Alaska Incentives and Workforce Development Guide

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FINANCING (Some programs require Alaska Residency)

Agricultural Revolving Loan Fund: Loans for short-term operating expenses, chattel, farm development, irrigation, product processing, and clearing.

Alaska Industrial Development and Export Authority (AIDEA) Loan Participation Program: This program provides permanent financing, both taxable and tax-exempt, to borrowers through a qualified originator for the purpose of developing, acquiring or enhancing Alaska business enterprises.

Alaska Capstone Avionics: Loans made to purchase and install eligible Capstone avionics equipment in aircraft that are principally operated in Alaska.

Alaska Microloan Revolving Fund: Loans may be made for working capital, equipment, construction or other commercial purposes for a business located in Alaska.

Alternative Energy Conservation: Loans may be made for purchase, construction, and installation of alternative energy systems or energy conservation improvement in commercial buildings.

Commercial Charter Fisheries: Provide affordable loans to Alaskan commercial charter operators to promote Alaskan ownership of charter halibut permits.

Commercial Fishing: Long-term, low interest loans to promote the development of predominantly resident fisheries, and continued maintenance of commercial fishing vessels and gear for the purpose of improving the quality of Alaska seafood products.

Fisheries Enhancement: Loans for planning, permitting, construction, and operation of fish hatchery facilities.

Mariculture: Loans may be made for the planning, construction, and operation of a mariculture business.

Rural Development Initiative Fund: Loans may be made to a business located in a community with a population of 5,000 or less that is not connected by road or rail to Anchorage or Fairbanks, or with a population of 2,000 or less that is connected by road or rail to Anchorage or Fairbanks. Loans may be made for working capital, equipment, construction or other commercial purposes.

Rural Small Business Development Loans: Loans for small business as defined by the Small Business Administration in all communities in the state of Alaska with a population of less than 30,000. Loans in communities of 30,000 or more are available on a limited basis, depending on funds availability.



Corporate Income Tax Credits

Credit for the In-State Manufacture of Urea, Ammonia, or Gas-to-Liquid Products: Effective July 1, 2017, a taxpayer may claim a credit equal to the percentage of royalty paid under AS 38.05.135 on certain deliveries of gas, the percentage equal to the percentage of the ownership interest held by the taxpayer in the in-state processing facility. The credit is not refundable and may not be carried forward to the other tax years.

Education: (AS 43.20.014, 43.55.019, 43.56.018, 43.65.018, 43.75.018, 43.77.045) Taxpayers are allowed a non-transferrable, non-refundable credit for cash contributions to Alaska universities and accredited nonprofit Alaska two- or four-year colleges for facilities, direct instruction, research and educational support purposes.

Gas Exploration and Development: A taxpayer may take a corporate income tax credit for 25% of qualifying expenditures incurred in exploration and development of natural gas reserves in Alaska, except for the North Slope. The credit may be applied against 75% of the tax liability.

LNG Storage Facility Tax Credit: A person may claim a credit for costs incurred to establish a LNG (Liquefied Natural Gas) storage facility in Alaska. The available credit is equal to 50% of the costs incurred, not to exceed $15 million. This is a refundable tax credit, subject to AS 43.55.028.

Minerals Exploration Incentive: A taxpayer may claim a credit for eligible costs of exploration activities related to determining existence, location, extent, or quality of a locatable mineral or coal deposit. An approved exploration incentive credit may not exceed $20 million and must be applied within 15 tax years after the credit is approved. Application of the credit is limited to the lesser of 50% of the taxpayer’s mining license tax liability or 50% of its corporate tax liability.

Qualified In-State Oil Refinery Infrastructure Expenditures Tax Credit: A taxpayer that owns an in-state refinery may claim a credit, calculated as 40% of qualified expenditures. The credit may not exceed $10 million for each refinery. The credit is refundable, subject to AS 43.55.028.

Qualified Oil and Gas Service Industry Expenditure Credit: A taxpayer may claim a credit for qualified oil and gas service industry expenditures incurred in the state. The credit is calculated at 10% of qualified expenditures, the credit not to exceed $10 million. An unused credit may be carried forward for five years.

Veteran Employment Tax Credit: A taxpayer may take a credit for the employment of a veteran. The available credit is $3,000 for hiring a disabled veteran or $2,000 for a veteran who is not disabled.

Oil & Gas Production and Property Tax Credits

Alternative Credit for Exploration: AS 43.55.025 – Taxpayers that incur qualified exploration expenditures are eligible for this credit, which is 30% (20% for work performed prior to July 1, 2008) or 40%, depending on the qualifications of the exploration project.

Carried-Forward Annual Loss: AS 43.55.023(b) – Taxpayers that incur lease expenditures that are not deductible in calculating production tax values generate a “loss carry-forward” and they may apply for a tax credit. The credit rate is 25% for non-North Slope losses and North Slope losses prior to Jan. 1, 2014. The carried-forward annual loss for North Slope is 45% in 2014-2015 and 35% for 2016 forward. These credits are transferable.

