Alaska is one of five US states without a statewide sales tax, despite this, the state of Alaska has municipalities that collect sales tax. Alaska state laws allow cities and counties to make their own sales tax ordinances and determine what is taxable. In turn, there are very few non-taxable items under Alaska state law.
Standard rate
Local municipalities may impose a sales tax, typically ranging from 1% to 7%, depending on the location.
Sales of tax-free products and services
Local jurisdictions can define what products or services are exempt from local sales taxes. Some common tax-free products across the state include:
- Food items for home consumption,
- Health-related services and medical products,
- Certain sales made by nonprofits may be exempt.
Who is obliged to register for Sales Tax in Alaska?
If a business operates in a municipality that imposes a sales tax, it must register locally. Businesses selling tangible goods or providing taxable services within local taxing areas need to obtain a sales tax permit from the local authority.
Threshold
Starting April 1, 2020, thresholds for goods and digital services were introduced in Alaska. For both categories, remote sellers must register and collect sales tax if they exceed $100,000 in sales or conduct 200 or more transactions within the state during the current or previous year.
Sales Tax payment and filing date
Typically, businesses file tax returns monthly or quarterly, depending on their sales volume. Tax payments and returns are usually due by the 15th or the last day of the following month. Local authorities provide clear deadlines in their tax registration materials.
Penalty and Interest
Failure to file a return or make payment on time usually results in penalties and interest charges. These vary by locality but typically include:
- Late filing penalty: A flat fee or percentage of the unpaid tax (e.g., 5% per month).
- Interest: Generally, accrues at a rate of 1% per month on the outstanding balance.
Sales Tax Holiday
Alaska does not offer statewide sales tax holidays. Some local jurisdictions may declare specific sales tax holidays for particular items (e.g., back-to-school supplies), but this is uncommon.
Alaska Sales Tax nexus
For sales tax purposes, Alaska sets an economic Nexus threshold at $100,000 in gross sales or 200 transactions in the state during the current or previous calendar year.