SCS CSHB 90(FIN): "An Act relating to a salmon product development tax credit and a salmon utilization tax credit under the Alaska fisheries business tax; and providing for an effective date."
00 SENATE CS FOR CS FOR HOUSE BILL NO. 90(FIN) 01 "An Act relating to a salmon product development tax credit and a salmon utilization 02 tax credit under the Alaska fisheries business tax; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 43.75 is amended by adding new sections to read: 05 Sec. 43.75.035. Salmon product development tax credit. (a) A taxpayer 06 that is a fisheries business may claim a salmon product development tax credit of 50 07 percent of qualified investment in new property first placed into service in a shore- 08 based plant or on a vessel in the state in the tax year. 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 during the tax year; or 13 (2) be claimed for property first placed into service after December 31, 14 2005.
01 (c) If the property for which a tax credit is claimed is installed on a vessel, the 02 amount of qualified investment under (a) of this section is determined by multiplying 03 the investment cost of the qualified investment property by a fraction, the numerator 04 of which is the weight of raw salmon processed on the vessel by the taxpayer in the 05 state in the tax year in which the property is first placed into service, and the 06 denominator of which is the weight of raw salmon processed on the vessel by the 07 taxpayer in and outside of the state in the tax year in which the property is first placed 08 into service. 09 (d) An unused credit under this section may be carried forward and applied 10 against the tax liability incurred on salmon in the following three tax years. 11 (e) Qualified investment costs upon which a tax credit is claimed under this 12 section may not be considered for another tax credit in this title. A tax credit applied 13 under this section together with a tax credit applied under AS 43.75.036 may not 14 exceed 50 percent of the taxpayer's tax liability incurred for the processing of salmon 15 during the tax year. 16 (f) A taxpayer may not claim the tax credit allowed under this section if the 17 taxpayer is in arrears in the payment of assessments under AS 16.51.120, contributions 18 under AS 23.20, or taxes or assessments collected or owed under this title. For 19 purposes of this subsection, a taxpayer is not in arrears if the liability for the 20 assessment, contribution, or tax is under administrative or judicial appeal. 21 (g) If, during a tax year, property for which a credit was claimed under this 22 section is disposed of by the taxpayer, ceases to be qualified investment property, or is 23 removed from service in the state, the tax due under this chapter is increased by the 24 recapture percentage of the aggregate decrease in the credit allowed under this section 25 for all prior tax years that would have resulted solely from reducing to zero the credit 26 allowed for the qualified investment property under this section. The amount of tax 27 credit attributable to the qualified investment that is carried forward from prior tax 28 years is terminated as of the first day of the tax year in which the qualified investment 29 property is disposed of by the taxpayer, ceases to be qualified investment property, or 30 is removed from service in the state. For purposes of this subsection, 31 (1) the recapture percentage during the year in which the property is
01 first placed into service or during the first year following the year in which the 02 property is first placed into service is 100 percent; 03 (2) the recapture percentage during the second year following the year 04 in which the property is first placed into service is 75 percent; 05 (3) the recapture percentage during the third year following the year in 06 which the property is first placed into service is 50 percent; 07 (4) the recapture percentage during the fourth or subsequent year 08 following the year in which the property is first placed into service is zero percent; 09 (5) qualified investment property used on a vessel is considered to 10 have been removed from the state on the first day of a tax year in which the proportion 11 of raw salmon processed in the state on the vessel is less than 50 percent of total 12 weight of raw salmon processed on the vessel in and outside of the state. 13 (h) The amount of a tax credit recaptured under (g)(1) - (3) of this section may 14 not be included in the determination of the amount of that tax credit that is allowable 15 under this section or AS 43.75.036. 16 (i) In this section, 17 (1) "first placed into service" means the moment when property is first 18 used for its intended purpose; 19 (2) "new property" means property whose original use commences 20 with the taxpayer and does not include property first used by another person; 21 (3) "qualified investment" means the investment cost in depreciable 22 tangible personal property with a useful life of three years or more to be used 23 predominantly to produce value-added salmon products beyond gutting of the salmon; 24 in this paragraph, "property" includes filleting, skinning, portioning, mincing, forming, 25 extruding, stuffing, injecting, mixing, marinating, preserving, drying, smoking, 26 brining, packaging, blast freezing, or pin bone removal equipment; 27 (4) "tax liability" means the liability for all taxes under this chapter 28 before all credits allowed by this chapter; 29 (5) "useful life" means the useful life of the property that is or would 30 be applicable for purposes of depreciation. 31 Sec. 43.75.036. Salmon utilization tax credit. (a) A taxpayer that is a
