.550 .
  5. The licensee or the licensee’s agent or designee must obtain the stamps in person from the department or a financial institution authorized to sell stamps under AS 43.50.530(b) . Alternatively, the licensee may request in writing that the stamps be shipped or transported in a manner specified by the licensee that is acceptable to the department. The department may accept only United States mail or common or private carrier as a shipping or transportation method.
  6. Title to the stamps passes immediately to the licensee at the time the stamps are obtained in person or, if the stamps are shipped or transported, at the time the stamps are placed in the United States mail or received by the common or private carrier. The licensee bears all costs associated with shipping or transporting the stamps. The department may replace stamps lost or damaged in transit if the licensee provides proof acceptable to the department verifying that the loss or damage occurred while the stamps were in the possession of the shipping company and the shipping company substantiates the loss or damage. Damaged stamps must be returned to the department before the department may replace them.
  7. Loss, destruction, or theft of stamps does not absolve the licensee of its obligation to make payment for the stamps, including payment on a deferred-payment basis under AS 43.50.550 .
  8. For purposes of the discount provided in (c) of this section, “stamps purchased by a licensee” includes stamps purchased by affiliated licensees.

History. (§ 19 ch 109 SLA 2003; am § 24 ch 1 FSSLA 2004)

Sec. 43.50.550. Deferred-payment basis for stamps.

  1. A licensee may apply to the department to purchase stamps on a deferred-payment basis. Upon receipt of the application and the bond required under (b) of this section, the department may set the maximum dollar amount of stamps that the licensee is authorized to purchase on a deferred-payment basis in a calendar month.
  2. A licensee who submits an application for the purchase of stamps on a deferred-payment basis shall, as a condition of approval of the application, post a bond acceptable to the department in an amount equal to
    1. 200 percent of the maximum dollar amount of allowed monthly purchases under this section; or
    2. 100 percent of the maximum dollar amount of allowed monthly purchases under this section if the licensee
      1. holds a license issued under AS 43.50.010 for a physical location in this state; and
      2. has been in full compliance with the provisions of this title and regulations adopted under this title during the preceding 60 months.
  3. Amounts owing for stamps purchased on a deferred-payment basis in a calendar month are due on or before the last day of the next calendar month. Payment shall be made by a remittance acceptable to the department that is made payable to the department.
  4. The department may designate the sales locations where the licensee may make purchases of stamps on a deferred-payment basis and fix the dollar amount of purchases that the licensee may make under this section at each designated sales location each month.

History. (§ 19 ch 109 SLA 2003; am § 25 ch 1 FSSLA 2004)

Sec. 43.50.560. Suspension of deferred-payment basis privilege.

The department may suspend, without prior notice, a licensee’s privilege to purchase stamps on a deferred-payment basis or may reduce the monthly dollar amount of purchases the licensee may make under AS 43.50.550 if

  1. the licensee fails to pay for stamps when payment is due;
  2. the licensee’s bond is cancelled or becomes void, impaired, or unenforceable;
  3. the department determines that the collection of an amount unpaid or due from the licensee under this chapter is jeopardized; or
  4. the licensee violates a state statute or regulation related to the collection of taxes under this chapter.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.570. Interest.

A licensee who fails to pay an amount due for the purchase of stamps within the time required

  1. is considered to have failed to pay the cigarette taxes due under this chapter; and
  2. shall pay interest at the rate established under AS 43.05.225 from the date on which the amount became due until the date of payment.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.580. Possession of unstamped cigarettes.

  1. Except as provided in (b) of this section and in AS 43.50.610 , a person may not possess unstamped cigarettes in this state.
  2. A licensee may possess unstamped cigarettes in this state if
    1. the licensee posts a surety bond in an amount satisfactory to the department to ensure performance of its duties under this chapter; and
    2. unstamped cigarettes are necessary for the conduct of the licensee’s business in making sales or distributions to
      1. an instrumentality of the federal government or an Indian tribal organization authorized by law to possess cigarettes not taxed under this chapter; or
      2. customers outside the state and the licensee provides proof acceptable to the department that the licensee is properly licensed in the jurisdictions outside the state where the sales or distributions are made.
  3. At the time of shipping or delivering cigarettes to an instrumentality of the federal government or an Indian tribal organization authorized by law to possess cigarettes not taxed under this chapter, a licensee shall make a duplicate invoice showing complete details of the shipment or other distribution and a statement indicating whether stamps were affixed to each cigarette package in accordance with AS 43.50.500 43.50.700 . The licensee shall transmit the duplicate invoice to the department as an attachment to the monthly report required under AS 43.50.630 .
  4. If a licensee who is authorized to possess unstamped cigarettes under (b) of this section fails to comply with the requirements of this section, the licensee is no longer authorized to and may not possess unstamped cigarettes under this section and is subject to the imposition of any applicable penalty under this title or other law.
  5. For purposes of (a) of this section, “person” does not include entities to whom sales or distributions are made as described in (b)(2) of this section.

