Section 43.55.014. Payment in gas of tax for gas.

   (a) For gas produced on and after January 1, 2022, other than gas described in (e) of this section, the department shall allow a producer to make an election, under regulations adopted by the department, to pay in gas the production tax levied by this section in lieu of the tax otherwise levied for the gas by AS 43.55.011(e). An election under this subsection applies only to gas produced from oil and gas leases modified under AS 38.05.180(hh) from which the commissioner of natural resources has determined to take royalty gas in kind under AS 38.05.182.
   (b) A production tax levied by this section is equal to 13 percent of the gas otherwise taxable under AS 43.55.011(e)(3) produced from each oil and gas lease to which an effective election under (a) of this section applies, when and as that gas is produced. The producer shall pay the tax in gas by delivering that 13 percent of the gas to the state at the point of production.
   (c) The Department of Natural Resources shall manage under AS 38.05.020(b)(14) the custody and disposition of gas delivered to the state under (b) of this section.
   (d) An assessment under AS 43.05.245 against a producer for an underpayment of a tax levied by this section may be made in terms of an amount of gas or an amount of money, as determined under regulations adopted by the department. If the assessment is made in terms of money, the amount for a month of production for an oil and gas lease subject to an effective election under (a) of this section is the product of the number of units of gas by which the producer's delivery to the state was less than the amount required by (b) of this section, multiplied by the average gross value at the point of production for each unit of the gas produced by the producer from the lease during the month other than gas that was not subject to tax or gas that was delivered to the state under (b) of this section. The department may allow a credit or refund under AS 43.05.275 for an overpayment of a tax levied by this section that may be issued in the form of gas or money, as determined under regulations adopted by the department. If the credit or refund is allowed in terms of money, the amount of the credit or refund for a month of production for an oil and gas lease subject to an effective election under (a) of this section is the product of the number of units of gas by which the producer's delivery to the state was more than the amount required under (b) of this section, multiplied by the average gross value at the point of production for each unit of the gas produced by the producer from the lease during the month other than gas that was not subject to tax or gas that was delivered to the state under (b) of this section. Interest that is determined as a percentage of the amount of a tax underpayment or overpayment and a penalty that is a percentage of the amount of a tax underpayment are calculated as a percentage of the amount of money determined in this subsection. An amount of gas that was less than the amount required to be delivered to the state under (b) of this section or an amount of gas that was more than the amount required to be delivered to the state under (b) of this section that is adjusted as provided by a gas balancing agreement to which the state is a party under AS 38.05.020(b)(11) is not subject to assessment under AS 43.05.245 or a credit or refund under AS 43.05.275. In this subsection, "unit" means a unit of measurement for gas identified by the department under regulations adopted by the department and may be expressed as 1,000 cubic feet, 1,000,000 British thermal units, or another appropriate unit of measurement specified by the department under regulations adopted by the department.
   (e) This section does not apply to gas that, under AS 43.55.020(e), is considered as gas produced from a lease or property for the purpose of AS 43.55.011 - 43.55.180.

Authorities

38.05.020;38.05.180;38.05.183;43.05.010;43.05.230;43.20.144;43.55.011;43.55.020;43.55.030

Notes

References

AS 38.05.020 Authority and duties of the commissioner.
AS 38.05.180 Oil and gas and gas only leasing.
AS 38.05.183 Sale of royalty.
AS 43.05.010 Duties of commissioner.
AS 43.05.230 Disclosure of tax returns and reports.
AS 43.20.144 Oil and gas producers and pipelines.
AS 43.55.011 Oil and gas production tax.
AS 43.55.020 Payment of tax.
AS 43.55.030 Filing of statements.

History

(Sec. 47 ch 14 SLA 2014)