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Facilities. During the taxable years at issue, the State of
Alaska and the Galena Air Station, a U.S. Air Force installation,
owned and administered the land on which the Galena airport is
located.5 On this land, substantially all of petitioner’s
services are performed by Alaska Native employees. The Galena
airport’s land is bordered on the south by the Galena Village
Townsite.6 Gana-A’ Yoo, pursuant to ANCSA, owns the lands that
border the Galena airport on the north, east, and west.
On its amended corporate tax returns for TY 1996, TY 1997,
and TY 1998, petitioner claimed the IEC. In the notice of
deficiency, respondent disallowed the IEC because petitioner had
not demonstrated that it met the requirements to claim the credit
and allowed an additional deduction for wages or salary expense
because of the disallowed credit.7
Discussion
Section 38 allows a taxpayer to claim against his tax a
general business credit, which includes the amount of the current
year business credit. Sec. 38(a)(2). The amount of the current
5 The U.S. Air Force transferred this land to the State of
Alaska in 1966, subject to certain reservations respecting
continuing use as a military base.
6 A small portion of the southern border adjoins the Yukon
River and a Federal air navigation site.
7 In its petition, petitioner also claimed an overpayment
of $6,078 for TY 1997.
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