History. (§ 19 ch 109 SLA 2003; am § 26 ch 1 FSSLA 2004)

Sec. 43.50.590. Refunds or credits for unused stamps and for unsalable, destroyed, or certain returned cigarette packages.

  1. The department shall adopt procedures for a refund or credit to a licensee in the amount of the denominated value, less the discount given under AS 43.50.540 , for
    1. unused or damaged stamps;
    2. stamps affixed to cigarette packages that have become unfit for use or sale, are destroyed, or are returned to the manufacturer for credit or replacement if the licensee provides proof acceptable to the department that the cigarettes have not been and will not be consumed in this state; or
    3. stamps affixed to cigarette packages that are sold or distributed outside the state if the licensee provides proof acceptable to the department that the cigarettes have not been and will not be consumed in this state and the licensee is properly licensed in the jurisdictions outside the state where the sales or distributions are made.
  2. A refund or credit under (a) of this section may not be allowed for stamps affixed to cigarette packages in violation of this chapter or AS 45.53.

History. (§ 19 ch 109 SLA 2003; am § 27 ch 1 FSSLA 2004)

Sec. 43.50.600. Stamps prohibited on cigarette packages not complying with federal and state laws.

A licensee or the licensee’s authorized agent or designee may not affix a stamp to a cigarette package if the cigarettes

  1. may not be acquired, held, owned, imported, possessed, sold, or distributed in this state under AS 43.50.400 ; or
  2. are not in compliance with other state or federal laws.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.610. Unstamped cigarettes as contraband; seizure.

Unstamped cigarettes found in this state are contraband and may be seized by the commissioner or an agent or employee of the commissioner or by any peace officer of the state, unless

  1. the cigarettes are
    1. in the possession of a licensee or are in transit from outside the state and are consigned to a licensee; and
    2. in the original and unopened shipping container; or
  2. possession of the unstamped cigarettes is not a violation of this chapter.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.620. Forfeiture and destruction of seized cigarettes.

Cigarettes seized under AS 43.50.500 43.50.700 are forfeited to the state. After notice and an opportunity for a hearing, the commissioner shall destroy the cigarettes forfeited under this section.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.625. Forfeiture of other property.

