Sales Tax Registration and Filing in Alaska

Introduction

Alaska is unique among U.S. states as it does not impose a state-wide sales tax. However, this does not mean businesses are exempt from sales tax obligations. Local jurisdictions, such as cities and boroughs, have the authority to levy their own sales taxes. This decentralized approach requires businesses operating in Alaska to be aware of and comply with local sales tax regulations. This guide will walk you through the sales tax registration and filing processes in Alaska, highlight state-specific rules, and address frequently asked questions.

Registration Process

Who Needs to Register?

In Alaska, businesses with a physical presence or those meeting the economic nexus threshold must register for sales tax. The economic nexus threshold is defined as having $100,000 in annual gross receipts from sales or 200 or more transactions in the state. If your business meets these criteria, you are required to register and collect sales tax in jurisdictions that have adopted the Alaska Remote Seller Sales Tax Code.

How to Register

1. Determine Your Nexus: Identify if your business has a physical or economic nexus in Alaska. Physical nexus includes having an office, store, or employees in the state.
2. Gather Required Information: Prepare your business details, including:
   • Business name
   • Address
   • Email
   • Phone number
   • Employer Identification Number (EIN)
3. Register Online: Remote sellers can register through the Alaska Remote Sellers Sales Tax Commission (ARSSTC) portal. This registration covers all participating jurisdictions in Alaska.
4. No Registration Fee: There is no cost to apply for a sales tax permit through the ARSSTC portal.

Filing Process

Steps to File Sales Tax

1. Calculate Sales Tax Owed: Use sales data from platforms like Amazon, eBay, Shopify, and others to determine the total sales tax collected. Tools like Cove can simplify this process by providing detailed reports.
2. File a Sales Tax Return: Submit your sales tax return through the ARSSTC portal. Ensure all collected taxes are accurately reported.
3. Make a Payment: Remit the calculated sales tax payment through the ARSSTC's online system.

Filing Deadlines

Sales tax filing deadlines in Alaska vary by jurisdiction. It is crucial to check with each local jurisdiction to understand their specific due dates and ensure timely compliance.

State-Specific Rules

Local Jurisdictions

• Local Sales Tax: While there is no state-wide sales tax, over 100 local jurisdictions in Alaska impose their own sales taxes. Businesses must comply with the sales tax regulations of each jurisdiction where they have nexus.
• Economic Nexus: The Alaska Remote Seller Sales Tax Code requires businesses exceeding the economic nexus threshold to collect and remit sales tax in all participating jurisdictions.
• Exemptions: Tax exemptions are determined at the local level. Businesses should contact local municipalities to understand what items are exempt from sales tax.

FAQs

Do I need to collect sales tax in Alaska if I only sell online?

Yes, if your online sales exceed the economic nexus threshold, you must register and collect sales tax in jurisdictions that have adopted the Alaska Remote Seller Sales Tax Code.

How do I know if a jurisdiction has adopted the sales tax code?

You can find a list of participating jurisdictions on the ARSSTC website.

What happens if I don't meet the economic nexus threshold?

If your business does not meet the economic nexus threshold and has no physical presence in Alaska, you are not required to collect sales tax.

Can I register for sales tax in multiple jurisdictions at once?

Yes, registering through the ARSSTC portal covers all participating jurisdictions, eliminating the need to register with each one individually.

How often do I need to file sales tax returns?

The frequency of filing sales tax returns depends on the specific requirements of each jurisdiction. It is essential to verify the filing frequency with each local jurisdiction where you have sales tax obligations.

Conclusion

Navigating sales tax registration and filing in Alaska requires understanding the local jurisdictional requirements and the economic nexus thresholds. By following the outlined registration and filing processes, businesses can ensure compliance and avoid potential penalties. For further assistance, consider using sales tax automation tools like Cove to streamline the process.