Alaska Taxes Explained: What Alaskans Do and Don't Pay

Updated November 2, 2026 · By the Finance North team

Alaska is one of the few U.S. states with no state personal income tax, and it's the only state with neither a state income tax nor a statewide sales tax. That doesn't mean Alaskans pay no taxes: you still pay federal income tax (including on the PFD), and cities and boroughs can charge sales, property and other local taxes. What you owe depends heavily on where you live.

Taxes at a glance

Why Alaska has no income tax

Alaska repealed its personal income tax in 1980, after oil from Prudhoe Bay began flowing through the Trans-Alaska Pipeline and petroleum revenue grew dramatically. Oil taxes and royalties funded most of state government for decades. Today, earnings from the Permanent Fund are also a major source of state revenue. Whether to add a broad-based tax comes up regularly in state budget debates, so it's worth following the news.

Local sales taxes

While there's no statewide sales tax, many Alaska municipalities levy their own. Rates and rules differ by community, and some boroughs and cities add seasonal rates, caps on taxable amounts per purchase, or exemptions for seniors or food. A few examples of how it varies:

• Anchorage has no general sales tax, but it does have taxes on specific items, such as alcohol sales, hotel stays, car rentals and tobacco.
• Juneau, Kenai Peninsula Borough communities, Kodiak and many other cities charge general sales taxes.
• Mat-Su communities vary: cities such as Wasilla and Palmer have their own sales taxes.
• Fairbanks North Star Borough doesn't have a general sales tax but has other local taxes, such as on hotel stays.

Check your city or borough's official website for current rates, caps and senior exemptions.

Online shopping and remote sellers

Many Alaska local governments have joined the Alaska Remote Seller Sales Tax Commission, which administers local sales tax on online purchases shipped to member communities. If you live in a participating community, expect sales tax at checkout on many online orders.

Property taxes

Property taxes are levied by organized boroughs and cities, not by the state on individual homes. Your tax is your property's assessed value times the local mill rate (one mill equals $1 per $1,000 of assessed value). Large parts of Alaska are in the "Unorganized Borough" and have no borough-level property tax, though some cities there levy their own.

Exemptions to know

• Senior citizens and disabled veterans: State law requires municipalities that levy property tax to exempt the first $150,000 of assessed value for qualifying residents who are 65 or older and for qualifying disabled veterans, on their primary residence. Some municipalities add further local exemptions.
• Residential exemptions: Some municipalities offer an optional exemption for owner-occupied primary residences.
• Deadlines matter: Exemptions usually require an application by a local deadline. Contact your borough or city assessor.

Federal taxes for Alaskans

Alaskans file federal returns like everyone else. A few Alaska-specific federal points:

• The PFD is taxable federal income, including dividends paid to children. See our PFD guide.
• Commercial fishers and seasonal workers may need to make estimated quarterly tax payments if not enough is withheld.
• Federal employees in Alaska receive locality pay that is taxable like other wages.
• Alaska Native Claims Settlement Act (ANCSA) corporation distributions have specific federal tax rules; your corporation typically provides tax information.

Other taxes and fees you'll notice

• Motor fuel tax: Alaska's state gas tax has historically been among the lowest in the country, though fuel prices are still often high because of transportation costs.
• Vehicle registration taxes: Some municipalities, including Anchorage, add a local motor vehicle registration tax.
• Tire fees: Alaska charges fees on new tires, with an additional fee for studded tires.
• Hotel/bed taxes: Common in tourism communities.
• Alcohol and tobacco excise taxes at both state and local levels.

Moving to Alaska? Tax tips

1. Part-year returns: If you move from a state with income tax, you may need to file a part-year resident return for your old state.
2. Prove your move: Update your driver's license, vehicle registration, voter registration and mailing address promptly. Some high-tax states audit people who claim to have moved.
3. Remote work: If your employer is in another state, check whether that state taxes nonresidents working remotely. Most don't, but some have special rules.
4. Budget for local taxes based on the specific community where you'll live and shop.