  1. Upon a showing of probable cause that a person has committed the crime of misconduct involving unstamped cigarettes or stamps in the first degree under AS 43.50.640 , the following are subject to forfeiture:
    1. material and equipment used in the manufacture, sale, offering for sale, or possession for sale of cigarettes in this state in violation of AS 43.50.500 43.50.640 or 43.50.660 43.50.700 ;
    2. aircraft, vehicles, or vessels used to transport or facilitate the transportation of cigarettes manufactured, sold, offered for sale, or possessed for sale in this state in violation of AS 43.50.500 — 43.50.640 or 43.50.660 43.50.700 ;
    3. money, securities, negotiable instruments, or other things of value used in financial transactions derived from activity prohibited under AS 43.50.500 — 43.50.640 or 43.50.660 — 43.50.700.
  2. Property subject to forfeiture under this section may be actually or constructively seized under an order issued by the superior court upon a showing of probable cause that the property is subject to forfeiture under this section. Constructive seizure is effected upon posting a signed notice of seizure on the item to be forfeited, stating the violation and the date and place of seizure. Seizure without a court order may be made if
    1. the seizure is incident to a valid arrest or search;
    2. the property subject to seizure is the subject of a prior judgment in favor of the state; or
    3. there is probable cause to believe that the property is subject to forfeiture under (a) of this section; property seized under this paragraph may be held for not more than 48 hours unless an order of forfeiture is issued by the court before the end of that time period.
  3. Within 30 days after a seizure under this section, the Department of Public Safety shall make reasonable efforts to ascertain the identity and whereabouts of any person holding an interest, or an assignee of a person holding an interest, in the property seized, including a right to possession, or a lien, mortgage, or conditional sales contract. The Department of Public Safety shall notify the person ascertained to have an interest in the seized property of the impending forfeiture, and, before forfeiture, the Department of Public Safety shall publish, once a week for four consecutive calendar weeks, a notice of the impending forfeiture in a newspaper of general circulation in the judicial district in which the seizure was made, or if a newspaper is not published in that judicial district, in a newspaper published in the state and distributed in that judicial district.
  4. Property subject to forfeiture under (a) of this section may be forfeited
    1. upon conviction of a person for a violation of AS 43.50.640 ; or
    2. upon judgment by the superior court in a proceeding in rem that the property was used in a manner subjecting it to forfeiture under (a) of this section.
  5. The owner of property subject to forfeiture under (a) of this section is entitled to relief from the forfeiture in the nature of remission of the forfeiture if, in an action under (d) of this section, the owner shows that the owner
    1. was not a party to the violation;
    2. did not have actual knowledge or reasonable cause to believe that the property was used or was to be used in violation of the law; and
    3. did not have actual knowledge or reasonable cause to believe that the person committing the violation had, within the last 10 years,
      1. a criminal record for violating this chapter; or
      2. committed other violations of this chapter.
  6. The court may allow the owner of property that is subject to forfeiture under (a) of this section to redeem the property by paying an amount determined by the court to be the fair market value of the property.
  7. A person other than the owner holding, or the assignee of, a lien, mortgage, or conditional sales contract on, or the right to possession of, property subject to forfeiture under (a) of this section is entitled to relief from the forfeiture in the nature of remission of the forfeiture if, in an action under (d) of this section, the person shows that the person
    1. was not a party to the violation subjecting the property to forfeiture;
    2. did not have actual knowledge or reasonable cause to believe that the property was used or was to be used in violation of the law; and
    3. did not have actual knowledge or reasonable cause to believe that the person committing the violation had, within the last 10 years,
      1. a criminal record for violating this chapter; or
      2. committed other violations of this chapter.
  8. It is not a defense in an in rem forfeiture proceeding brought under (d)(2) of this section that a criminal proceeding is pending or has resulted in conviction or acquittal of a person charged with violating AS 43.50.640 .
  9. Property forfeited under this section shall be placed in the custody of the commissioner of public safety for disposition according to an order entered by the court. The court shall order destroyed any property forfeited under this section that is harmful to the public and may order any property forfeited under this section that was seized in a municipality to be transferred to the municipality in which the property was seized or to another municipality affected by the crime for which the property was forfeited. The state shall notify all municipalities affected by the crime of the forfeiture proceeding. Other property shall be ordered sold and the proceeds used for payment of expenses of the proceedings for forfeiture and sale, including expenses of seizure, custody, and court costs. The remainder of the proceeds shall be deposited in the general fund.
  10. The title to a vehicle or vessel forfeited to the state under this section may be transferred by the state to a municipality or the local governing body of a village for official use by the municipality or village, on condition that the vehicle or vessel not be available for use by the defendant.

History. (§ 28 ch 1 FSSLA 2004)

Sec. 43.50.630. Monthly reports; records retention; inspection of records.

  1. On or before the last day of each calendar month, a licensee shall file the following information for each place of business with the department, on a form or in a format prescribed by the department:
    1. the quantity and brands of cigarettes manufactured, imported, acquired, or sold in the state during the preceding calendar month;
    2. the number and dollar amount of stamps
      1. purchased during the preceding calendar month;
      2. affixed to cigarette packages during the preceding calendar month;
      3. not affixed to cigarette packages and on hand at the end of the preceding calendar month; and
      4. refunded or credited to a licensee under AS 43.50.590 ; and
    3. any other information that the department requires to carry out its duties under this chapter.
  2. If a licensee ceases to manufacture, import, acquire, or sell cigarettes in this state, the licensee shall immediately file the form required under (a) of this section with the department, for the period ending with the cessation.
  3. All statements and other records required by AS 43.50.500 43.50.700 must be
    1. in a form or format prescribed by the department;
    2. preserved by a licensee for a period of three years; and
    3. available for inspection at any time upon oral or written demand by the department or its authorized agent.
  4. A summary of information filed under (a) of this section shall be prepared by the department and released to the public upon request.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.640. Misconduct involving unstamped cigarettes or stamps in the first degree.

  1. A person commits the crime of misconduct involving unstamped cigarettes or stamps in the first degree if the person
    1. with reckless disregard that the cigarettes are unstamped
      1. sells or distributes 5,000 or more unstamped cigarettes in a single transaction;
      2. owns or possesses 5,000 or more unstamped cigarettes with the intent to sell; or
      3. acquires, holds, transports, imports, or possesses 10,000 or more unstamped cigarettes; or
    2. with reckless disregard that the stamp was previously affixed to another cigarette package
      1. affixes a previously used stamp to a cigarette package; or
      2. possesses, sells, or distributes a previously used stamp.
  2. Misconduct involving unstamped cigarettes or stamps in the first degree is a class C felony.

