Rocky Mengle
Navigating the complexities of state taxes can be daunting, but understanding Alaska's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Last Frontier State's tax system, from income and sales taxes to property taxes and retirement benefits.
Alaska state tax: Overview
Alaska is one of the nine states with no income tax. In fact, Alaska actually pays legal residents who have lived there for at least one year an annual stipend, called the Permanent Fund Dividend.
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Alaska doesn't have a statewide sales tax, but localities can impose their own taxes of up to 9.5%, according to the Sales Tax Handbook.
However, the average sales tax comes in at below 2%, making it one of the states with the lowest sales tax.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Alaska income tax
Alaska has no state income tax.
Alaska sales tax
Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, and you might pay local sales tax on some essentials such as groceries.
Higher rates are found in locations that lack a property tax, but not having to pay property tax might make those higher sales tax rates less painful.
How much are property taxes in Alaska?
In Alaska, the average effective property tax rate is 1.07%, which is slightly high but still lower than in many other states.
Source: Tax Foundation
Alaska retirement taxes
Alaska Property Tax Breaks for Retirees
Alaska Senior Citizen Exemption: 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.
Note: Other residents may qualify to have up to 40% ($75,000 maximum) of their property's assessed value exempt from property taxes.
Alaska gas tax
Gasoline: $0.08 per gallon.
Diesel: $0.08 per gallon.
Source: Sales Tax Handbook
Alaska alcohol and tobacco taxes
Alaska tobacco taxes
Product | Tax Amount |
|---|---|
Cigarettes | $2.00 per pack |
Other Tobacco Products | 75% of wholesale price |
Source: Sales Tax Handbook
Alaska alcohol taxes
Product | Tax Amount |
|---|---|
Wine | $2.50 per gallon |
Beer | $1.07 per gallon |
Liquor | $12.80 per gallon |
Source: Sales Tax Handbook
Alaska estate and inheritance taxes
Alaska is one of the U.S. states with no estate or inheritance taxes.
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