Alaska Sales & Use Tax Nexus

Economic Nexus

Alaska still has no state-wide sales tax, but Alaska's local jurisdictions, also known as boroughs, have formed the Alaska Remote Seller Sales Tax Commission (the "Commission" to provide a streamlined, single-level administration of sales tax collection and remittance.

The Commission was formed to equalize sales between physical and remote sellers. It is composed of local government members with current sales tax in place. Registration in these jurisdictions is based on whether the taxpayer has met one of the following "Threshold Criteria":

The remote seller's statewide gross sales, including the seller's marketplace facilitator's statewide gross sales, from the sale(s) of property, products or services delivered into the state meets or exceeds one hundred thousand dollars ($100,000); or
The remote seller, including the seller's marketplace facilitator, sold property, products, or services delivered into the state in two hundred (200) or more separate transactions.

To learn more, read our article on how Economic Nexus Affects Your Business.

Physical Nexus

Your business has physical nexus if it has any of the following items within the state of Alaska:

Owning or leasing just one office or having a mailing address
Having an employee or independent contractor
Store inventory or maintaining a warehouse (including goods sold through big online businesses such as Amazon)
Having an affiliate; or doing business only temporarily, such as by attending a trade show or having multiple in-person sales meetings or presentations

Taxability

Typically, services are not taxable, however, services such as repairing or producing a product will create sales tax liability. Physical products are taxable in-state with a few exceptions. Taxability can change state to state and often depends on how your product/services are defined.

The Alaska Remote Seller Sales Tax Commission has information for businesses selling into the state, including an interactive map of participating localities and registration material.

Determine whether software and SaaS are subject to taxation here.

Like much of sales tax, this can often be difficult to manage alone. Reach out if you need help understanding the taxability of your products/services.

Collecting Sales Tax

Alaska requires sellers in-state to charge the rate at which the seller is located. This may include county, city, and district tax rates. So if you operate your business from Alaska, you collect origin-based sales tax at your local tax rate.

Sellers based outside of Alaska selling into the state are required to charge sales tax based on the buyer's location.

Alaska's state sales tax rate is 0%. Different municipalities have the authority to establish their own tax rates, with sales taxes potentially reaching up to 7.5%.

When Are Sales Taxes Due?

Sales tax returns are dependent upon the state's due dates and the vendor's filing frequency. If the seller exceeds the economic threshold, they are liable to file on a monthly basis. If the seller does not exceed the threshold, then returns could be due quarterly or annually.

Sales tax returns are typically due on the last day of the month following the reporting period; however, the specific filing date can vary depending on when you register, as you should receive a filing date upon registration. If the due date falls on the weekend or holiday, the due date is extended until the end of the next business day.