History. (§ 19 ch 109 SLA 2003; am § 29 ch 1 FSSLA 2004)

Cross references. —

For punishment for class C felonies, see AS 12.55.125(e) for imprisonment and AS 12.55.035 for fines.

Sec. 43.50.650. Misconduct involving unstamped cigarettes or stamps in the second degree.

  1. A person commits the crime of misconduct involving unstamped cigarettes or stamps in the second degree if the person
    1. with reckless disregard that the cigarettes are unstamped
      1. sells or distributes at least one but fewer than 5,000 unstamped cigarettes in a single transaction;
      2. owns or possesses at least one but fewer than 5,000 unstamped cigarettes, with intent to sell;
      3. acquires, holds, transports, imports, or possesses at least 601 but fewer than 10,000 unstamped cigarettes; or
      4. acquires, holds, transports, imports, or possesses at least one but fewer than 601 unstamped cigarettes that are not for personal consumption; or
    2. is not licensed under this chapter or otherwise authorized by the department to possess stamps and possesses a stamp that is not affixed to a cigarette package.
  2. Misconduct involving unstamped cigarettes or stamps in the second degree is a class A misdemeanor.

History. (§ 19 ch 109 SLA 2003; am § 30 ch 1 FSSLA 2004)

Cross references. —

For punishment of class A misdemeanors, see AS 12.55.135(a) for imprisonment and AS 12.55.035 for fines.

Sec. 43.50.660. Construction of criminal statutes.

  1. The provisions of AS 11.16, AS 11.81.600 , 11.81.610 , and 11.81.900 apply to AS 43.50.640 and 43.50.650 .
  2. For purposes of AS 43.50.640 and 43.50.650 , display of cigarettes by a person, or possession other than in the original and unopened shipping container of cigarettes by a person who holds a business license endorsement under AS 43.70.075 , is prima facie evidence of possession with intent to sell cigarettes. In this subsection, “display” means to openly exhibit.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.670. Unauthorized transfer of unaffixed stamps.

  1. A licensee may not sell, exchange, or otherwise transfer stamps not affixed to a package of cigarettes in accordance with this chapter to another person without the prior written approval of the department.
  2. After notice and opportunity for a hearing, the department may assess a civil fine of not less than $1,000 nor more than $10,000 for a violation of (a) of this section. The fine assessed is in addition to any other penalty available under the law.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.700. Definitions.

In AS 43.50.500 43.50.700 , unless the context otherwise requires,

  1. “affiliated licensees” means two or more licensees in which the same person holds, directly or indirectly, at least a 50 percent ownership interest;
  2. “carton” means a box or container originating from the manufacturer that contains packages of that manufacturer’s cigarettes;
  3. “cigarette” has the meaning given in AS 43.50.170 ;
  4. “licensee” means a person licensed by the department under AS 43.50.010 or 43.50.035 to sell, distribute, purchase, possess, or acquire cigarettes;
  5. “package” means the individual packet, box, or other container, originating from the manufacturer, in which retail sales of cigarettes are normally made or intended to be made; “package” does not include containers that are cartons, cases, bales, or boxes that contain packages of cigarettes;
  6. “person” has the meaning given in AS 43.50.170 ;
  7. “shipping container” means the case, box, parcel, or other container in which cartons or packages of cigarettes are placed for shipment or transportation from one place to another; “shipping container” does not include a package in which retail sales of cigarettes are normally made or intended to be made;
  8. “stamp” means a stamp or other indicium that is
    1. printed, manufactured, or made under authorization of the department under this chapter;
    2. issued, sold, or circulated by the department; and
    3. used to pay the cigarette taxes levied under this chapter;
  9. “unstamped cigarettes” means a package containing cigarettes that is not affixed with the stamp required by AS 43.50.500 43.50.700 or is affixed with a stamp in a denomination less than the tax levied under this chapter.

History. (§ 19 ch 109 SLA 2003; am § 31 ch 1 FSSLA 2004)

Article 7. Unfair Cigarette Sales.

Sec. 43.50.710. Sale at less than minimum price; rebate in price.

