Alaska does not charge a state sales tax
Alaska is one of five U.S. states with no statewide sales tax. When you buy something in Alaska, you will not pay a state-level sales tax at checkout. This applies to most goods and services, including groceries, clothing, and prepared food.
However, the absence of a state sales tax does not mean all purchases are tax-free. Many Alaska cities and boroughs have their own local sales taxes, and some are substantial. Your actual tax burden depends entirely on where in Alaska you are shopping.
Alaska also has no state income tax, which is unusual among states without sales tax. This combination shapes how the state funds schools, roads, and public services — primarily through oil revenue and property taxes rather than sales or income taxes.
Key Takeaways
- Alaska has no state sales tax, so you will not see a state-level tax added to purchases anywhere in the state.
- Many Alaska cities and boroughs charge their own local sales taxes ranging from roughly 1% to 7.5%, depending on location.
- Some Alaska communities have no local sales tax at all, making them genuinely tax-free for purchases.
- Remote purchases and mail orders to Alaska may or may not be taxed depending on the seller's location and the local tax rules where the buyer receives the item.
Local sales taxes vary widely by city and borough
While Alaska has no state sales tax, dozens of cities and boroughs have adopted their own local sales taxes. These local rates are not uniform and can differ significantly even between nearby communities. A purchase in Anchorage may be taxed at a different rate than the same purchase in Juneau or Fairbanks.
Local sales tax rates in Alaska typically range from about 1% to 7.5%, though the exact rate depends on which municipality you are in. Some communities have no local sales tax at all. If you live in or frequently shop in a specific Alaska city, you should check with that city's tax assessor or revenue department to learn the current rate.
Local sales taxes in Alaska usually explore to the same categories of goods and services as state sales taxes do elsewhere — retail purchases, prepared food, and certain services. However, groceries are often exempt from local sales tax in Alaska, even where other items are taxed.
Which Alaska communities have no sales tax
Several Alaska communities have chosen not to impose a local sales tax. These areas include some smaller towns and rural communities. If you shop in one of these tax-free zones, you will not pay sales tax on most purchases.
The list of tax-free communities changes occasionally as municipalities vote to adopt or repeal local sales taxes. To find out whether your specific community has a sales tax, contact your city or borough clerk's office directly. They can tell you the current rate and which items, if any, are exempt.
How local sales tax is calculated on your receipt
When you make a purchase in an Alaska community with a local sales tax, the tax is calculated on the subtotal of your purchase and added at checkout. The rate applied depends on the tax rate in the municipality where the sale occurs — typically where the store is physically located.
If a store is located just inside a city boundary, that city's tax rate applies. If you cross into a neighboring community with a different rate, the rate changes. This matters most for large purchases or frequent shoppers near municipal borders.
Some items may be exempt from local sales tax even where the tax exists. Groceries are commonly exempt, as are certain medical devices and prescription medications. Ask the cashier or check the store's website if you are unsure whether a specific item will be taxed.
Online and mail orders shipped to Alaska
When you order something online or by mail to be delivered to Alaska, whether sales tax is charged depends on the seller's location and Alaska's tax rules. If the seller is based in Alaska, they will typically charge the local sales tax for the delivery address. If the seller is outside Alaska, they may or may not charge Alaska tax depending on their own tax obligations.
Many online retailers now charge sales tax based on the delivery address, even if the seller is located elsewhere. This means an order shipped to Anchorage may be taxed at Anchorage's local rate, while the same order shipped to a tax-free community would not be. Check the tax line on your order confirmation to see what was charged.
If you are unsure whether tax should have been charged on a specific purchase, contact the seller's customer service. They can explain their tax policy and correct any errors.
Why Alaska has no state sales tax
Alaska's lack of a state sales tax is tied to the state's oil revenue. When oil production was at its peak, the state generated enough tax revenue from oil to fund government operations without needing a sales tax or income tax. This remains true today, though oil revenue has declined from historical highs.
The state also relies on property taxes, business taxes, and other revenue sources. Some Alaskans receive annual payments from the Alaska Permanent Fund, which is funded partly by oil revenue. This combination of funding sources has allowed the state to avoid both state income tax and state sales tax.
However, local governments still need revenue for schools, roads, and services. That is why many cities and boroughs have adopted their own local sales taxes rather than relying on state funding alone.
Frequently Asked Questions
Do I pay sales tax on groceries in Alaska?
Most Alaska communities exempt groceries from local sales tax, even where other items are taxed. However, prepared food — such as deli items, hot food, or restaurant meals — is usually taxable. Check with your local municipality if you are unsure about a specific item.
What is the sales tax rate in Anchorage?
Anchorage's local sales tax rate is set by the municipality and can change. Contact the Anchorage Assessor's Office or check the city website for the current rate, as it may differ from rates in other Alaska cities.
If I buy something in a tax-free Alaska town and take it to a taxed town, do I owe tax?
No. Sales tax is charged where the purchase occurs, not where you use the item. If you bought it in a tax-free community, no tax was owed at that time. You do not owe tax later when you move or travel with the item.
Do I have to pay Alaska sales tax if I order from outside the state?
It depends on the seller. If the seller is based in Alaska, they will charge Alaska's local sales tax for your delivery address. If the seller is outside Alaska, they may or may not charge tax based on their own tax obligations and Alaska law. Check your order confirmation to see what was charged.
Can Alaska cities change their sales tax rate?
Yes. Cities and boroughs can vote to adopt, increase, decrease, or repeal their local sales tax. Changes usually take effect on a specific date set by the municipality. Contact your local government to learn about any planned changes to your area's tax rate.