Tool | August 2016

State-by-State Guide to Taxes

Compare state tax rates and rules -- on income, ordinary purchases, gas, "sin" products, property, and more -- across the U.S.

Alaska

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The Bottom Line
Map of Alaska

Most Tax-Friendly

In the Last Frontier, not only is there no state income tax, but the state actually pays legal residents an annual stipend (see more details below, under "Oddball Tax"), which, even though it's down from past peaks, more than outweighs the state's modest real estate and sales tax levies. It's one of Kiplinger's top ten most tax-friendly states.

Sales Tax

Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, which can go as high as 7.5%. But, according to the Tax Foundation, the statewide average is only 1.76%.

Income Tax Range

No state income tax.

Motor Fuel Taxes

Gasoline: $0.12 per gallon.
Diesel: $0.13 per gallon
(both are the country's lowest).

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.

The median property tax on Alaska's median home value of $254,500 is $2,987.

See Kiplinger.com’s Retiree Tax Map to learn how Alaska taxes Social Security income and other forms of retirement income.

Vehicle Taxes

Municipalities determine the sales tax for vehicles and can also choose to levy an annual registration tax. This registration tax is separate from the vehicle's registration fee and is based on vehicle class and model year. For example, a two-year-old car in Anchorage would have a motor vehicle registration tax of $150.

Sin Taxes

Cigarettes: $2 per pack by the state. Cities have the ability to levy additional taxes of up to $2.50
All other tobacco products: 75% of the wholesale price

Beer and hard cider: $1.07 per gallon
Wine: $2.50 per gallon
Liquor: $12.80 per gallon

Travel Taxes

Hotel: There is no statewide lodging tax, but localities can charge their own lodging taxes. Anchorage’s "bed tax" is 12%.

Rental cars: 10%

Taxes On Wireless Service

12.7%

Inheritance and Estate Taxes

There is no inheritance tax or estate tax.

Oddball Tax

Not a tax, but the opposite: The state gives each legal resident who’s lived in the state for a full year an annual "Permanent Fund Dividend" that stems from the state's taxation of energy production. The 2015 distribution was $2,072; 2016's payout is expected to be lower.

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