Should you collect sales tax in Alaska?
Sales tax is levied on retail sales of tangible personal property to customers, including leasing or renting. Although Alaska doesn’t have any state sales tax, you will collect the sales tax if your local jurisdiction has opted for the Alaska Remote Seller Sales Tax Code and you determine the nexus in Alaska. A nexus is a presence that may come physically or economically.
Physical nexus is typically created when your business has a store, warehouse, or office location in Alaska. Economic nexus is intertwined when you cross paths with threshold limits already stipulated by the state. These thresholds are based on revenue or another transactional basis.
Let’s explore if your business has a Physical nexus in Alaska.
A physical nexus is integrated when your business is engaged in the following in Alaska:
- Servicing tangible personal property in Alaska.
- Maintaining, occupying, or using a place of business or an office in Alaska.
- Employing or retaining any contractor, including an agent, representative, or salesman, by whatever name called, engaged in activities relating to selling, delivering, installing, or taking business orders.
- Having a stock of goods in Alaska.
Is it constituting an Economic nexus in Alaska?
Suppose you are a remote seller (i.e., one who doesn’t have a physical presence in the state), and your business sales in Alaska exceed $100,000 or make 200 or more transactions during the current or previous calendar year. In that case, you must comply with and register under sales tax rules.
You may also refer to the Alaska Revenue Department advisory to know more about business activities that may create an economic nexus within the state.
How can you Register for Sales tax in Alaska?
As there is no state-wide sales tax in Alaska, you are not required to register separately for each taxable jurisdiction. A single registration on the Alaska Remote Seller Sales Tax Commission would suffice. You need to apply online for a sales tax permit in Alaska.
Additionally, before applying for a new tax account number, make sure you have the following information handy:
- Business Name.
- FEIN and Social Security numbers of all officers, partners, or owners.
- Address details (physical and mailing).
- Business incorporation dates in Alaska.
- Contact information.
- Nature of business.
Is your product or services liable to Sales tax in Alaska ?
Tangible Property: Sales tax in Colorado is imposed primarily on the retail sale of tangible personal property, such as Furniture, giftware, toys, etc.
Services, Digital Products and SAAS: To know what is covered under sales tax, please check with your respective local municipality.
The respective municipality will also guide you on the sales tax exemptions, if any. Refer to the official Alaska website for more details.
Visit the Alaska website to know local sales tax rates for all municipalities.
Below is the simple formula you can use to calculate your sales tax collection on each merchandise sold:
Sales Tax collectable = Sale value * (local tax rate)
How should you file sales tax in Alaska?
E-file: You can file your return online from their e-filing portal.
To file your return, you must get the form from the local municipality where you conducted your business and owe the tax.
You can also remit the sales tax through their online portal.
Filing frequencies and due dates
You need to file the sales tax return according to the due dates specified by the local jurisdiction. Kindly contact your local authorities for sales tax deadlines. These frequencies can be Monthly, Quarterly, or Annual.
Depending on your filing frequency, you must file the sales tax by the last day of the following month.
Note: If the due date is a holiday or weekend, the next business day would be considered the final due date.
Are there any fines or penalties for default when filing or paying sales tax?
If you fail to file or pay the sales tax within the due dates, the state levies a penalty of 5% of sales tax for each month of default, not to exceed 20% in total. An interest of up to 15% of the tax due can also be levied.
See what the Alaska Revenue Department says about penalties and fines (section 29.45.250).
However, assigning your tax burden to TaxDo would not result in you paying any penalty or interest. We will adhere to the due dates.