Alaska does not have a statewide sales tax
Alaska is one of five U.S. states with no statewide sales tax. When you buy something in Alaska, you do not pay a sales tax at the point of sale the way you would in most other states. This applies to groceries, clothing, vehicles, and most other goods.
However, the absence of a statewide tax does not mean Alaska has no sales tax at all. Some cities and boroughs within Alaska do charge local sales taxes, and the rate varies by location. Anchorage, Juneau, Fairbanks, and dozens of smaller communities each set their own rates. If you live in or are buying from one of these places, you will pay a local tax even though the state does not.
Key Takeaways
- Alaska has no statewide sales tax, but roughly half of Alaska cities and boroughs charge local sales taxes ranging from 0% to 7.5%.
- Anchorage charges 3.5% local sales tax; Juneau charges 5%; Fairbanks charges 0% (though some surrounding areas charge 2%).
- Online purchases shipped to Alaska are generally not subject to Alaska sales tax unless the seller has a physical location in Alaska.
- Some items like groceries are taxed at the local rate where you buy them, not exempted as they are in many states.
Local sales tax rates by major Alaska city
Because Alaska allows cities and boroughs to set their own rates, the tax you pay depends entirely on where the transaction happens. The largest cities have established rates that have remained stable for years, but smaller communities vary widely.
| City or Borough | Local Sales Tax Rate |
|---|---|
| Anchorage | 3.5% |
| Juneau | 5% |
| Fairbanks | 0% |
| Ketchikan | 5% |
| Sitka | 5% |
| Valdez | 4% |
| Barrow | 6% |
Many smaller communities and unincorporated areas have no local sales tax at all. If you are buying in a place you are unfamiliar with, you can contact the city or borough clerk's office to confirm the current rate, or ask the business where you are shopping.
What items are taxed in Alaska
In Alaska cities that do charge sales tax, most goods and services are taxed at the local rate. Unlike many states, Alaska does not exempt groceries, prescription medications, or clothing from local sales tax. If your city has a 3.5% rate, you pay it on food, medicine, and everything else.
Some services are not taxed. Labor and professional services — such as haircuts, repairs, or consulting — are typically not subject to local sales tax in most Alaska communities, though this varies by municipality. Rental of real property (apartments, houses, land) is not taxed. Fuel used for heating is also generally exempt.
If you are unsure whether a specific item or service is taxed where you live, the local tax assessor's office or the business itself can tell you. Rates and rules can differ between neighboring communities.
How online purchases are taxed
When you order something online and have it shipped to an Alaska address, you typically do not pay Alaska sales tax unless the seller has a physical presence (a store, warehouse, or office) in Alaska. This is true even if you live in a city that charges local sales tax.
However, some large online retailers now collect sales tax on orders shipped to Alaska regardless of whether they have a physical location there. This practice is still evolving, and different companies handle it differently. If you see a sales tax charge on an Alaska order, it may be because the seller has chosen to collect it, or because they operate in a state that requires it.
If you are a business selling goods online and shipping to Alaska customers, you should consult a tax professional or the Alaska Department of Revenue about your obligations, as the rules depend on your business structure and location.
Why Alaska has no statewide sales tax
Alaska funds state government primarily through oil revenue rather than sales or income taxes. The state has historically relied on petroleum taxes and royalties from oil production on the North Slope. This revenue model has allowed Alaska to avoid both a statewide income tax and a statewide sales tax — a combination unique among U.S. states.
As oil revenue has fluctuated, the state has faced budget pressures, and there have been periodic discussions about introducing a statewide sales tax or income tax. However, no such tax has been enacted. Local governments, by contrast, depend on local sales taxes and property taxes to fund schools, police, and other services, which is why the local rates vary so much across the state.
Frequently Asked Questions
Do I pay sales tax on groceries in Alaska?
Yes, if you live in a city or borough that charges local sales tax. Groceries are not exempt in Alaska the way they are in many other states. In Anchorage, for example, you pay 3.5% tax on food purchases. In Fairbanks, which has no local sales tax, you pay nothing.
Is there sales tax on gas and fuel in Alaska?
Gasoline for vehicles is subject to local sales tax in most Alaska communities that charge it. Heating fuel is typically exempt. The rate depends on where you buy it. Check with your local tax assessor or the gas station to confirm the rate in your area.
What if I buy something in Fairbanks and move it to Anchorage?
The tax is based on where the sale occurs, not where you take the item afterward. If you buy something in Fairbanks (which has no local sales tax), you pay no tax at the point of sale. Moving it to Anchorage later does not trigger a tax.
Do I have to pay sales tax on used items or private sales?
Private sales between individuals are generally not subject to sales tax. However, sales through a business — including used car dealers and consignment shops — are taxed at the local rate where the business is located.
Can I get a sales tax refund if I'm visiting Alaska?
Alaska does not have a sales tax refund program for visitors the way some countries do. If you pay local sales tax on a purchase in an Alaska city, that tax is not refundable. Plan your budget accordingly if you are shopping in Juneau, Ketchikan, or other high-tax communities.