Significant means ‘noticeably’ or ‘measurably large’

VI. The statute is unclear as to how taxpayers must comply with Subparts (A) and (B) given the missing conjunction between the two clauses, rendering the statute void in violation of the Due Process Clause

"A statute is ambiguous if it can be reasonably interpreted in more than one way."105 A statute containing two alternatives that are connected by the disjunctive "or" generally means [*41] that the listed alternatives must be treated separately, whereas a statute that uses the conjunctive "and" means that both alternatives must be met.106 Applying these rules of statutory interpretation to Section 145(a)(5) means that if "or" is the missing conjunction between Subparts (A) and (B), the requirements of either clause, if met, would require a corporation to include an affiliated group in its Alaska return. However, if "and" is used, the requirements of both clauses must be met before the corporation is required to include an affiliated group in the return.

So, under Subpart (A), a corporation doing business in a foreign country with a tax rate of 90 percent or less than the U.S. tax rate that also directly or indirectly attributes to one or more members of a group of corporations filing an Alaska return 50 percent or more of its sales, purchases, or payments of income or expenses is required to include its affiliated group income on the group's Alaska return. Whereas, Subpart (B) requires inclusion of an affiliated corporation's income in its unitary Alaska return if it meets the 90 percent tax threshold test and it does not conduct significant economic activity.

"Economic activities" include [*42] making, providing, purchasing, or selling goods or services, such as producing, distributing and consuming products or services, and any activities involving money or the exchange of products or services.107 "Significant" is defined as "of a noticeably or measurably large amount."108 Accordingly, the statute means that a corporation that conducts significant economic activity is one that has a noticeably or measurably large amount of activities relating to making, providing, purchasing, or selling goods or services, or any activities involving money or the exchange of products or services. Conversely, a corporation that does not conduct significant economic activity would not have a noticeably or measurably large amount of these types of activities.

The plain meaning of "significant" could be argued to render Subparts (A) and (B) as disjunctive, because it seems unlikely that a corporation would ever comply with both subparts simultaneously. That is, making 50 percent or more of sales, purchases or payments in a location where an entity does not conduct significant sales, purchases or payments seems improbable, unless the combined group [*43] does little or no business at all. And, as discussed above, Subparts (A) and (B) of Section 145(a)(5) are nearly identical to Footnote 2 of the Working Group's Common Elements of Water's Edge Options Two — Six.109 In that part of the Working Group report, the two statements are connected by a disjunctive "or."110 So, an "or" makes the most sense. But it is not the only logical reading, as discussed below.