Rocky Mengle
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 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.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
[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 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.
Related Content
-
New Trump Gambling Losses Deduction Limit: Who Pays More Tax in 2026?Tax Changes A gambling loss tax deduction change in Trump’s “Big Beautiful Bill” is causing an uproar. Here’s what you need to know.
-
Could a Micro-Retirement Be the Refresh You Need?Don't wait until you turn 65: Why more people are taking "micro-retirements," or short, strategic breaks, years before they retire.
-
Why Your Summer Budget Feels Tighter: Tariffs Push Up InflationTariffs Your summer holiday just got more expensive, and tariffs are partially to blame, economists say.
-
Alabama Tax-Free Weekend 2025Tax Holiday Here’s everything you need to know about the 2025 back-to-school Alabama sales tax holiday.
-
Parents Prepare: Trump's Megabill Brings Three Crucial Tax ChangesTax Changes Are you a parent? The so-called ‘One Big Beautiful Bill’ (OBBB) impacts several key tax incentives that can affect your family this year and beyond.
-
‘I Play Pickleball in Retirement.’ Is It HSA-Eligible?Retirement Tax Staying active after you retire may be easier with these HSA expenses. But there’s a big catch.
-
Mississippi Tax-Free Weekend 2025Tax Holiday Just in time for Prime Day, Mississippi celebrated a tax holiday in July. Find out what back-to-school essentials were included.
-
Ten Cheapest Places to Live in VirginiaProperty Taxes The Commonwealth of Virginia has some cheap places to live. Here are a few if you hate paying property taxes.
-
2025 SALT Cap Could Hurt Top 'Hidden Home Cost'Tax Deductions The GOP tax bill could make hidden homeowner costs worse for you. Here’s how.
-
Retire in the Bahamas With These Three Tax BenefitsRetirement Taxes Retirement in the Bahamas may be worth considering for high-net-worth individuals who hate paying taxes on income and capital gains.
