Economic Nexus: The Ultimate Guide
Economic Nexus in Alaska
byMarch 26, 2020
State laws on economic nexus vary and its hard to keep up if you’re doing business in multiple states. We’ve done the research for you and here’s all the information you need to know about economic nexus in Alaska.
Alaska doesn’t have a statewide sales tax, but the state does allow some local areas to levy a tax. This means that some higher-volume sellers who never before had to worry about collecting and filing sales tax in Alaska will now be required to collect Alaska sales tax.
What is economic nexus in Alaska?
With the Supreme Court ruling in favor of South Dakota in the South Dakota v. Wayfair case, states are now free to pursue sales tax from eCommerce businesses who have a “significant presence” in their state.
Significant presence or “nexus” was previously defined as having a physical presence (ex: brick and mortar store, employee, or inventory in a fulfillment center like FBA). But with this ruling, this definition has been expanded to include economic activity in a state as well. This concept of triggering sales tax responsibility because of your economic activity in a state is now referred to as economic nexus.
Most important, this now means that if you pass a state’s economic threshold for total revenue in that state and/or number of transactions in that state, you’re now legally required to register, collect and remit sales tax for that state.
What is different about Alaska’s economic nexus law?
Alaska’s economic nexus law is a little different from other economic nexus laws. For one, Alaska does not have a statewide sales tax. Rather, Alaska allows individual jurisdictions to levy a sales tax if they choose to. Each jurisdiction in Alaska has been given the chance to adopt Alaska’s Remote Seller Sales Tax Code. 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.
You can see a list of participating Alaska jurisdictions here.
What’s the threshold for economic nexus law in Alaska?
- State: Alaska
- Threshold: $100,000 or more in sales to the state, or 200 or more sales transactions into the state in the current or previous calendar year
- Summary: The Code requires remote sellers and marketplace facilitators to register with the commission and collect and remit the tax on their sales into member Alaska localities if the sellers or facilitators have $100,000 or more in annual gross receipts from sales, or 200 or more sales annually into the state.
- Full text: Read Alaska’s remote seller sales tax code here
When did the Alaska economic nexus law go into effect?
Alaska’s economic nexus law is a little different than other economic nexus laws. The Alaska Remote Seller Sales Tax Code was passed on January 6, 2020. However, from there local jurisdictions decide whether to adopt the code. And once a local jurisdiction has adopted the code, businesses have 30 days to begin collecting sales tax from Alaska buyers located in that jurisdiction.
I meet the economic nexus threshold in Alaska. Now what?
Here’s a quick checklist of what to do next:
- Register for a sales tax permit in Alaska
- Choose a technology like TaxJar to help you manage multi-state compliance. Sign up for a free 30-day trial to see how we can help you save time!
- Connect TaxJar once to all of the places you sell
- Ensure all your eCommerce channels are setup correctly to collect sales tax
- Enroll in AutoFile and tell us how often you need to file
- Relax, you now handled your sales tax exposure. We’ll handle the rest for you.
Can you help me register for an Alaska sales tax permit?
Certainly! TaxJar offers these two options:
- Read our do it yourself instructions for every state
- Visit TaxJar.com/register to have one of our expert partners do it for you (~$100 each state not including state’s fees)
I’ve met this threshold in Alaska, now where can I ask questions?
We recommend speaking with a vetted sales tax expert to answer specific questions for your business.
Alaska has also published guidance for remote sellers with sales tax nexus in Alaska.