Free guide for contractors
Do contractors charge sales tax in Alaska?
General information, not tax advice. Tax rules change and depend on the details of each job. Confirm how they apply to your business with your accountant or the state's revenue department before relying on them.
AK Alaska
Depends on the jobIt depends on the city or borough. Alaska has no state sales tax, but some local governments levy their own.
The State of Alaska does not levy a sales tax. Some municipalities do.
A borough may levy a sales tax on sales, rents and services, grant exemptions by ordinance, and levy a use tax at the same rate. Cities may levy sales and use taxes too, inside or outside a borough, so a city tax and a borough tax can both apply to the same sale.
What is taxable and what is exempt is decided locally. State law spells out some exemptions; the rest are a local matter. So whether construction labor or materials are taxed depends on the code of the municipality where the work is done.
Sales tax forms and returns come from the local municipality where the business was conducted, not from the state.
It turns on: which city or borough the job is in; how that municipality's code treats construction labor and materials.
Watch out for
- A job inside a city that is itself inside a taxing borough can face both taxes (AS 29.45.650; AS 29.45.700).
“The State of Alaska does NOT levy a sales tax.”Alaska DCCED, Office of the State Assessor, Alaska Sales Tax Information