Cook Inlet Jack-Up Rig Credit: AS 43.55.025(a) (5) was passed by the Alaska Legislature in 2010 to incentivize investment in a jack-up rig for use in Cook Inlet. The credit is available to the first three unaffiliated persons that drill an offshore exploration well for oil or gas in Cook Inlet.

Exploration Incentive (Assignable): AS 41.09.010 – This is a distinct incentive program administered by the Alaska Department of Natural Resources. The credit is available to be claimed against royalty obligations, corporate income tax and production tax. Taxpayers may take a credit up to 50% on state land (or 25% on non-state lands) of eligible oil and gas exploration expenditures. An approved incentive credit under this statute may not exceed $5 million per project and is limited to $30 million per taxpayer.

Exploration Incentive: AS 38.05.180(i) – Lessees of state land drilling an exploratory well or conducting certain seismic exploration on that land are eligible for this credit. The credit is 50% of the cost of the exploration expenditures and may not exceed 50% of the production tax or state royalty against which it is applied. This credit is administered by the Alaska Department of Natural Resources, but may be applied to oil and gas production tax.

Frontier Basin Credits: AS 43.55.025(a)(6) and (a)(7) was effective Jan. 1, 2013 to provide tax credits for exploration wells and seismic projects performed after June 30, 2012, and before July 1, 2016, in certain “Frontier Basins” described in AS 43.55.025(p).

New Area Development: AS 43.55.024(a) – Taxpayers that produce in areas outside the Cook Inlet and south of 68 degrees north latitude are eligible for a tax credit of not more than $6 million per year. This credit sunsets the later of 2016 or the ninth calendar year after first year of production. The credit is not certificated and is not transferable.

Per Barrel Credits: AS 43.55.024(i) and (j) – Under AS 43.55.024(i), a $5 per barrel credit is allowed for each barrel of taxable oil produced on the North Slope that qualifies for the Gross Value Reduction (GVR) under AS 43.55.160(f) and (g). Under AS 43.55.024(j), a sliding scale credit of $1 to $8 per barrel is based on the gross value of oil, when prices are below $150 per barrel, that does not qualify for the Gross Value Reduction (GVR) under AS 43.55.160(f) and (g). These credits may be applied against a tax levied by AS 43.55.011(e). The credits are NOT transferable and are NOT available to be issued as a certificate. An unused tax credit or portion of a tax credit under this section may not be carried forward for use in a later calendar year. The credit may not be used to reduce a tax liability for any calendar year below zero.

Qualified Capital Expenditure: AS 43.55.023(a) – Taxpayers that incur qualified capital expenditures for non-North Slope activity may apply for a 20% credit. This credit, when certificated, is transferable. Taxpayers may also apply the 20% credit to their annual oil and gas production tax filings without certification.

Small Producer: AS 43.55.024(c) – Taxpayers with Alaska oil and gas production less than 100,000 BTU equivalent barrels a day are eligible for a Small Producer Credit. When average oil and gas production is no more than 50,000 barrels per day, the credit is $12 million per year. When production exceeds 50,000 barrels per day, but is less than 100,000 barrels per day, the credit is allocated based on production volumes. This credit sunsets the later of 2016 or the ninth calendar year after the first year of production. The credit is not certificated and is not transferable.

Transitional Investment Expenditure: AS 43.55.023(i) – The TIE Credit is generated by qualified capital expenditures made during the period April 1, 2001, through March 31, 2006. The credit is 20% of those qualified capital expenditures, not to exceed one-tenth of qualified capital expenditures incurred after March 31, 2006, and before Jan. 1, 2008. Producers and explorers without commercial production in Alaska before Jan. 1, 2008, are eligible for this credit. The TIE Credit is not transferable and is available until 2013.

Municipal Property Taxes Paid: Taxpayers receive a credit against state oil and gas property tax for property taxes paid to municipalities on taxable property. The credit is limited to the amount of state tax otherwise due.



Alaska Career Ready: This program is a joint effort between the Departments of Labor and Workforce Development and Education and Early Development that allows students and adult job-seekers to evaluate their readiness for work, college and occupational training and to improve the basic skills valued by employers and educators.

Alaska Construction Academies: Through partnership efforts, Alaskan high school students and adults are trained and placed into high demand, construction and trade apprenticeship programs, as defined by the Alaska Workforce Investment Board.

Alaska Technical Vocational Education Program (TVEP): Recipients of TVEP non-competitive grant funds are part of a statewide vocational training system, working together with industry and state agencies to provide a comprehensive and unified response to Alaska’s training needs. TVEP funds must be used for technical and vocational training programs that align with workforce regional demands and the Alaska Workforce Investment Board’s industry priorities.

State Training and Employment Program (STEP): The State Training and Employment Program is administered by the Alaska Department of Labor and Workforce Development, Division of Employment and Training Services and funded by a set-aside from the Unemployment Insurance Trust Fund. The purpose of STEP is to enhance the quality and make Alaska job training and employment assistance easily available to employers, employees, and future workers.

Workforce Innovation and Opportunity Act (WIOA) Programs: The state administers WIOA programs for adults, dislocated workers, and youths.