Alaska has no statewide sales tax

Alaska does not charge a statewide sales tax on purchases. This means when you buy something at a store in Anchorage, Juneau, or anywhere else in the state, there is no sales tax added to your bill at checkout. The price you see is the price you pay.

However, this does not mean Alaska residents pay zero sales tax everywhere. Some cities and boroughs within Alaska do charge local sales taxes, and those rates vary by location. A few communities have no local tax at all, while others charge up to around 7.5 percent, depending on where you shop.

Alaska also does not charge income tax on wages, which is unusual among U.S. states. This combination of no state sales tax and no income tax makes Alaska's tax structure distinct from most other states.

Key Takeaways

  • Alaska has no statewide sales tax, so purchases are not taxed at the state level.
  • Some cities and boroughs in Alaska do charge local sales taxes that range from around 1 percent to 7.5 percent depending on location.
  • You need to know your specific city or borough to find out what local tax rate applies to your purchases.
  • Alaska also has no state income tax, making it one of the few states with neither a statewide sales tax nor an income tax.

Which Alaska cities charge local sales tax

Local sales taxes in Alaska are set by individual cities and boroughs, not by the state. Anchorage, the largest city, charges a local sales tax. Juneau, the capital, also has a local tax. Fairbanks charges a local tax as well. The rates in these major cities typically fall between 5 and 6 percent, though the exact rate can vary by year and by what type of item you are buying.

Smaller communities have different approaches. Some towns charge no local sales tax at all, while others charge rates lower than the major cities. A few places charge higher rates. Because the tax is set locally, the rate you pay depends entirely on which city or borough you are in when you make your purchase.

If you live in or visit a specific Alaska community, you can contact that city or borough's tax office to find the current rate. Many municipalities post their rates online, though the websites vary in how straightforward they are to navigate.

What items are taxed in Alaska

In places where Alaska does charge local sales tax, most tangible goods are taxed — that is, physical items you can touch and take home. Groceries, clothing, electronics, and household goods are typically subject to tax where a local tax exists.

Services are often treated differently. Haircuts, repairs, and professional services may or may not be taxed depending on the city or borough. Some communities tax services; others do not. This is another reason to check your specific location's rules.

Food and prepared meals can be taxed differently than groceries. In some Alaska communities, groceries bought at a store are not taxed, but restaurant meals are. In others, both are taxed. The rules are not uniform across the state.

How local sales tax works when you shop online

When you order something online from a retailer outside Alaska, whether that retailer collects Alaska sales tax depends on the seller and where they are located. Large national retailers typically collect local Alaska sales tax if they have a physical presence in the state or if Alaska law requires them to. Smaller sellers may not.

If a seller does not collect local Alaska sales tax at checkout, you are generally not required to track down and pay it yourself on individual purchases. However, some states and communities have rules about reporting uncollected taxes on annual returns, though enforcement of these rules varies widely.

The safest approach is to assume that if a retailer does not show a tax charge at checkout, no tax is being collected. If you want to verify whether a specific seller should be collecting tax in your area, you can contact your city or borough's tax office with the retailer's name.

Comparing Alaska's tax situation to other states

Alaska is one of only five states with no statewide sales tax. The others are Delaware, Montana, New Hampshire, and Oregon. However, most of these states have other ways of collecting revenue — through income tax, property tax, or other fees. Alaska is unusual because it has neither a statewide sales tax nor a state income tax.

This does not mean Alaska residents pay no taxes overall. Local sales taxes exist in many communities, and property taxes are charged in most areas. Alaska also funds its government partly through oil revenues, which is why the state can operate without income or statewide sales tax.

If you are moving to Alaska from a state with sales tax, you will notice the difference at checkout in communities with no local tax. If you are moving to a community with local tax, the rate may be higher or lower than what you paid before, depending on where you came from.

What to do if you are unsure about the tax rate in your area

The easiest way to find your local sales tax rate is to contact your city or borough's tax assessor's office or finance department directly. They can tell you the current rate and what types of items are taxed in your area. Many municipalities have this information on their websites under "taxes" or "finance."

You can also ask a cashier at a local store what tax rate applies to your purchase. Since the tax is added at checkout, the receipt will show the rate that was charged. If you buy something and see a tax charge, that tells you your location has a local tax and what the rate is.

If you are shopping online and unsure whether tax should be charged, you can check the retailer's tax policy or contact them directly. Most large retailers have customer service teams that can explain their tax collection practices for your specific state and location.

Frequently Asked Questions

Do I pay sales tax on groceries in Alaska?

It depends on your city or borough. In some Alaska communities, groceries are exempt from local sales tax. In others, they are taxed like any other item. Check with your local tax office or look at a recent grocery receipt to see if tax was charged.

Is there sales tax on gas in Alaska?

Gasoline is subject to local sales tax in communities that charge one. The tax is included in the price per gallon shown at the pump. The rate varies by location, just like other purchases.

What if I buy something in one Alaska city and use it in another?

You pay the sales tax rate of the city where you make the purchase, not where you use the item. If you buy something in Anchorage and take it to Fairbanks, you pay Anchorage's tax rate at checkout.

Do Alaska residents pay federal sales tax?

There is no federal sales tax in the United States. Sales tax is only charged at the state and local level. Alaska's lack of a statewide sales tax means you only pay local tax where it exists.

Can I get a sales tax refund if I am visiting Alaska?

Alaska does not have a sales tax refund program for visitors. Some states offer refunds to tourists, but Alaska does not. You pay the local tax rate that applies in the community where you shop.