CSSSHB 204(FIN): "An Act relating to a product development tax credit for certain salmon and herring products; and providing for an effective date."
00 CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 204(FIN) 01 "An Act relating to a product development tax credit for certain salmon and herring 02 products; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 43.75.035(a) is amended to read: 05 (a) A taxpayer that is a fisheries business may claim a [SALMON] product 06 development tax credit of 50 percent of qualified investment in new property first 07 placed into service in a shore-based plant or on a vessel in the state in the tax year. 08 * Sec. 2. AS 43.75.035(b) is amended to read: 09 (b) The amount of the tax credit applied against taxes under this section may 10 not 11 (1) exceed 50 percent of the taxpayer's tax liability incurred under this 12 chapter for processing of salmon and herring during the tax year; or 13 (2) be claimed for property first placed into service after December 31, 14 2020 [2015].
01 * Sec. 3. AS 43.75.035(c) is amended to read: 02 (c) If the property for which a tax credit is claimed is installed on a vessel, the 03 amount of qualified investment under (a) of this section is determined by multiplying 04 the investment cost of the qualified investment property by a fraction, the numerator 05 of which is the weight of raw salmon or raw herring processed on the vessel by the 06 taxpayer in the state in the tax year in which the property is first placed into service, 07 and the denominator of which is the weight of raw salmon or raw herring processed 08 on the vessel by the taxpayer in and outside of the state in the tax year in which the 09 property is first placed into service. 10 * Sec. 4. AS 43.75.035(d) is amended to read: 11 (d) An unused credit under this section may be carried forward and applied 12 against the tax liability incurred on salmon and herring in the following three tax 13 years. 14 * Sec. 5. AS 43.75.035(g) is amended to read: 15 (g) If, during a tax year, property for which a credit was claimed under this 16 section is disposed of by the taxpayer, ceases to be qualified investment property, or is 17 removed from service in the state, the tax due under this chapter is increased by the 18 recapture percentage of the aggregate decrease in the credit allowed under this section 19 for all prior tax years that would have resulted solely from reducing to zero the credit 20 allowed for the qualified investment property under this section. The amount of tax 21 credit attributable to the qualified investment that is carried forward from prior tax 22 years is terminated as of the first day of the tax year in which the qualified investment 23 property is disposed of by the taxpayer, ceases to be qualified investment property, or 24 is removed from service in the state. For purposes of this subsection, 25 (1) the recapture percentage during the year in which the property is 26 first placed into service or during the first year following the year in which the 27 property is first placed into service is 100 percent; 28 (2) the recapture percentage during the second year following the year 29 in which the property is first placed into service is 75 percent; 30 (3) the recapture percentage during the third year following the year in 31 which the property is first placed into service is 50 percent;
01 (4) the recapture percentage during the fourth or subsequent year 02 following the year in which the property is first placed into service is zero percent; 03 (5) qualified investment property used on a vessel is considered to 04 have been removed from the state on the first day of a tax year in which the proportion 05 of raw salmon or raw herring processed in the state on the vessel is less than 50 06 percent of total weight of raw salmon or raw herring processed on the vessel in and 07 outside of the state. 08 * Sec. 6. AS 43.75.035(i) is amended to read: 09 (i) The department shall develop and implement procedures by which a 10 taxpayer that is a fisheries business may submit the taxpayer's proposed investment to 11 the department and request a preliminary determination of whether the investment 12 qualifies for the [SALMON] product development tax credit under this section. A 13 preliminary determination by the department that the taxpayer's submission qualifies 14 for the credit is binding, unless the department determines that the taxpayer has made 15 a material misrepresentation in the taxpayer's submission. 16 * Sec. 7. AS 43.75.035(j)(3) is amended to read: 17 (3) "qualified investment" means the investment cost to purchase or 18 convert [IN] depreciable tangible personal property with a useful life of three years or 19 more to be used predominantly to perform an ice making, processing, packaging, or 20 product finishing function that is a significant component in producing value-added 21 salmon or herring products, including canned salmon products in can sizes other 22 than 14.75 ounces or 7.5 ounces [BEYOND GUTTING OF THE SALMON]; in this 23 paragraph, "property" 24 (A) includes 25 (i) equipment used to fillet, skin, portion, mince, 26 form, extrude, stuff, inject, mix, marinate, preserve, dry, smoke, 27 brine, package, freeze, scale, grind, separate meat from bone, or 28 remove pin bones [FILLETING, SKINNING, PORTIONING, 29 MINCING, FORMING, EXTRUDING, STUFFING, INJECTING, 30 MIXING, MARINATING, PRESERVING, DRYING, SMOKING, 31 BRINING, PACKAGING, BLAST FREEZING, OR PIN BONE
01 REMOVAL EQUIPMENT]; 02 (ii) new parts necessary for, or costs associated with, 03 converting a canned salmon line to produce can sizes other than 04 14.75 ounces or 7.5 ounces [TO CONVERT AN EXISTING CAN 05 SEAMER TO POP-TOP CAN PRODUCTION]; 06 (iii) conveyors used specifically in the act of producing 07 a value-added salmon or herring product; [AND] 08 (iv) ice making machines; 09 (v) new canning equipment for herring products; 10 and 11 (vi) equipment used to transform salmon or herring 12 byproduct that is discarded as waste into saleable product; 13 (B) does not include 14 (i) vehicles, forklifts, conveyors not used specifically in 15 the act of producing a value-added salmon or herring product, cranes, 16 pumps, or other equipment used to transport salmon or herring, or 17 salmon or herring products, knives, gloves, tools, supplies and 18 materials, equipment, other than ice making machines, that is not 19 processing, packaging, or product finishing equipment, or other 20 equipment, the use of which is incidental to the production, packaging, 21 or finishing of value-added salmon or herring products; [OR] 22 (ii) the overhaul, retooling, or modification of new or 23 existing property, except for new parts necessary for, or costs 24 associated with, converting a canned salmon line to produce can 25 sizes other than 14.75 ounces or 7.5 ounces; or 26 (iii) property used predominantly to produce a 27 salmon or herring product that is not taxed under this chapter [TO 28 CONVERT AN EXISTING CAN SEAMER TO POP-TOP CAN 29 PRODUCTION]; 30 * Sec. 8. AS 43.75.035(j)(6) is amended to read: 31 (6) "value-added salmon or herring product" means the product of a
01 salmon or herring that is processed beyond heading, gutting, or separation in a 02 manner that [MATERIALLY] enhances the value or quality of the salmon or herring 03 product, such as shelf-stable, retort pouched, smoked, pickled, or filleted salmon, 04 ikura, leather, [OR] jerky, or a saleable product made from waste byproduct of 05 salmon or herring; "value-added salmon or herring product" does not include a 06 salmon or herring or salmon or herring product that 07 (A) has been subjected to only one or more of heading, gutting, 08 freezing, or packaging [, QUALITY ASSURANCE PRACTICES, OR 09 VALUE RETENTION PRACTICES]; 10 (B) is salmon skeins or other unprocessed salmon or 11 unprocessed herring products whether fresh or frozen; or 12 (C) [IS CANNED, EXCEPT FOR SALMON PRODUCTS IN 13 A POP-TOP CAN; OR 14 (D)] is produced out of the state. 15 * Sec. 9. This Act takes effect immediately under AS 01.10.070(c).