Alaska has no state sales tax, but it does have a maximum local sales tax rate of 7.5% and a combined state and local sales tax rate of 1.76%.
What Does The Alaska Sales Tax For Businesses Mean?
The state of Alaska does not have a sales tax, although numerous municipalities do. As a result, if your company is liable for sales taxes in the state, you must contact the local municipal government for their specific sales tax legislation and forms. The Division of Community and Regional Affairs Research and Analysis Section has this local contact information.
A sales tax cannot be imposed unless the subject is put to a referendum and approved by a majority of voters. The maximum amount a municipality may levy for a sales tax was once capped, but that cap has now been lifted. Municipalities that collect a sales tax are also permitted by state law to levy a use tax, which is a tax levied on the storage, use, or consumption of goods within a municipality.
How Much Is The Alaska Sales Tax For Businesses?
Alaska currently has a 0% sales tax rate statewide. Individual towns have broad discretion over tax rates, and sales taxes can be as high as 7.5%.
The state sales tax rate in Alaska is reviewed on a monthly basis for proposed modifications and when any changes would take effect.
Because Alaska has multiple levels of local and special-purpose taxes, it is one of the most challenging states to oversee and administer. It also permits towns to develop their own taxing laws and collect their own local taxes apart from the state. Keeping this state accurate takes a lot of time and work.
|Alaska Sales Tax||Threshold Limit|
|0%||$100,000 economic sales threshold limit and 200 transactions threshold limit|
The Rules For Alaska Sales Tax For Ecommerce Business
Alaska’s Local Sales Tax No Longer Require Physical Presence
Free 30-Min Strategy Session
By the end of this Strategy Session, you will have a clear understanding of the next steps you can take for your business to take advantage of the tax deductions you are missing out on.
The problem for distant sellers is that, until recently, you needed to have a physical presence in the state to be responsible for sales tax collection. The Alaska Remote Seller Sales Tax Commission was founded in 2020, and its rules were revised.
According to the new guidelines, any firm that has either of the following must collect and pay sales tax for any of the cities that make up the Alaska Remote Seller Sales Tax Commission:
- In the preceding calendar year, you made over $100,000 in sales.
- In the preceding calendar year, I completed 200 transactions.
The fact that not all Alaska cities are members of the commission adds to the complexity of the problem. This means that you may be required to collect and submit sales tax to some local authorities, but not all. If you reach the above-mentioned economic nexus requirement in Alaska, you must collect and pay sales tax in all of the cities that have adopted the unified code.
If you’re an Alaska resident working or shopping in a state that has a sales tax and wants to learn about the procedures for exempting non-residents from the tax, contact the Department of Revenue of that state.
You can’t claim sales tax from another state on your Alaska income tax return.
Therefore, these are the most common tax cases for businesses under Alaska sales tax 2022. Additionally, some items are subject to tax exemption as well. Let’s see what are these items.
Alaska Sales Tax 200 Exemptions
Alaska does not exempt any transactions from paying sales tax. Essentials such as groceries, clothing, and pharmaceuticals are either tax-free or taxed at a lower rate in most states.
High-end clothing, unhealthy foods and beverages like soda, and non-essential pharmaceuticals may not be eligible for the lower sales tax rates. Other Alaska excise taxes, such as those on fuel, alcohol, and cigarettes, are in addition to the sales tax.
In certain states, alcohol and prepared food (including restaurant meals and some prefabricated supermarket products) are taxed at a higher rate. The sales tax in Alaska varies by jurisdiction and applies to the sale of autos, watercraft, and real estate.
The Wayfair Decision and Online Sales Tax
Effects on Alaskans Who Shop Online
The Wayfair decision has no bearing on Alaskans who buy products or services online because the state does not have a general sales tax.
Alaska people generally do not owe sales tax to another state, though there are certain exceptions.
Online purchases of airline tickets, for example, will be subject to federal taxes, while online purchases of hotels or rental cars may be subject to additional state and municipal taxes.
Currently, Alaska (AK) has a 0% statewide sales tax. Individual towns have broad discretion over tax rates, and sales taxes can be as high as 7.5%. Therefore, if you are operating an eCommerce business in Alaska, you need not pay the sales tax. Please contact us at Freecashflow.io if you need assistance with business sales tax in the USA.