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Alaska is one of only nine states with no income tax. That means employers do not withhold state or local taxes from Alaska resident’s paychecks.
While Alaska residents aren’t charged state income taxes, they might have to pay other taxes. This guide examines when you need to file an Alaska state tax return, sales tax rates and more.
Alaska personal income tax rates
Alaska residents do not have to pay income taxes.
|Alaska personal income tax rates|
|Tax rate||Single, married filing separate||Married filing jointly|
|Source: Alaska Department of Revenue|
Who has to file Alaska state taxes?
If you own a business, Alaska does levy taxes on any income earned from your company. The tax rate varies between 0 percent to 9.4 percent, ranking the state 26th nationally for the corporate tax rate.
Moreover, the state requires businesses to file annual returns, due 30 days after the filing date for federal income taxes. You might also have to make estimated payments quarterly, with all liabilities generally due on April 15. While you can file extensions for your return, you cannot gain an extension on your tax liability.
Alaska sales tax rate
Alaska also doesn’t assess a sales tax rate. However, localities might impose a sales tax. The average rate is 1.76 percent, which is low compared with other states that may charge tax for both state and local sales.
Other things to know about Alaska state taxes
While your tax liability is inexpensive due to no state tax and the low sales tax rate, there are other ways the state collects taxes. It charges a gas tax rate of 14.35 cents per gallon, which is the cheapest in the nation. Alaska residents also pay a $2.00 cigarette tax (dollars per 20-pack).
If you file a return on corporate income taxes, you can file online through the Alaska Department of Revenue, Tax Division. If you plan to make estimated tax payments exceeding $100,000 or a return with a liability of more than $150,000, you’ll have to pay online or through a wire transfer.