ALASKA
Return to Retiree Tax Map
NICKNAME
The Last Frontier
BOTTOM LINE: TAX-FRIENDLY
Alaska is a true tax haven for retirees. Alaskans pay no state income tax or statewide sales tax. In addition, the state sends all permanent residents (who have lived there for at least one year) an annual dividend check from the state's oil wealth savings account. The 2011 dividend paid to every eligible man, woman and child was $1,174, down a bit from $1,281 in 2010. While Alaska taxes real estate, homeowners 65 and older, or surviving spouses 60 and older, are exempt from municipal taxes on the first $150,000 of the assessed value of their property.
STATE SALES TAX
The state does not have a sales tax. However, 62 municipalities impose local sales taxes of up to 6%. Typical sales tax rates are from 2% to 5%, and the Tax Foundation says the statewide average is 1.79%.
INCOME-TAX RANGE
No state income tax.
SOCIAL SECURITY
Benefits are not taxed.
EXEMPTIONS FOR OTHER RETIREMENT INCOME
Retirement income is not taxed.
PROPERTY TAXES
Although taxing property is the primary method of raising revenues for most of the larger municipalities in the state, smaller municipalities favor a sales tax. This is primarily because the smaller incorporated areas lack a tax base large enough to support the property tax. Property is assessed at full value. Tax rates are determined locally, up to a maximum of 3% for cities.
Tax breaks for seniors: Homeowners 65 and older (or surviving spouses 60 and older) are exempt from municipal taxes on the first $150,000 of assessed value of their property.
INHERITANCE AND ESTATE TAXES
There is no inheritance tax and no estate tax.
Visit RetirementLiving.com for a complete rundown of taxes in Alaska.
Printer-friendly version
