Alaska state tax: overview
Alaska is one of the nine states with no income tax. In fact, Alaska actually pays legal residents who have lived there for at least one year an annual stipend, called the Permanent Fund Dividend.
Alaska doesn't have a statewide sales tax, but localities can impose their own taxes of up to 9.5%, according to the Sales Tax Handbook.
However, the average sales tax comes in at below 2%, making it one of the states with the lowest sales tax.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Alaska income tax
Alaska has no state income tax.
Alaska sales tax
Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, and you might pay local sales tax on some essentials such as groceries.
Higher rates are found in locations that lack a property tax, but not having to pay property tax might make those higher sales tax rates less painful.
How much are property taxes in Alaska?
In Alaska, the average effective property tax rate is 1.07%, which is slightly high but still lower than in many other states.
Source: Tax Foundation
Alaska Property Tax Breaks for Retirees
Alaska Senior Citizen Exemption: Homeowners 65 and older (or surviving spouses 60 and older) are exempt from municipal taxes on the first $150,000 of assessed value of their property.
Note: Other residents may qualify to have up to 40% ($75,000 maximum) of their property's assessed value exempt from property taxes.
Alaska gas tax
Gasoline: $0.08 per gallon.
Diesel: $0.08 per gallon.
Source: Sales Tax Handbook
Alaska alcohol and tobacco taxes
Alaska tobacco taxes
| Product | Tax Amount |
|---|---|
| Cigarettes | $2.00 per pack |
| Other Tobacco Products | 75% of wholesale price |
Source: Sales Tax Handbook
Alaska alcohol taxes
| Product | Tax Amount |
|---|---|
| Wine | $2.50 per gallon |
| Beer | $1.07 per gallon |
| Liquor | $12.80 per gallon |
Source: Sales Tax Handbook
Alaska estate and inheritance taxes
Alaska is one of the U.S. states with no estate or inheritance taxes.
Related Content
-
Federal Reserve Meeting: Updates and CommentaryKiplinger experts provide commentary and analysis on the November Federal Reserve meeting.
-
Market Reaction to Election Results: What the Experts Are SayingJobs Report Election uncertainty has been removed from the list of investors' worries, helping equities soar.
-
IRS Expands Tax Breaks for Breast Cancer Screenings, ContraceptivesHealthcare Now you can get a tax deduction or reimbursement for certain medical expenses, like over-the-counter birth control and condoms.
-
Adoption Tax Credit 2024: What You Need to KnowTax Credits The federal adoption tax credit is slightly higher for 2024. Here’s what you can claim under the tax break designed to help grow your family.
-
New 2025 Child Tax Credit Announced: How Much Is It?Family Tax Credits Explore the new IRS-adjusted amounts for popular family tax credits.
-
Three Ways to Avoid the Mansion TaxProperty Tax Some homebuyers have found creative loopholes around the mansion tax, but are they legal?
-
Three Creative Ways to Lower Your Retirement TaxesTax Tips You can apply key minimalism concepts for potential tax savings. Here’s how.
-
States That Offer a Child Tax Credit in 2024Child Tax Credit Fifteen states plus the District of Columbia currently offer a child tax credit. Here’s how much you can get.
-
Three Tax Reasons to Retire in PanamaRetirement Taxes With low property taxes and tax-free foreign income, this tropical paradise could make you rethink retirement as a U.S. expat.
-
Is the IRS Coming for Your Gambling Winnings?Tax Tips The latest tax audit on unreported income points to high-income, high-wealth gamblers. Could