  1. A wholesaler or retailer may not, with intent to injure competitors or destroy or substantially lessen competition,
    1. advertise, offer to sell, or sell, at retail or wholesale, cigarettes at less than the minimum price determined by the department under
      1. AS 43.50.810(a) for a sale at wholesale; or
      2. AS 43.50.810(b) for a sale at retail; or
    2. offer a rebate in price, give a rebate in price, offer a concession of any kind, or give a concession of any kind or nature in connection with the sale of cigarettes.
  2. A retailer may not induce or attempt to induce or procure or attempt to procure
    1. the purchase of cigarettes at a price less than the wholesale minimum price determined under AS 43.50.810(a) ;
    2. a rebate or concession of any kind or nature in connection with the purchase of cigarettes.
  3. Evidence of advertisement, offering to sell, or sale of cigarettes by a wholesaler or retailer at less than the applicable minimum price determined by the department under AS 43.50.810 , or evidence of an offer of a rebate in the price, the giving of a rebate in price, offer of a concession, or the giving of a concession of any kind or nature in connection with the sale of cigarettes, or the inducing, attempt to induce, the procuring, or the attempt to procure the purchase of cigarettes at a price less than the applicable minimum price determined by the department under AS 43.50.810 is prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition.
  4. Nothing in this section prohibits a manufacturer from offering promotions to a wholesaler or a retailer if the wholesale promotion is the same for all participating wholesalers and the retail promotion is the same for all participating retailers.
  5. A wholesaler or retailer who violates the provisions of this section is guilty of a class B misdemeanor.

History. (§ 19 ch 109 SLA 2003; am § 32 ch 1 FSSLA 2004; am §§ 1 — 3 ch 114 SLA 2010)

Revisor’s notes. —

Subsection (d) was enacted as (e) and relettered in 2004, at which time what was formerly subsection (d) was relettered as (e).

Cross references. —

For punishment of class B misdemeanors, see AS 12.55.135(b) for imprisonment and AS 12.55.035 for fines.

Sec. 43.50.720. Sale at less than minimum price; sale with gift or concession.

In all advertisements, offers for sale, or sales involving two or more items when at least one of the items is cigarettes at a combined price, and in all advertisements, offers for sale, or sales involving the giving of any gift, concession, or coupon of any kind in conjunction with the sale of cigarettes, the wholesaler’s or retailer’s combined selling price may not be less than the applicable minimum price determined by the department under AS 43.50.810 of the total of all articles, products, commodities, gifts, and concessions included in the transactions, except that, if any articles, products, commodities, gifts, or concessions are not cigarettes, the price shall be the applicable minimum price determined by the department under AS 43.50.810 .

History. (§ 19 ch 109 SLA 2003; am § 33 ch 1 FSSLA 2004; am § 4 ch 114 SLA 2010)

Sec. 43.50.730. Sale to another wholesaler. [Repealed, § 8 ch 114 SLA 2010.]

Sec. 43.50.740. Manufacturer price list.

  1. [Repealed, § 8 ch 114 SLA 2010.]
  2. [Repealed, § 43 ch 1 FSSLA 2004.]
  3. A manufacturer whose product is sold in the state directly or through an intermediary shall provide the department with a current price list for all brands of cigarettes of the manufacturer and shall notify the department at least three days before a price change takes effect.

History. (§ 19 ch 109 SLA 2003; am § 43 ch 1 FSSLA 2004; am §§ 5, 8 ch 114 SLA 2010)

Sec. 43.50.750. Contracts in violation of law are illegal.

A contract, express or implied, made by a person in violation of the provisions of AS 43.50.710 43.50.849 is illegal and void.

History. (§ 19 ch 109 SLA 2003)

Secs. 43.50.760, 43.50.770. Determination of cost; determination of cost of cigarettes purchased outside of ordinary channels of trade. [Repealed, § 8 ch 114 SLA 2010.]

Sec. 43.50.780. Injunction.

  1. The department or a person injured by a violation or who would suffer from any threatened violation of AS 43.50.710 43.50.849 may maintain an action to prevent, restrain, or enjoin the violation or threatened violation. If, in the action, a violation or threatened violation of AS 43.50.710 43.50.849 is established, the court may enjoin and restrain or otherwise prohibit the violation or threatened violation, and the court shall assess the costs of reasonable attorney fees against the defendant. In the action, it is not necessary that actual damages to the plaintiff be alleged or proved, but, if actual damages are alleged and proved, the plaintiff, in addition to injunctive relief and costs, including reasonable attorney fees, may recover actual damages.
  2. If injunctive relief is not requested or required, a person injured by a violation of AS 43.50.710 43.50.849 may maintain an action for damages in the appropriate court.

History. (§ 19 ch 109 SLA 2003)

Sec. 43.50.790. Administration of AS 43.50.710 — 43.50.849; regulations.