01 fisheries business may claim a salmon utilization tax credit of 50 percent of the 02 amount of the qualified expenditure in the state in the tax year for full utilization of 03 salmon. 04 (b) The amount of the tax credit applied against taxes under this section may 05 not 06 (1) exceed 50 percent of the taxpayer's tax liability incurred under this 07 chapter for salmon during the tax year; or 08 (2) be claimed for property first placed into service, or for expenditures 09 incurred, after December 31, 2005. 10 (c) If the tax credit is claimed for installation or operation of new equipment 11 on a vessel, the amount of the qualified expenditure under (a) of this section is 12 determined by multiplying the cost of the installation or operation of the equipment by 13 a fraction, the numerator of which is the weight of raw salmon processed on the vessel 14 by the taxpayer in the state in the tax year in which the equipment is first placed into 15 service, and the denominator of which is the weight of raw salmon processed on the 16 vessel by the taxpayer in and outside of the state in the tax year in which the 17 equipment is first placed into service. 18 (d) An unused credit under this section may be carried forward and applied 19 against the tax liability incurred on salmon in the following three tax years. 20 (e) Qualified expenditures for which a tax credit is claimed under this section 21 may not be considered for another tax credit in this title. A tax credit applied under 22 this section together with a tax credit applied under AS 43.75.035 may not exceed 50 23 percent of the taxpayer's tax liability incurred for the processing of salmon during the 24 tax year. 25 (f) A taxpayer may not claim the tax credit allowed under this section if the 26 taxpayer is in arrears in the payment of assessments under AS 16.51.120, contributions 27 under AS 23.20, or taxes or assessments collected or owed under this title. For 28 purposes of this subsection, a taxpayer is not in arrears if the liability for the 29 assessment, contribution, or tax is under administrative or judicial appeal. 30 (g) If, during a tax year, equipment for which a credit was claimed under this 31 section is disposed of by the taxpayer, ceases to be a qualified expenditure, or is
01 removed from service in the state, the tax due under this chapter is increased by the 02 recapture percentage of the aggregate decrease in the credit allowed under this section 03 for all prior tax years that would have resulted solely from reducing to zero the credit 04 allowed for the qualified expenditure under this section. The amount of tax credit 05 attributable to the qualified expenditure that is carried forward from prior tax years is 06 terminated as of the first day of the tax year in which the equipment is disposed of by 07 the taxpayer, ceases to be a qualified expenditure, or is removed from service in the 08 state. For purposes of this subsection, 09 (1) the recapture percentage during the year in which the equipment is 10 first placed into service or during the first year following the year in which the 11 equipment is first placed into service is 100 percent; 12 (2) the recapture percentage during the second year following the year 13 in which the equipment is first placed into service is 75 percent; 14 (3) the recapture percentage during the third year following the year in 15 which the equipment is first placed into service is 50 percent; 16 (4) the recapture percentage during the fourth or subsequent year 17 following the year in which the equipment is first placed into service is zero percent; 18 (5) equipment used on a vessel is considered to have been removed 19 from the state on the first day of a tax year in which the proportion of raw salmon 20 processed in the state on the vessel is less than 50 percent of total weight of raw 21 salmon processed on the vessel in and outside of the state. 22 (h) The amount of a tax credit recaptured under (g)(1) - (3) of this section may 23 not be included in the determination of the amount of that tax credit that is allowable 24 under this section or AS 43.75.035. 25 (i) In this section, 26 (1) "first placed into service" means the moment when equipment is 27 first used for its intended purpose; 28 (2) "new equipment" means tangible, depreciable personal property 29 with a useful life of three years or more whose original use commences with the 30 taxpayer and does not include property first used by another person; 31 (3) "qualified expenditure" means
01 (A) the direct and incremental cost of the development, 02 manufacture, or purchase of new equipment by a taxpayer to produce 03 marketable products in the state using salmon waste; 04 (B) reasonable custom processing or disposal fees paid to 05 another fisheries business in the state that does not claim a credit under this 06 section or AS 43.75.035 and that produces marketable products from salmon 07 waste, less the market value of the products produced for the taxpayer; or 08 (C) the direct and incremental cost of transporting salmon 09 waste to a facility in the state that produces a marketable product from salmon 10 waste; 11 (4) "tax liability" means the liability for all taxes under this chapter 12 before all credits allowed by this chapter; 13 (5) "useful life" means the useful life of equipment that is or would be 14 applicable for purposes of depreciation. 15 * Sec. 2. AS 43.75.130 is amended by adding a new subsection to read: 16 (g) For purposes of this section, tax revenue collected under AS 43.75.015 17 from a person entitled to a credit under AS 43.75.035 or 43.75.036 shall be calculated 18 as if the person's tax were collected without applying the credit; tax revenue collected 19 does not include the amount of a tax credit recaptured under AS 43.75.035(g) or 20 43.75.036(g). 21 * Sec. 3. AS 43.75.035, 43.75.036, and 43.75.130(g) are repealed. 22 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 23 read: 24 RETROACTIVITY. Sections 1 and 2 of this Act are retroactive to January 1, 2003. 25 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 RETROACTIVITY. If the attorney general provides notification under sec. 7(2) of 28 this Act, sec. 3 of this Act is retroactive to January 1, 2003. 29 * Sec. 6. Sections 1, 2, and 4 of this Act take effect immediately under AS 01.10.070(c). 30 * Sec. 7. Section 3 of this Act takes effect on the earlier of the following: 31 (1) January 1, 2009; or
01 (2) the date of the attorney general's notification to the lieutenant 02 governor and to the revisor of statutes that 03 (A) a court has entered final judgment that AS 43.75.035 or 04 43.75.036, added by sec. 1 of this Act, violates the commerce clause contained 05 in art. I, sec. 8, United States Constitution; and 06 (B) the time for an appeal of that judgment has expired, or, if 07 an appeal was taken, a final order on the appeal has been entered that 08 AS 43.75.035 or 43.75.036, added by sec. 1 of this Act, violates the commerce 09 clause contained in the United States Constitution. 10 * Sec. 8. Section 5 of this Act takes effect on the date of the attorney general's notification 11 under sec. 7(2) of this Act.