Sec. 44.33.236. - Determination of qualified expenditures.
(a) Expenditures made by a production company in connection with a film production approved by the film office that shall be considered qualified expenditures must be directly related to the production and be incurred in the state. Only expenditures that are ordinary, reasonable, and not in excess of fair market value and that are for real or tangible property, fees, services, or state or municipal taxes shall be considered. Expenditures may include
(1) costs of set construction and operation;
(2) costs of wardrobes, make-up, accessories, and related services;
(3) costs associated with photography and sound synchronization;
(4) costs of lighting and related services and materials;
(5) costs of editing and related services;
(6) rental of facilities and equipment;
(7) leasing of vehicles;
(8) costs of food and lodging;
(9) costs of digital or tape editing, film processing, transfer of film to tape or digital format, sound mixing, and special and visual effects;
(10) the total aggregate payroll for services performed in Alaska, including all salaries, wages, compensation, and related benefits provided to producers, directors, writers, actors, and other personnel that are directly attributable to services performed in Alaska;
(11) the costs of the use of an Alaska business for processing qualified payroll and related expenditures;
(12) costs of music, if performed, composed, or recorded by an Alaska musician, or released or published by an Alaska business;
(13) costs of intrastate travel, if provided by an Alaska business;
(14) costs relating to the design, construction, improvement, or repair of a film, video, television, or digital production or postproduction facility or related property, infrastructure, or equipment, except commercial exhibition facilities, as determined by the film office;
(15) costs of state or municipal taxes levied in Alaska on the lease or rental of passenger or recreational vehicles or the rental of rooms or other lodging; or
(16) other similar production expenditures as determined by the film office in cooperation with the Department of Revenue.
(b) Production costs that may not be considered qualified expenditures include
(1) costs related to the acquisition, determination, transfer, or use of a film production tax credit under AS 43.98.030 ;
(2) postproduction expenditures for marketing and distribution;
(3) production financing, depreciation, and amortization costs, and other costs that are not cash or cash equivalent expenditures directly attributable to production costs incurred in the state;
(4) amounts that are later reimbursed or reasonably anticipated to be reimbursed, resulting in a reduction in production costs;
(5) amounts that are reasonably anticipated to be recovered through subsequent sale or other realization of value by disposal of an asset that has been claimed as a qualified expenditure;
(6) amounts that are paid to a person or entity as a result of participation in profits from the exploitation of the production;
(7) costs incurred in the purchase of real or tangible property for which a qualified expenditure has, at any time, been claimed.