  1. The department
    1. shall administer AS 43.50.710 43.50.849 ;
    2. may adopt regulations relating to the administration and enforcement of AS 43.50.710 43.50.849 ;
    3. shall determine the applicable minimum price for cigarettes sold by a wholesaler or retailer as provided in AS 43.50.810 ;
    4. may, after reasonable notice and hearing, revoke or suspend a license issued under AS 43.50.010 or 43.50.035 to a person who refuses or neglects to comply with a provision of AS 43.50.710 — 43.50.849.
  2. The Department of Commerce, Community, and Economic Development may, after reasonable notice and hearing, revoke or suspend a license issued under AS 43.70.075 to a person who refuses or neglects to comply with a provision of AS 43.50.710 43.50.849 .

History. (§ 19 ch 109 SLA 2003; am § 36 ch 1 FSSLA 2004; am § 6 ch 114 SLA 2010)

Revisor’s notes. —

In 2004, in (b) of this section, “Department of Community and Economic Development” was changed to “Department of Commerce, Community, and Economic Development”, in accordance with § 3, ch. 47, SLA 2004.

Sec. 43.50.800. Presumptions applicable to determination of cost. [Repealed, § 8 ch 114 SLA 2010.]

Sec. 43.50.810. Minimum prices for cigarette sales.

  1. For the purposes of AS 43.50.710 43.50.849 , the department shall determine the minimum price for which a wholesaler may advertise, offer to sell, or sell cigarettes at wholesale by applying the following formula:
  2. For the purposes of AS 43.50.710 43.50.849 , the department shall determine the minimum price for which a retailer or wholesaler may advertise, offer to sell, or sell cigarettes at retail by multiplying by 1.04 the wholesale minimum price determined under (a) of this section.

Wholesale Minimum Price = 1.02(M — D + T),

where M = the manufacturer’s list price;

D = trade discounts; and

T = the full face value of all cigarette taxes.

History. (§ 7 ch 114 SLA 2010)

Sec. 43.50.845. Short title for AS 43.50.710 — 43.50.849.

AS 43.50.710 43.50.849 may be known as the Unfair Cigarette Sales Tax Act.

History. (§ 1 ch 109 SLA 2003)

Revisor’s notes. —

Enacted as § 1, ch. 109, SLA 2003, and codified in 2003.

Sec. 43.50.849. Definitions.

In AS 43.50.710 43.50.849 ,

  1. “cigarette” has the meaning given in AS 43.50.170 ;
  2. “department” means the Department of Revenue;
  3. “person” has the meaning given in AS 43.50.170 ;
  4. “retailer” has the meaning given in AS 43.50.170 and includes a person licensed or required to be licensed as a direct-buying retailer under this chapter and a person who holds or is required to hold a license endorsement under AS 43.70.075 ;
  5. “sale” has the meaning given in AS 43.50.170 ;
  6. “sell at retail,” “sale at retail,” or “retail sales” means a sale for consumption or use made in the ordinary course of trade or usual conduct of the seller’s business;
  7. “sell at wholesale,” “sale at wholesale,” or “wholesale sales” means a sale made in the ordinary course of trade or usual conduct by a wholesaler to a retailer for the purpose of resale;
  8. “trade discount” means a price reduction that is offered by a cigarette manufacturer on the date of sale, is reflected on the invoice as a deduction from the manufacturer’s list price, and is fully earned and determinable on the date of sale;
  9. “wholesaler” means a person licensed or required to be licensed under AS 43.50.010 or AS 43.50.035 and who sells cigarettes to a retailer for the purpose of resale.

History. (§ 19 ch 109 SLA 2003; am § 43 ch 1 FSSLA 2004; am § 8 ch 114 SLA 2010)

Revisor’s notes. —

In 2012, paragraphs in this section were renumbered to conform to 2004 and 2010 repeals of paragraphs.

Chapter 52. Transportation Taxes.

Article 1. Vehicle Rental Taxes.

Sec. 43.52.010. Levy of passenger vehicle rental tax.

There is imposed an excise tax on the charge for the lease or rental of a passenger vehicle in this state if the lease or rental of the passenger vehicle does not exceed a period of 90 consecutive days.

History. (§ 1 ch 105 SLA 2003)

Sec. 43.52.020. Rate of passenger vehicle rental tax.

The rate of the tax levied in AS 43.52.010 is 10 percent of the total fees and costs charged for the lease or rental of the passenger vehicle.

History. (§ 1 ch 105 SLA 2003)

Sec. 43.52.030. Levy of recreational vehicle rental tax.

There is imposed an excise tax on the charge for the lease or rental of a recreational vehicle in this state if the lease or rental of the recreational vehicle does not exceed a period of 90 consecutive days.

