Alaska: The Last Frontier

Alaska is the northernmost and westernmost state of the United States. It is not connected to any other US state, but borders Canada’s Yukon to the east. The area of ​​over 1.7 million km² makes Alaska the largest state in terms of area. With less than 750,000 inhabitants, the Last Frontier has the fourth lowest population. According to ehuacom, the capital of Alaska is Juneau.

The local economy is heavily influenced by the fact that the state is a border region. High labor and transportation costs, as well as complex environmental and zoning regulations, have long deterred outside investment. Significant infrastructure improvements have significantly reduced the cost of economic transformation.

Alaska Location Map

FDIS IN THE LAST FRONTIER

Global investment is growing Alaska’s economy while creating quality jobs in local communities. Approximately 160 international companies have offices in Alaska. Together they have a good 17,000 employees in the state. This corresponds to 6.7 percent of all permanent employees. Companies from Canada, Great Britain and Japan are responsible for most of the jobs created. Around 40 percent of these jobs are in the processing industry. FDI employment has increased by 20 percent over the past five years, compared to just 3 percent for the entire private sector.

OIL PRODUCTION AS THE KEY TO ECONOMIC SUCCESS

The oil and gas industry accounts for most of Alaska’s economic output. Almost 85 percent of the national budget is financed by oil revenues. The oil and gas industry thus has far-reaching effects on the local economy. According to the Alaska Oil and Gas Association, around a third of jobs are in the oil and gas industry. Either directly or indirectly through jobs that provide goods and services to industry. If current exploration efforts result in new projects, as expected, the oil and gas labor market will expand and with it the Alaskan economy.

Tourism is another important industry for the Last Frontier. The state sees nearly two million visitors a year, half of whom arrive by cruise ship. The number of cruise ships initially fell slightly due to a tax law from 2006. In response, however, the Alaska Senate lowered the tax on cruise ship visitors in 2010 in a bid to bring more business to the state. Tourism as a whole is the second largest private sector employer in the Last Frontier.

The rich fishing waters off Alaska’s coast make it one of the world’s finest sources of wild seafood. 2.7 million tons of it are harvested every year. Alaska is also the world’s largest producer of wild salmon. The unique salmon industry has been certified as “sustainable” by the Marine Stewardship Council. The state consistently leads the US in terms of the value of its fishing industry. Revenues exceed $3 billion annually. Maine was a distant second with harvests worth about $500 million. Depending on the season, the industry can create up to 60,000 jobs, with a monthly average of around 8,000 full-time jobs.

ALASKA INCOME TAX

Alaska does not levy an income tax. However, there are federal income taxes to be paid.

CORPORATE INCOME TAX IN ALASKA

Alaska charges a 9.4% corporate income tax. In addition, federal corporation tax is payable.

SALES TAX IN ALASKA

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales Tax Rate in Alaska

Alaska does not collect sales tax. Municipalities or districts charge an average of 1.76% sales tax.

Alaska Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date :

Varies by district

Transactions included:

Statewide gross sales of goods, real estate, or products shipped into, or services rendered in, the state, including sales through a marketplace

Treatment of tax-exempt transactions:

Exempt Sales and Exempt Services are included in the threshold

Reason:

sales or transactions

Sales/Transactions Threshold:

$100,000 or 200 transactions

Evaluation period:

The threshold applies to sales from the previous calendar year

Extra information:

  • Although Alaska does not have a statewide sales tax, many local governments impose local sales and use taxes. Some therefore also enforce an economic nexus. The Economic Nexus Threshold is based on a remote seller ‘s nationwide sales, not their sales to a specific jurisdiction.
  • Registration Requirements: A remote business must register with the Alaska Remote Seller Sales Tax Commission 30 days after subsequent registration: a municipality’s enactment of the Remote Seller Sales Tax Act; or crossing the economic nexus threshold.
  • Vendors who cross the Economic Nexus threshold but do not sell in Economic Nexus counties do not need to register.
  • Alaska Remote Seller Sales Tax Commission

Alaska Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

Varies by jurisdiction

Economic Nexus Threshold:

At least 200 transactions or more than $100,000 in nationwide gross sales of goods or products in the previous calendar year. When calculating the threshold:

  • Remote sellers should include direct sales and sales through a marketplace
  • Marketplace agents should include all gross sales in the state of Alaska

Registration requirements:

  • Remote Multichannel Sellers : You must register and collect your Alaska sales tax on sales that are not taxed by a marketplace intermediary once you cross the Economic Nexus Threshold. Note: You only need to register if you are selling in counties that enforce Economic Nexus. If you only sell to places with no economic nexus, no registration is required.
  • Remote Marketplace Vendors: You may need to register if you cross the Economic Nexus threshold and sell to Economic Nexus locations. Contact the Alaska Department of Revenue Remote Seller Sales Tax Commission (ARSSTC) for more information.
  • In-State Multichannel Sellers: You must register with the ARSSTC and collect tax on sales that are not taxed by a marketplace intermediary. Note: You only need to register if you are selling into districts that enforce Economic Nexus. If you only sell to places with no economic nexus, no registration is required.
  • US State Marketplace Sellers: You may be required to register for a Sales/Use Tax Account once you cross the Economic Nexus Threshold and sell to Economic Nexus locations. Contact the ARSSTC for more information.