Alaska has no personal income tax and no statewide sales tax, which leads many people to assume that Alaska has no tax issues at all. In practice, federal returns still apply, corporations pay a state income tax, employers deal with an unusual unemployment insurance system, and local governments levy property and sales taxes. Seasonal workers, remote workers and people moving in or out of the state also face questions about which state can tax them. We help Alaska clients remotely from our Naperville, Illinois office.
Individual income: none at the state level
According to the Alaska Department of Revenue, the state does not have an individual income tax and therefore requires no employee withholding for state income tax. An Alaska resident files a federal return only, with no Alaska return to prepare.
The yearly Permanent Fund Dividend is a common surprise. Alaska does not tax it, but the IRS treats it as income that must be reported on the federal return, on Schedule 1. Residents who receive it should plan for the federal tax, especially if they do not have withholding on other income.
Where the picture gets more complicated is for people who touch Alaska but live elsewhere, or the reverse:
- A worker who lives in another state and works a seasonal job in fishing, tourism or on a rotation schedule owes no Alaska income tax, but the home state generally taxes that income.
- An Alaska resident who works remotely for an employer in another state, or who spends time working physically in another state, may owe that state's nonresident income tax.
- Someone who leaves Alaska for a state with an income tax should confirm the date they became a resident of the new state.
Our multi-state tax service covers these cases.
Business taxes
Alaska does tax corporations. The tax is based on federal taxable income with Alaska adjustments. Rates are graduated from 0 to 9.4 percent: the 0 percent rate covers taxable income of $25,000 and below, and the 9.4 percent rate applies at $222,000 and over. Multistate corporations apportion income on a water's edge basis using property, payroll and sales, while oil and gas corporations use a modified formula applied to worldwide income.
Timing rules are strict. Payment is due by the 15th day of the fourth month after year end and cannot be extended, even though the return itself is due 30 days after the federal due date and extends automatically when the federal return is on extension. Large payments must be made online or by wire.
Alaska's best-known business taxes are on natural resources. The Tax Division also administers an oil and gas production tax, an oil and gas property tax, mining license tax, fisheries taxes, marijuana, motor fuel, alcohol and tobacco taxes, a vehicle rental tax and a commercial passenger vessel excise tax. Which of these matter depends entirely on your industry. If your business is a small LLC or S corporation operating in Alaska, the practical questions are usually local taxes, payroll registration and unemployment insurance.
Sales and use tax
The Department of Revenue says Alaska has no state sales and use tax, though some local jurisdictions impose local sales taxes. The Department of Commerce, Community, and Economic Development publishes an annual overview, titled Alaska Taxable, listing each community, whether it collects taxes and at what rate. Rates and bases differ across municipalities, so a seller delivering across Alaska may have to track several local jurisdictions. See our sales tax service and sales tax nexus guide for how remote-seller rules work in other states.
Payroll in Alaska
- Income tax withholding: none at the state level, according to the Department of Revenue. Federal withholding and payroll taxes still apply.
- Unemployment insurance: run by the Department of Labor and Workforce Development, which calls it the Employment Security Tax. For 2026 the taxable wage base is $54,200 per worker and the employee rate is 0.50 percent, so employees help fund the system. The total rate is the employer rate plus the employee rate. This is higher than the base in many states, so payroll software needs the right annual figure. See state unemployment insurance.
- Workers' compensation: administered by the same department. Our workers' compensation overview explains the basics.
- New hires and paid leave: check the Department of Labor and Workforce Development and the child support agency for current requirements; the new hire reporting guide explains the federal framework.
If some of your employees live and work in other states, multi-state payroll rules apply to them.
Boroughs, cities and local taxes
Alaska is organized into boroughs and cities, and local governments carry most of the load for sales and property taxes. The Municipality of Anchorage taxes real property, personal property and business property. Its calendar illustrates the rhythm: January 1 is the statutory lien date, real property valuation notices go out by mid-January, business personal property forms are due April 30, tax bills are mailed June 1, and the first half is due June 30 and the second half August 31. Anchorage has a Downtown Improvement District assessment as well. Other municipalities have different schedules.
Because Alaska residents cannot deduct unlimited state and local taxes federally, the property tax portion still belongs in your federal planning; see SALT deduction and property taxes.
How we can help
We prepare federal returns for Alaska residents and workers, coordinate with other states when you have income there, prepare corporate returns, and help employers set up payroll and track Alaska's wage base. If you receive a state or local notice, see state tax notices and representation. Contact us to start; this page is general information only.
Frequently asked questions
Do I have to file an Alaska state income tax return?
No individual return is required because Alaska does not have an individual income tax. You still file a federal return, and you may have to file a return in another state if you earned income there.
Is the Permanent Fund Dividend taxable?
Alaska does not tax it, but the IRS requires you to report it as income on your federal return.
Do Alaska employees pay unemployment insurance tax?
Yes. For 2026 the employee rate is 0.50 percent of wages up to the $54,200 wage base, in addition to the employer's contribution.
Does Alaska have a sales tax?
Not at the state level. Some boroughs and cities charge their own sales tax, so check the community where you sell.
Official sources
- Alaska Department of Revenue: Personal income tax
- Alaska Department of Revenue: Corporate income tax
- Alaska Department of Labor and Workforce Development: 2026 unemployment insurance tax rates
- IRS: Publication 525, Taxable and Nontaxable Income
- Municipality of Anchorage: Important dates for property taxation
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.