Rocky Mengle
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
-
Stock Market Today: Stocks Gain on Tech, Auto Tariff TalkThe Trump administration said late Friday that it will temporarily halt tariffs on some Chinese tech imports.
-
Sam's Club Plans Aggressive Expansion: Discover Its New LocationsSam's Club expansion plans will open up to 15 new stores each year. Learn where they plan to open in 2025.
-
Tax Time: Does Your Kid Influencer Owe Taxes?State Tax Some minors are making big money on social media. Here’s how to know if they need to file taxes.
-
Free IRS Tax Filing for 30 Million People: Will It Continue Under Trump?Tax Filing Direct File was piloted last year in 12 states and has since expanded to 25. But some wonder whether the program will last under the Trump administration.
-
How Caregivers for Adults Can Save on Taxes in 2025Tax Breaks Caring for your parent or spouse can be stressful, but the IRS offers tax breaks for qualifying taxpayers. Here they are.
-
U.S. Treasury to Eliminate Paper Checks: What It Means for Tax Refunds, Social SecurityTreasury President Trump signed an executive order forcing the federal government to phase out paper check disbursements by the fall.
-
IRS Layoffs Spark Delays, Doubt This Tax Season
Tax Season Tax experts say Trump’s downsizing of the IRS is already causing problems.
-
States with the Highest Income Tax Rates for RetireesState Tax You may reconsider living and retiring in one of these states due to high taxes.
-
AI Tax Scams Target Middle and Older Adults: What to KnowScams Whether you’re a retiree or Gen Z, scammers can gouge big financial losses with the help of artificial intelligence.
-
Tax-Deductible Home Improvements for Retirement in 2025Retirement Taxes Your aging-in-place plan could benefit from the medical expense tax deduction. But watch out for capital gains and property taxes.
