Alaska Sales Tax Demystified
by November 1, 2020
Alaska is a little different than most other states with sales tax. This blog post will dig in to what eCommerce sellers need to know about when to collect sales tax in the Last Frontier State.
Alaska Sales Tax 101
Unlike the other US States (and Washington DC) that have a sales tax, Alaska does not have a statewide sales tax.
Instead, the state recently passed legislation allowing local jurisdictions to elect to require that eCommerce businesses with economic nexus to collect sales tax. You can find a list of local jurisdictions that require sellers with economic nexus in Alaska to collect here.
You can read the text of Alaska’s Remote Seller Sales Tax Code (ARSSTC) here. Once a jurisdiction has adopted the code, online businesses with economic nexus in Alaska have 30 days to begin collecting sales tax from buyers in participating jurisdictions.
How do I know if I have economic nexus in Alaska?
Alaska’s economic nexus law requires that businesses who meet the following requirements collect sales tax:
- Have gross sales of $100,000 or more of any type (products, services, etc.) in the state in the previous calendar year OR
- Made 200 or more sales transactions into the state in the previous calendar year
Example #1:
Sarah’s company is located in Washington state. She sells to buyers in Alaska, but only made 150 sales transactions for a total of $40,000 in sales to buyers in Alaska in the previous calendar year. Sarah’s eCommerce business does not meet Alaska’s economic thresholds and her accounting department is not required to register for and collect Alaska sales tax.
Example #2:
The next year, Sarah’s company in Washington state ramps up their marketing efforts. This time they sell 205 transactions into Alaska, but only gross $90,000 in sales. But, because they exceeded the 200 transaction threshold, Sarah’s company is now considered to have economic nexus in Alaska and is required to register and collect Alaska sales tax.
Let TaxJar keep you up-to-date on when you have economic nexus
TaxJar customers on our Professional plan or above will now receive an Economic Nexus Insights Notification when your business is approaching Alaska’s economic nexus threshold tax. (Or, when your business is approaching economic nexus in any other US state!)
My business is located in Alaska. How does Alaska sales tax apply to me?
A notice at the ARRSTC website covers this use case. They even provide a handy chart to help you determine, as a business with a presence in Alaska, if you are required to register and collect sales tax.
If you have physical presence (such as an office, store or employee) in Alaska and your business is physically located in a jurisdiction that has adopted the Alaska Code, then you are required to collect and remit sales tax.
If you have a physical presence in Alaska that creates nexus and your physical nexus is not in a local jurisdiction that’s adopted the code, you do not need to collect and remit sales tax.
Further, if you have a physical presence in Alaska which is not in a local jurisdiction that’s adopted the code, you can be considered a “remote seller” if you sell into those local jurisdictions that have adopted the code.
Is SaaS taxable in Alaska?
SaaS is taxable in Alaska. (Source)
How do I register for an Alaska sales tax permit?
Find instructions on how to register for an Alaska sales tax permit here.
I have questions about Alaska remote seller sales tax. How can I find more information?
Contact the Alaska Remote Seller Sales Tax Commission.
Can TaxJar help me collect Alaska sales tax?
Yes! The TaxJar API supports sales tax calculations in applicable local jurisdictions within Alaska. We continuously update our API as new Alaska jurisdictions require sales tax or as sales tax rates update and change. Collect the right sales tax rate from the right customer every time.
Learn more about the TaxJar API here.
I’m collecting Alaska sales tax. Can TaxJar help me file my returns?
Yes! Remote sellers (sellers located outside of Alaska) who find they are required to collect sales tax in local Alaska jurisdictions due to Alaska economic nexus can use TaxJar Reports to file your Alaska sales tax return.
File your Alaska sales tax return here.
Ready to automate sales tax? To learn more about TaxJar and get started, visit TaxJar.com/how-it-works.
