Alaska State Tax Guide

Alaska state tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact Alaska residents.

picture of Alaska flag
(Image credit: Getty Images)

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. 

Alaska doesn't have a statewide sales tax, but localities can impose their own taxes of up to 7.5%, according to the Tax Foundation. 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.]

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Alaska State Tax: Income Taxes

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 1.22%, which is slightly high but still lower than in many other states.

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 Motor Vehicle Taxes

Alaska's gas tax is only $0.09 per gallon (including excise tax and other fees), making it one of the states with the lowest gas taxes.

There is no state sales tax on motor vehicle purchases, but local taxes may apply.

Alaska Alcohol and Tobacco Taxes

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Cigarettes$2.00 per pack
Other tobacco products75% of wholesale price
Vapor productsNo state tax (local taxes may apply)
Beer$1.07 per gallon
Wine$2.50 per gallon
Liquor$12.80 per gallon
Marijuana (mature bud and flower)$50 per ounce
Marijuana (immature bud)$25 per ounce

Alaska Estate and Inheritance Taxes

Alaska is one of the U.S. states with no estate or inheritance taxes.

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Katelyn Washington
Tax Writer

Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.

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