Taxes in Alaska


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One of the most tax-friendly states for retirement, Alaska does not levy income, retirement, or social security taxes. It also boasts a wonderfully low average state and local sales tax.

Below, we explain various state taxes affecting retirement income and your ability to live affordably in Alaska, such as sales tax, retirement tax, and property taxes. We’ve also provided details about tax credits, exemptions, tax relief programs, and retirement-related tax breaks.

For information regarding taxes in other states, see Retirement Taxes by State.

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Alaska Tax Rates 2024

Sales TaxNone
Avg State/Local Sales Tax1.76%
Gas Tax$0.089 per gallon
Diesel Tax$0.089 per gallon
Cigarette Tax$2.00 per pack
Vehicle Rental Tax10% on passenger vehicles; 3% on RVs
Excise Tax$34.50 per commercial voyage w/overnight accommodations
Income TaxNone
Property TaxPartial
Social Security TaxNone
Retirement TaxNone
State Taxes in Alaska

Alaska Tax Rates Explained

Alaska Sales Taxes

Alaska does not collect state sales tax. However, the average ranges from 1.76% to 7.50%, depending on the municipality. Alaska ranks fourth-lowest in the nation for average local sales tax rate compared to other states. The “typical” sales tax rates within Alaska range from 2% to 5%. Other local taxes levied include raw fish taxes, hotel/motel “bed” taxes, and liquor and tobacco taxes.

Alaska Income Taxes

Alaska does not levy a tax on earned or unearned income. Year-round residents are eligible to receive an annual payment from the Alaska Permanent Fund. Residents apply online for the Permanent Fund Dividend (PFD), which recently ranged from $800 to over $2,000. These funds generate a 1099 and are taxable income on federal returns.

Retirement income and military pay are not taxed.

Alaska Property Taxes

Alaska charges no property tax, but larger municipalities like Anchorage typically do. The effective property tax rate is 1.18% on average ($3,136 on a $265,200 home). Municipalities that levy property tax collect between 0.16% and 1.69%.

Homeowners 65 and older are exempt from municipal taxes on the first $150,000 of assessed property value. If the primary homeowner dies, the rule applies to the surviving spouse who is at least 60 years of age.

Veterans with a 50% or more service-connected disability also pay no tax on the first $150,000 of property value.

Alaska Retirement Taxes

Social Security and military pay is exempt. Residents 60 and older can exclude up to $12,500 of pension and other retirement income

Alaska Inheritance and Estate Taxes

There is no state inheritance tax or estate tax in Alaska.

Visit the Alaska State Assessor Office site for more information about state taxes.

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