SALES TAX 101 for ALASKA

By December 3, 2018 Alaska

The Sales Tax Basics Every Alaska Business Should Know

What is Sales Tax in Alaska?

While there is no state sales tax in Alaska, municipalities have the authority to set their own rates, which can be as high as 7.5%.

Are All Goods and Services Taxable?

No

How Do I Know What’s Taxable and What’s Not?

There are very few non-taxable items (exemptions) required by state law. For information on what is not taxable, contact the municipality directly. Click here

Who Pays Sales Tax?

Consumers pay sales tax.  Merchants do not pay sales tax out of their own pockets.  It’s commonly referred to as a pass through tax.

What Am I Responsible For?

If you are in a municipality that charges sales tax, you are required to collect sales tax, hold it secure and delivered on-time and in-full. Due dates and filing procedures can be determined by contacting your local government.

How Do I Know How Much Sales Tax to Charge? 

Though there is no sales tax in most of the state, the local sales tax rate in Alaska varies based on the municipality. Find more information here.  The final and definitive answer is always the sales tax rate posted on the State Department of Revenue website.  Rates posted on the web are often not up-to-date and incorrect. It’s always the merchant’s responsibility to charge the correct sales tax rate.

Who Gets the Sales Tax Money?

In Alaska all sales tax is paid directly to the city or municipality.

How Do I Manage Tax Exempt Sales?

The State of Alaska does not have a tax exemption certificate, as it is not necessary to have one.

What if I Forget to Pay or Spend the Money and Can’t Pay?

Cities and municipalities in Alaska have severe penalties for missing tax payments. If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt.  In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.

Alaska Department of Revenue

TAX RATE: There is no state sales tax in Alaska. However, municipalities have the authority to set their own rates, and sales tax can be as high as 7.5%.

Alaska Sales and Use TAX HELP: (907) 465-2300

This resource page is for informational purposes only.  If you have further questions regarding sales tax please contact DAVO support at 888-659-8432 or consult your tax adviser.

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