Sales into the state of Alaska have always been exempt from state level sales tax; however, many of the local jurisdictions in Alaska have enforced sales tax collection at the local level provided a business has a physical presence. Now, with Wayfair, even remote sellers need to worry about collecting the local sales tax in Alaska.
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. Sixteen jurisdictions are currently active members in the Commission with dozens more expected to join by the end of 2020.
The Commission was formed to equalize sales between physical and remote sellers. It is comprised of local government members with current sales tax in place.
Registration in the sixteen jurisdictions is based on whether the taxpayer has met one of the “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.”
The Commission requires the remote seller to register when statewide sales within the last calendar year meets or exceeds the Threshold Criteria. When remote sellers meet the Threshold Criteria, they must register within 30 days of the effective date of the Code or within 30 days of meeting the Threshold Criteria whichever occurs second.
Criteria is even more unique within Alaska as the threshold is based on sales rendered within the state of Alaska, not just within the specified jurisdictions. There are over 100 taxing jurisdictions in Alaska. Those jurisdictions that are not part of the Commission will rely on their current Rules and Regulations regarding remote seller registration and collection of tax.
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. The Commission expects about 40 jurisdictions to be participating by summer.
A sample of rates off the map of Alaska cities includes 5% in Nome and Juneau and 2.5% in Wasila. In the months to come, dozens more local governments are expected to adopt the Code.
Sales tax isn’t getting any easier. These Alaska jurisdictions join 43 other states and D.C. in enacting economic nexus and the rules keep evolving. Let TaxConnex manage the burden of keeping up with all the changes and challenges that come with staying compliant in this post Wayfair world. Contact us to learn what it means when sales tax compliance is all on us.