History. (§ 1 ch 105 SLA 2003)

Administrative Code. —

For vehicle rental tax, see 15 AAC 52, art. 1.

Sec. 43.52.040. Rate of recreational vehicle rental tax.

The rate of the tax levied in AS 43.52.030 is three percent of the total fees and costs charged for the lease or rental of the recreational vehicle.

History. (§ 1 ch 105 SLA 2003)

Administrative Code. —

For vehicle rental tax, see 15 AAC 52, art. 1.

Sec. 43.52.050. Liability for payment of vehicle rental taxes.

  1. The taxes imposed by AS 43.52.010 43.52.099 shall be collected and paid to the department
    1. by the person who provides the leased or rented vehicle; and
    2. in the manner and at the times required by the department by regulation.
  2. The tax shall be stated as a separate item on the lease or rental contract or other document invoicing payment.

History. (§ 1 ch 105 SLA 2003)

Revisor’s notes. —

In 2006, “AS 43.52.010 43.52.099 ” was substituted for “this chapter” to reflect the addition of AS 43.52.200 43.52.295 by 2006 Primary Ballot Measure No. 2.

Administrative Code. —

For vehicle rental tax, see 15 AAC 52, art. 1.

Sec. 43.52.060. Applicability of the tax.

The provisions of AS 43.52.010 43.52.099 apply to a passenger or recreational vehicle whether or not the vehicle is registered and licensed in this state.

History. (§ 1 ch 105 SLA 2003)

Revisor’s notes. —

In 2006, “AS 43.52.010 43.52.099 ” was substituted for “this chapter” to reflect the addition of AS 43.52.200 - 43.52.295 by 2006 Primary Ballot Measure No. 2.

Sec. 43.52.070. Relationship to municipal levies.

The taxes imposed by AS 43.52.010 43.52.099 are in addition to taxes that may be imposed on vehicle rentals by a municipality under AS 29.45.

History. (§ 1 ch 105 SLA 2003)

Revisor’s notes. —

In 2006, “AS 43.52.010 43.52.099 ” was substituted for “this chapter” to reflect the addition of AS 43.52.200 43.52.295 by 2006 Primary Ballot Measure No. 2.

Sec. 43.52.080. Administration of tax and sharing of information with municipalities.

  1. The department shall administer the taxes imposed by this chapter and may adopt necessary regulations.
  2. The proceeds of the vehicle rental taxes imposed by AS 43.52.010 43.52.099 shall be deposited into a special vehicle rental tax account in the general fund.
  3. The legislature may appropriate the actual balance of the vehicle rental tax account for tourism development and marketing. This section is not intended to create a dedicated fund.
  4. Notwithstanding AS 40.25.100(a) and AS 43.05.230(a) , the department may furnish the proper officer or representative of a municipality the tax returns or reports filed with the department under AS 43.52.010 43.52.099 if the municipality grants substantially similar privileges to the department, provides adequate safeguards for the confidentiality of the returns and reports, and uses the returns and reports only for tax purposes.

History. (§ 1 ch 105 SLA 2003; am § 2 ch 74 SLA 2014)

Revisor’s notes. —

In 2006, “AS 43.52.010 43.52.099 ” was substituted for “this chapter” to reflect the addition of AS 43.52.200 43.52.295 by 2006 Primary Ballot Measure No. 2.

Administrative Code. —

For vehicle rental tax, see 15 AAC 52, art. 1.

Sec. 43.52.090. Exemption.

The tax imposed in AS 43.52.010 43.52.099 does not apply to leases or rentals for official use to federal, state, or local government agencies or employees.

History. (§ 1 ch 105 SLA 2003)

Revisor’s notes. —

In 2006, “AS 43.52.010 43.52.099 ” was substituted for “this chapter” to reflect the addition of AS 43.52.200 43.52.295 by 2006 Primary Ballot Measure No. 2.

Sec. 43.52.099. Definitions.

