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Local Government Resource Desk

Taxation & Assessment

Sales Tax


At present, the State of Alaska does not levy a sales tax. There are, however, several municipal governments that do. The state constitution and other state law give very broad authority to cities and boroughs regarding sales tax; however, a sales tax is not authorized unless an election is held on the question and it is approved by a majority of the voters.

There are very few non-taxable items (exemptions) required by state law. This allows a municipality a lot of power to decide what is and is not taxable. State law also allows municipalities that levy a sales tax to levy a use tax, which is a tax levied on the storage, use, or consumption of goods in a municipality.


There is currently little state regulation of sales and use tax. State law gives local government’s broad authority in enacting a sales tax ordinance and determining what is and is not taxable. At one time there was a limit on the maximum amount a municipality could charge for a sales tax, but that limit has been removed. For information on what is not taxable, contact the municipality directly. There are some exemptions spelled out in state law; however, other than these few required exemptions, exemptions are a local issue. Out of 162 municipal governments on the state approximately 110 levy some form of a sales tax which range from a low of 1% to a high of 7%. If both a borough and a city located within that borough levy sales taxes, the sales tax due from the consumer is the sum of the two taxes.

Frequently Asked Questions

Can I get the proper form from the state to file my sales tax with the local municipality?

No. In order to file your return, you must get the form from the municipality in which you conducted your business and owe the tax.

Do I have to pay a use tax on goods that I have already paid a sales tax on?

Not necessarily. State law requires that if you furnish proof to the municipality that you have paid a sales tax on the item, you will only have to pay for the difference in the amount of the sales tax paid and the use tax, if there is a difference.

Where can I get a listing of all municipalities that levy a sales tax?

There are two places to find that information. The department’s publication, Alaska Taxable is a annual publication that lists all municipalities and the types of tax each levies. Alaska Taxable also lists the amount of taxes collected by each of these municipalities. The information in Alaska Taxable is "dated," meaning that it reflects the information up to a given date, usually July 1 of the prior year. You can get more current information from the Division of Community and Regional Affairs's website: "Alaska Community Database Online"

Can I be charged a sales tax by both the city and the borough?

It is possible. State law allows both cities and boroughs to levy a sales tax. In many boroughs that levy a sales tax, it is not unusual for a city within that borough to also levy a tax. (AS 29.45.650 and AS 29.45.700).

What is a use tax and how does it work?

A use tax is a tax that is levied on goods that are bought outside the taxing authority's jurisdiction and then brought into the jurisdiction. This tax is designed to discourage the purchase of products that are not subject to a sales tax. By state law, this tax may be levied on the storage, use, or consumption of goods in the borough/city. The use tax must equal the sales tax rate and is levied only on buyers (AS 29.45.650(b)).

Applicable Laws and Regulations

Alaska Constitution

  • Article IX, Section 1 Taxing power.
  • Article X, Section 1 Provision for maximum local self government and non-duplication of taxing jurisdictions.
  • Article X, Section 2 Dication of taxing powers to boroughs and cities only.

Alaska Statutes

  • AS 29.35.010 General powers and duties of municipality, authorization to levy tax and enforce tax law.
  • AS 29.35.170 Assessment and collection of tax, borough collection of city tax.
  • AS 29.45.650 Borough sales and use taxes, exemptions by ordinance, interest on delinquent sales tax - limitations, liens, lien priority, mandatory exemptions.
  • AS 29.45.670 Notice of tax, publication period, revenue sharing requirement.
  • AS 29.45.670 Referendum, adoption and modification.
  • AS 29.45.680 Combining sales and use tax with incorporation of a borough, incorporation subject to passage of tax.
  • AS 29.45.700 City sales and use tax, power of levy, borough levy, borough ordinance authorizing levy of tax, mandatory exemptions.
  • AS 29.45.710 Combining sales and use tax with incorporation of a second class city, incorporation subject to
  • passage of tax.
  • AS 29.45.800-.810 Stranded gas development contract, exemption.
  • AS 29.60.010 State revenue sharing tax equalization formula.
  • AS 29.60.080 Definitions.

Revised 07/01/2013