Overview of Alaska Taxes
Alaska has the lowest taxes in the country. There are no statewide income or sales taxes, but residents do still pay some local sales taxes. There are also property taxes. Retired? Use our Retirement Income Tax Calculator.
Number of State Personal Exemptions
Your Income Taxes Breakdown
|Tax Type||Marginal |
|Total Income Taxes|
|Income After Taxes|
* These are the taxes owed for the 2019 - 2020 filing season.
Your 2019 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2019 Tax Burden
Total Estimated Tax Burden $
Percent of income to taxes = %
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Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2019 - 2020 filing season based on the Trump Tax Plan.
How Income Taxes Are Calculated
- First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
- Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
- Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
- Your location will determine whether you owe local and / or state taxes.
- Last Updated: January 1, 2020...read more
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Taxes in Alaska
Alaska State Tax Quick Facts
- Income tax: None
- Sales tax: 0% - 7.50%
- Property tax: 1.19% average effective rate
- Gas tax: 14.32 cents per gallon of regular gasoline, 14.31 cents per gallon of diesel
Alaska Income Taxes
America’s largest and northernmost state also has the lowest taxes in the nation, as there are no statewide income or sales taxes in Alaska. Residents do need to file a federal tax return, though no state paperwork is required. Residents also receive annual checks from the state just for living there through the Permanent Fund Dividend. That doesn’t mean Alaskans pay no taxes at all, however.
There are still local sales taxes, which range from 0% to 7.50%, as well as property taxes. The average annual property tax payment is $3,117, the 12th highest in the country. Residents must also pay gas taxes and “sin” taxes on alcohol and cigarettes.
A financial advisor in Alaska can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
Alaska Permanent Fund Dividend
The Alaska Permanent Fund was created in 1976, when the Trans-Alaska Pipeline was nearing completion. The fund was established as a way of setting aside a portion of the state’s significant oil and mineral royalties for future generations, and it has grown to a value of over $50 billion. Every year, the fund pays out a dividend to permanent residents of Alaska. To claim one, you must have lived there continuously for at least one year.
The amount of the dividend varies year to year, depending on revenues to the fund and other factors. In recent years, dividend checks have ranged from a low of $878 to a high of $2,072. The payment in 2019 was $1,606. Checks are sent to every Alaska resident, not just adults or income earners. That means that if you have dependents, you receive a Permanent Fund dividend for them as well. If you’d like to invest the money in their future, Alaska makes it easy to move the dividend straight to a 529 college savings plan.
Furthermore, Alaskan students attending college out of state can continue to claim a dividend, as long as they express an intention to return to the state after graduation. There is one downside to the Permanent Fund dividend, however: The IRS considers it a taxable form of income. So it does need to be reported on your federal tax return.
Alaska Sales Tax
While there is no state sales tax in Alaska, some counties and cities do collect their own sales taxes. In fact, Alaska is the only state that does not have a statewide sales tax but does have local taxes (the other four states with no state sales taxes also do not have local sales taxes). The table below shows the total sales tax rates for every borough (the Alaskan equivalent of a county) and each of the major cities in Alaska.
Sales Tax Rates(Updated December 2019)
|Municipality||State Rate||Municipality Rate||Total Sales Tax|
|Fairbanks North Star||0.00%||0.00%||0.00%|
|Lake and Peninsula||0.00%||0.00%||0.00%|
|Prince of Wales-Hyder||0.00%||0.00%||0.00%|
|City||State Rate||Borough + City Rate||Total Sales Tax|
The rules for sales tax vary between municipalities. In some jurisdictions, sales tax rates vary by season. For example, in Whittier, the sales tax rate is 5% from April to September and 0% the rest of the year. There are a few statewide exemptions, so expect products often exempted in other states (like food and prescription drugs) to be taxed in any Alaskan city or borough with a sales tax.
Alaska Property Tax
The most significant tax on the residents of Alaska is the property tax. Statewide, average annual property tax payments are $3,117 per year, which is equal to an effective property tax rate (annual payments as a percentage of home value) of 1.19%. That is the 19th highest rate in the country.
Rates vary widely between boroughs, however. In some, like the Aleutians East Borough, the average effective rate is less than 0.2%, while in others, like Fairbanks North Star, it is about 1.23%. Anchorage has an effective property tax rate of 1.32%, second highest in the state.
For those thinking about buying property in Alaska, our mortgage guide is a good place to start researching your mortgage options. It lays out the most important information about rates and other details for getting a mortgage in the Last Frontier.
Alaska Gas Tax
Alaska has the lowest gas taxes in the country. According to the American Petroleum Institute, the state tax on regular gasoline is just 14.32 cents per gallon. The state taxes diesel at a rate of 14.31 cents per gallon.
Alaska Estate Tax
There is no estate tax in Alaska.
Alaska Alcohol Tax
The Last Frontier has some of the highest alcohol excise taxes in the country. The state’s excise tax on beer is $1.07 per gallon. That’s about 10 cents a beer, and the second highest tax on beer in the U.S. (Although the tax on beer produced by microbreweries is less than a third of that, at 35 cents per gallon).
Liquor is also heavily taxed. Any beverage with higher than 21% alcohol by volume is taxed at a rate of $12.80 per gallon.
Alaska Cigarette Tax
Smokers in Alaska pay relatively high cigarette taxes. A pack of 20 cigarettes is taxed at a rate of $2.00, or 10 cents per stick.
- If Alaska were its own country, it would be the 18th largest country by area in the world. It has an area of 663,300 square miles.
- The bear population of Alaska is approximately 135,000. Of these, the majority are black bears.
- The average high temperature for the month of January in Fairbanks is 1.1 degrees Fahrenheit. The average low is -16.9 degrees.
Places with the Lowest Tax Burden
Are you curious how your tax burden stacks up against others in your state? SmartAsset’s interactive map highlights the counties with the lowest tax burden. Scroll over any county in the state to learn about taxes in that specific area.
To find the places with the lowest tax burdens, SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country.
To better compare income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes.
In order to determine sales tax burden, we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a county by the household income after taxes. This balance is then multiplied by 35% to estimate the sales tax paid.For property taxes, we compared the median property taxes paid in each county.
For fuel taxes, we first distributed statewide vehicle miles traveled to the county level using the number of vehicles in each county. We then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, we calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax.
We then added the dollar amount for income, sales, property and fuel taxes to calculate a total tax burden. Finally, each county was ranked and indexed, on a scale of 0 to100. The county with the lowest tax burden received a score of 100 and the remaining counties in the study were scored based on how closely their tax burden compares.