In AS 43.52.010 43.52.099 ,

  1. “fees and costs” means all charges incurred by the renter before the tax imposed under AS 43.52.010 43.52.099 except
    1. fees from the sale of automobile liability insurance, loss damage waiver insurance, and personal accident insurance;
    2. parking tickets;
    3. sales or excise taxes;
    4. payment for damages to the vehicle during the rental period;
    5. concession fees paid to an airport;
    6. customer facility charges set by the commissioner of transportation and public facilities under AS 02.15.090 ; and
    7. customer facility maintenance charges set by the commissioner of transportation and public facilities under AS 02.15.090 ;
  2. “passenger vehicle” means a motor vehicle as defined in AS 28.90.990 that is driven or moved on a highway or other public right-of-way in the state, but does not include
    1. a commercial motor vehicle as that term is defined in AS 28.90.990 ;
    2. emergency or fire equipment that is necessary to the preservation of life or property;
    3. a farm vehicle that is controlled and operated by a farmer, used to transport agricultural products, farm machinery, or farm supplies to or from that farmer’s farm, not used in the operations of a common or contract motor carrier, and used within 150 miles of the farmer’s farm;
    4. a recreational vehicle;
    5. a taxicab;
    6. a rental truck; in this subparagraph, “rental truck” means a motor vehicle with a gross vehicle weight rating greater than 8,500 pounds that is designed, used, or maintained primarily for the transportation of personal property;
    7. a vehicle provided by an automobile dealer to a customer as replacement transportation during warranty, recall, or service contract repairs if the dealer does not receive compensation from the customer; or
    8. a motorcycle or a motor-driven cycle as those terms are defined in AS 28.90.990;
  3. “recreational vehicle” means
    1. a motor vehicle or trailer for recreational dwelling purposes;
    2. a motor home or other vehicle with a motor home body style;
    3. a one-piece camper vehicle; and
    4. any other self-propelled vehicle with living quarters;
  4. “tax” means the excise tax levied under AS 43.52.010 43.52.099 on the charge made for the rental of a passenger or recreational vehicle;
  5. “vehicle” means a device in, upon, or by which a person or property may be transported or drawn upon or immediately over a highway or vehicular way or area; “vehicle” does not include
    1. devices used exclusively upon stationary rails or tracks;
    2. mobile homes; or
    3. watercraft.

History. (§ 1 ch 105 SLA 2003; am § 1 ch 29 SLA 2004; am § 7 ch 5 SLA 2005; am § 1 ch 1 SLA 2006; am § 1 ch 8 SLA 2013)

Revisor’s notes. —

In 2006, in (2) of this section, “AS 28.90.990 ” was substituted for “AS 28.40.100 ” to reflect the 2006 renumbering of AS 28.40.100 .

In 2006, “AS 43.52.010 43.52.099 ” was substituted for “this chapter” to reflect the addition of AS 43.52.200 43.52.295 by 2006 Primary Ballot Measure No. 2.

Article 2. Excise Tax on Travel Aboard Commercial Passenger Vessels.

Editor’s notes. —

Section 11, 2006 Primary Election Ballot Measure No. 2, part of the initiative that enacted this article, provides that “[I]t is the intention of the people of Alaska that any portion of this legislation that is declared unlawful shall be stricken in a manner that preserves the remaining portion of the remaining legislation to the maximum extent possible.”

Sec. 43.52.200. Levy of excise tax on overnight accommodations on commercial passenger vessels.

There is imposed an excise tax on passengers traveling on commercial passenger vessels providing overnight accommodations that anchor or moor on the state’s marine water with the intent to allow passengers to embark or disembark.

History. (§ 1, 2006 Primary Election Ballot Measure No. 2; am § 2 ch 101 SLA 2010)

Revisor’s notes. —

Enacted by 2006 Primary Election Ballot Measure No. 2 as AS 43.52.010 ; renumbered in 2006.

Sec. 43.52.210. Rate of tax.

The tax imposed by AS 43.52.200 43.52.295 is levied at a rate of $34.50 for a passenger for each voyage.

History. (§ 1, 2006 Primary Election Ballot Measure No. 2; am § 3 ch 101 SLA 2010)

Revisor’s notes. —

Enacted by 2006 Primary Election Ballot Measure No. 2 as AS 43.52.020 ; renumbered in 2006, at which time “AS 43.52.200 43.52.295 ” was substituted for “AS 43.52.010 — 43.52.095” to reflect the renumbering of the material added by that initiative.

Sec. 43.52.220. Liability for payment of tax.

A passenger subject to the excise tax imposed by AS 43.52.200 43.52.295 is liable for the payment of the tax. The tax shall be collected from the passenger by the person who provides travel aboard a commercial vessel and shall be paid to the department in the manner and at the times required by the department by regulation.

History. (§ 1, 2006 Primary Election Ballot Measure No. 2; am § 4 ch 101 SLA 2010)

Revisor’s notes. —

Enacted by 2006 Primary Election Ballot Measure No. 2 as AS 43.52.030 ; renumbered in 2006, at which time “AS 43.52.200 43.52.295 ” was substituted for “AS 43.52.010 — 43.52.095” to reflect the renumbering of the material added by that initiative.

Administrative Code. —