Alaska Sales Tax Rates

Total Range for 2024

0% – 7.5%

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Why do you need to collect sales tax in Alaska?

If you’re selling goods and services in Alaska then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.

Two types of nexus exist:

  • Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Alaska, triggers this type. If you do, you likely need to collect sales tax.
  • Economic Nexus: This kicks in when your sales within Alaska exceed a certain economic threshold. Even without a physical presence, surpassing this threshold ($100,000) requires collecting sales tax.

In Alaska, there is also a transaction threshold of 200, which means that even if your sales aren’t over $100,000 if you’ve sold more than 200 items then you still need to pay sales tax.

Is what you’re selling taxable in Alaska?

Now that you understand your Alaska sales tax obligations, the next step is to determine if the specific products or services you offer are subject to Alaska sales tax.

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How to register for sales tax in Alaska

Unlike most states, Alaska itself doesn’t have a statewide sales tax. Therefore, there’s no need to register for a sales tax permit with the state government.

However, some local jurisdictions within Alaska, specifically boroughs and municipalities,  may impose their own local sales taxes.

Here’s how to navigate sales tax registration if you operate in a locality with a local sales tax:

  1. Identify Applicable Local Sales Tax: The first step is to determine if the location(s) where you’ll be conducting business have a local sales tax. You can usually find this information on the website of the borough or municipality you’ll be operating in.
  2. Local Registration Requirements: If a local sales tax applies, each jurisdiction might have its own registration process and requirements. They might have a dedicated website or department handling sales tax registration for businesses.

How to collect sales tax in Alaska

If you’re operating in a location with a local sales tax, here’s what you need to consider for sales tax collection:

  1. Identify Applicable Local Tax Rate
    • The first step is to pinpoint the specific local sales tax rate that applies to your business location. This information can typically be found on the website of the borough or municipality.
  2. Charge the Local Sales Tax Rate
    • If a local sales tax applies, you’ll need to factor that rate into your pricing and collect it from customers at the point of sale.
  3. Remit Collected Tax
    • Each local jurisdiction might have its own process for remitting collected sales tax. This could involve filing returns and submitting payments electronically or by mail.

Example:

Let’s say you run a small bakery in Juneau, Alaska (which has a local sales tax) and a customer purchases the following items:

  • Croissants (2) at $2.50 each: $2.50 x 2 = $5.00
  • Coffee (1): $3.00

Subtotal: $5.00 (croissants) + $3.00 (coffee) = $8.00

Local Sales Tax Rate (Juneau Example): 1% (This will vary depending on the specific borough or municipality)

Sales Tax Calculation:

  1. Multiply the subtotal by the local sales tax rate: $8.00 (subtotal) x 1% (sales tax rate) = $0.08 (sales tax amount)

Total: $8.00 (subtotal) + $0.08 (sales tax) = $8.08

FAQs

Do you have a physical nexus in Alaska?

Here are some factors that might establish a physical nexus in an Alaskan borough or municipality with a local sales tax:

  • Having a physical location: This includes a brick-and-mortar store, warehouse, or office in the jurisdiction.
  • Having employees or representatives: If you have employees or sales representatives who regularly solicit sales or perform services within the jurisdiction, it could establish a physical nexus.
  • Storing inventory: Storing inventory within the jurisdiction, even if through a fulfillment service, might be considered a physical presence.
Do you have an economic nexus in Alaska?

Economic nexus applies if your sales exceed a certain threshold within the state, regardless of physical presence.  Alaska requires sellers who make more than $100,000 in sales annually in the state to register and collect sales tax.

Take note that if you sell over 200 items, even without exceeding the $100,000 you are still subject to sales tax.

What is use tax in Alaska?

Use tax is a tax levied on goods purchased outside Alaska for use, storage, or consumption within the state. The use tax rate will depend on the specific local jurisdiction where the item will be used.

Do you need a seller/reseller permit?

In Alaska, there’s no requirement for a statewide seller/reseller permit since the state itself doesn’t have a sales tax. However, its relevance depends on the context of your business operations and whether or not your local area has sales tax.

How to get a sales tax permit/license in Alaska?

In Alaska, there’s no need to obtain a sales tax permit/license because the state itself doesn’t have a statewide sales tax.

However, some Alaskan boroughs and municipalities may impose their own local sales taxes.  If you’re operating in a location with a local sales tax, then you’ll need to register for that specific local sales tax and potentially obtain a permit, but it won’t be called a “sales tax permit”.

When are Alaska’s Returns Due?

Alaska income tax returns are due on the 15th day of April of the following year for most filers. There are a few exceptions and extensions to consider:

  • C Corporations and Partnerships: These entities have an extension deadline of November 15th to file their returns. Alaska offers automatic 6-month extensions, so you don’t need to file a separate extension request in most cases.
  • Federal Extension: If you file for a federal tax extension, your Alaska return will also be automatically extended to October 15th.

Please note that there are no sales tax return deadlines in Alaska at the state level because Alaska itself doesn’t have a statewide sales tax. However, some Alaskan boroughs and municipalities may impose their own local sales tax return due dates.

Filing sales tax in Alaska

Filing sales tax in Alaska depends on whether you’re dealing with the state or a specific borough/municipality with a local sales tax.

  1. Statewide Sales Tax (Doesn’t Exist):
    • There’s no statewide sales tax in Alaska, so you wouldn’t file any sales tax returns with the state itself.
  2. Local Sales Tax:
    • Some Alaskan boroughs and municipalities may have their own local sales taxes.
    • If you’re operating in a location with a local sales tax, then you’ll need to register for that specific local sales tax and potentially file returns.
Is anyone exempt from sales tax in Alaska?

Since Alaska doesn’t have a statewide sales tax, there are technically no exemptions at the state level. However, local jurisdictions might have specific exemptions for certain goods or services. Luckily, most Alaskan boroughs and municipalities have their own websites. These websites typically have sections dedicated to taxes or finance where you might find information on local sales tax exemptions.

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