Alaska does not have a statewide sales tax
Alaska is one of five states with no sales tax at the state level. You will not pay a state sales tax on purchases anywhere in Alaska, regardless of what you buy or where you shop. This applies to groceries, clothing, vehicles, and everything else sold at retail.
However, the absence of a statewide tax does not mean Alaska has no sales tax at all. Some cities and boroughs within Alaska do collect local sales taxes, and the rates vary by location. A purchase in Juneau may be taxed differently than the same purchase in Anchorage or Fairbanks.
Alaska funds state operations through other revenue sources, primarily oil taxes and the Permanent Fund, rather than through sales or income taxes. This structure has shaped Alaska's tax environment for decades.
Key Takeaways
- Alaska has no statewide sales tax, making it one of five states without one.
- Local sales taxes exist in some Alaska cities and boroughs, ranging from roughly 0% to 7.5% depending on location.
- You need to check your specific city or borough to know what local tax rate applies to your purchases.
- Online purchases shipped to Alaska may or may not be taxed depending on the seller's location and Alaska's tax laws.
Which Alaska cities and boroughs charge local sales tax
Not all Alaska municipalities collect sales tax. Some have no local tax at all, while others have established their own rates. The tax rate depends on which city or borough you are in when you make the purchase.
Anchorage, the largest city in Alaska, does not charge a local sales tax. Juneau, the state capital, charges a 5% sales tax. Fairbanks charges a 0% sales tax (no local tax). Ketchikan charges a 5% sales tax. Sitka charges a 5% sales tax. Smaller towns and unincorporated areas may have different rates or no tax at all.
The rate you pay depends on the location of the business where you make the purchase, not where you live. If you buy something in Juneau, you pay Juneau's rate. If you buy the same item in Anchorage the next day, you pay no sales tax.
What items are taxed under Alaska local sales taxes
Local sales taxes in Alaska generally apply to tangible goods — physical items you can touch and take with you. This includes clothing, groceries, household goods, vehicles, and most retail purchases. The specific items taxed can vary slightly by municipality, as each city or borough sets its own rules.
Services are often treated differently. Haircuts, repairs, professional services, and labor may or may not be taxed depending on the local ordinance. Some municipalities exempt groceries or certain food items, while others tax all food purchases.
If you are unsure whether a specific item or service is taxed in your location, contact your city or borough tax office directly. They can tell you the exact rate and what falls under the tax in your area.
How to find the sales tax rate for your location
The easiest way to find your local sales tax rate is to contact your city or borough clerk's office by phone. They can tell you the current rate and answer questions about what is and is not taxed in your area. Most municipalities have this information on their websites as well.
You can also ask a cashier at a local business what the tax rate is in that city. Since the tax is applied at the point of sale, any retailer in your area will know the rate.
If you are moving to Alaska or planning to relocate within the state, knowing the local tax rate can help you budget. A move from Anchorage (no local tax) to Juneau (5% tax) will change what you pay on everyday purchases.
Sales tax on online and mail orders shipped to Alaska
Online retailers are not required to collect Alaska sales tax on orders shipped to Alaska addresses, because Alaska has no statewide sales tax. However, some online sellers may still collect local sales tax if they have a physical location in a specific Alaska municipality that charges tax.
This means most online purchases arrive tax-free, even if you live in a city like Juneau that does charge local sales tax on in-person purchases. The difference between buying online and buying in a store can be significant, especially on larger purchases.
Some retailers voluntarily collect tax anyway, so it is worth checking the final price before you complete an online order. If tax appears on your receipt, you can contact the seller to ask why.
How Alaska funds state services without sales or income tax
Alaska has no statewide income tax and no statewide sales tax. Instead, the state relies on oil taxes, which generate revenue from oil production on state land and in state waters. This has been Alaska's primary funding source for decades.
The state also uses the Permanent Fund, which invests oil revenues and distributes annual dividends to Alaska residents. A portion of Permanent Fund earnings goes to the state budget, and residents receive the remainder as a yearly payment.
Property taxes, business licenses, and other fees make up the remainder of state and local revenue. This structure means Alaska residents generally pay lower overall taxes than residents of states with sales and income taxes, though the benefit depends on oil prices and state spending decisions.
Frequently Asked Questions
Do I pay sales tax on groceries in Alaska?
It depends on your location. If you live in Anchorage, you pay no sales tax on groceries. If you live in Juneau or Ketchikan, you pay the local rate (5% in both cases). Check your city or borough's rules, as some municipalities exempt food while others tax it.
Is there sales tax on cars purchased in Alaska?
Vehicle purchases are subject to local sales tax in municipalities that charge it. In Juneau, you would pay 5% sales tax on a car purchase. In Anchorage, you would pay no sales tax. The tax applies at the point of sale based on where the dealer is located.
What if I buy something online from a company outside Alaska?
Most online retailers do not collect Alaska sales tax because Alaska has no statewide tax. You typically pay no tax on the order. If the retailer has a physical store in an Alaska city that charges local tax, they may collect that rate, but this is uncommon.
Do cruise ship purchases get taxed when I leave from Alaska?
Purchases made on a cruise ship or at the port before departure are generally not subject to Alaska sales tax, even in cities that charge local tax. The tax treatment depends on where the purchase occurs and the cruise line's policies.
Can Alaska cities change their sales tax rate?
Yes. Each municipality can set, raise, or lower its local sales tax rate through a local vote or city council decision. Rates can change, so it is worth checking your city's current rate if you have not lived there recently.