Alaska removes economic nexus transaction threshold

Sales tax nexus is a connection between a taxing jurisdiction (e.g., a state) and a business that creates a sales tax obligation for the business. With economic nexus, that connection is economic in nature. Sales tax nexus can also be established through physical presence, referrals, and ties to in-state affiliates.

States won the authority to tax remote sales via economic nexus on June 21, 2018, when the U.S. Supreme Court ruled in favor of the state in South Dakota v. Wayfair, Inc. Today, every state with a general sales tax has an economic nexus law.

All economic nexus laws provide safe harbor for businesses with little economic activity in the state, though actual safe harbor thresholds (aka, economic nexus thresholds) vary from state to state. There are currently six different state economic nexus thresholds:

• $100,000
• $100,000 or 200 transactions
• $100,000 and 200 transactions 
• $250,000 
• $500,000 
• $500,000 and 100 transactions

In Alaska, the economic nexus threshold through December 31, 2024, is $100,000 in gross sales or 200 separate transactions in the state in the current or previous calendar year. As noted above, it will be $100,000 in gross sales only in the state in the current or previous year, starting January 1, 2025.

The Alaska Department of Revenue doesn’t administer Alaska sales taxes. 

Local governments administer sales taxes for businesses with a physical presence in a jurisdiction, but the Alaska Remote Seller Sales Tax Commission (ARSSTC) coordinates remote sales tax collection for local governments. The ARSSTC serves as the single point of sales tax administration and collection for member jurisdictions — communities that adopt the ARSSTC’s remote sales tax rules and sign the agreement.

It depends. The ARSSTC was established by an intergovernmental agreement in 2019 and began administering sales tax for local governments in the first quarter of 2020. Yet local governments adopt economic nexus at their own pace. 

For general sales tax, effective dates include:

• April 1, 2020: Homer, Kenai, Kenai Peninsula Borough, Seldovia, Seward, Soldotna, Wasilla, and Wrangell (City and Borough)
• October 1, 2021: Aniak and Nenana
• May 1, 2022: Excursion Inlet and Quinhagak
• July 1, 2023: Shungnak and White Mountain
• October 1, 2024: Mekoryuk

The city of Gambell joined the ARSSTC in September 2024 but hasn’t yet adopted remote sales tax rules. It will likely start enforcing economic nexus at some point in 2025. 

See the effective dates for ARSSTC’s 51 member jurisdictions.

In July 2024, the Board of Directors and member jurisdictions of the ARSSTC adopted numerous amendments to the Alaska Remote Seller Uniform Code. Among them was the repeal of the 200-transactions threshold.

Effective January 1, 2025, the economic nexus threshold for remote sellers and marketplace facilitators is $100,000 in statewide gross sales from sales of property, products, or services delivered in the state in the current or previous calendar year.

For marketplace facilitators, the threshold includes both direct sales and third-party sales. Businesses that sell through a registered marketplace need to count facilitated sales as well as any direct sales into Alaska.

If you are a remote seller or marketplace facilitator and you registered with the ARSSTC solely because you exceeded the 200-transactions threshold, you may be able to cancel your ARSSTC sales tax registration. 

According to the ARSSTC, a remote retailer or marketplace facilitator that did not make more than $100,000 in gross sales for delivery into Alaska during 2024 may elect to cancel its registration and cease collecting and remitting Alaska sales tax in 2025. You must continue collecting and remitting sales tax until you cancel your ARSSTC registration. 

Remote retailers and marketplace facilitators that cease to have sales tax nexus due to the repeal of the 200-transactions threshold may also remain registered and continue to collect and remit Alaska sales tax voluntarily. If you think your Alaska sales may soon exceed the $100,000 sales threshold, this could be the right decision for you. When in doubt, it’s usually best to consult with a trusted tax advisor.

To date, Alaska is the 14th state to repeal its economic nexus transaction threshold. It won’t be the last.  

The Streamlined Sales Tax (SST) Governing Board is encouraging SST member states to end their transaction threshold if they haven’t already done so. Two SST states — New Jersey and Utah — could follow that advice in 2025. Utah came close to chucking its 200-transaction threshold in 2024 and may try again in 2025. And New Jersey lawmakers are already considering a bill to repeal the  200-transactions threshold.

You can find a list of economic nexus thresholds in our state-by-state guide to economic nexus laws. If you’re not sure where you may have economic nexus and an obligation to collect and remit sales tax, taking our free sales tax risk assessment can help.