Are Remote Sellers on the Hook for Local Alaska Sales Tax?
- Sales Tax
- April 29, 2016 | Laura McCamy
There’s a saying that all politics is local. Well, in Alaska, all sales taxes are local. There is no statewide sales tax, so whether you owe Alaska sales tax depends on some very local factors.
If you are based in another state and ship orders to customers Alaska, you don’t need to pay any sales taxes in Alaska unless you have nexus. You could get nexus that would require you to pay sales taxes in Alaska by having a sales rep or contractor or a warehouse that stores your products in one of the cities that has a local sales tax.
While the sales tax rate for much of Alaska remains at zero, there are more than 190 cities, boroughs, special tax districts, and other entities that levy their own sales taxes. These local rates range from 1 percent to 8 percent.
If you are like the vast majority of ecommerce sellers, you don’t need to worry about collecting and remitting sales taxes on the orders you ship to customers in Alaska. If you do have nexus inside one or more of the areas with a local sales tax, however, prepare for a bit of a headache.
In most states, even if sales tax rates vary between cities and counties, you can register to collect sales taxes with a statewide entity. Even if you owe tax at multiple rates, you still pay all your sales taxes to one central agency.
Not so in Alaska. Sellers need to register with the city or other taxing body where they owe local Alaska sales taxes and pay those taxes directly to each entity. In fact, the state is so decidedly not in the business of collecting sales taxes that the Alaska Department of Revenue has just one paragraph about sales taxes on its website.
The state publishes an annual guide to all things tax, including sales taxes, called Alaska Taxable. Scroll down to find the table of local sales tax rates. And then thank your lucky stars if you don’t have nexus in any of the localities that levy sales taxes under this very complex system.