Alaska offers a vibrant environment for business with nearly 75,000 small businesses, employing more than 50% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Alaska is crucial. This guide provides a comprehensive overview of the various taxes small businesses in Alaska must navigate, including tax rates, filing requirements, and deadlines.
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Types of Business Taxes in Alaska
Business owners in Alaska may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
- Corporate Income Tax
- Applicable Entities: C corporations, LLCs with C corp elections (certain small corporations are exempt)
- Tax Rate: 0%–9.4%
- Filing Requirements: File Form 6000 30 days after the federal tax return is due.
- Estimated Payments: Payments are due quarterly on April 15, June 15, September 15, and December 15.
- Employment Security Tax (unemployment)
- Personal Property Tax
- Applicable Entities: Businesses using personal property
- Tax Rate: Based on property type and value
- Filing Requirements: Report annually to the county assessor by November 30 (where applicable).
How to File and Pay Alaska Business Taxes
Business taxes in Alaska can be filed and paid through various methods:
- Online Filing and Payment: Use Alaska Revenue Online for electronic submissions and payments.
- Mail: Send forms and payments to the address indicated (where allowed).
Important Deadlines
Keep track of these key dates to avoid penalties:
- Corporate Income Tax Returns: Due 30 days after the federal tax return is due
- Estimated Tax Payments: Due quarterly on April 15, June 15, September 15, and December 15.
- Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31.
Tax Credits and Incentives
Alaska offers several tax credits and incentives for small businesses, including:
- Alaska Education Tax Credit: Businesses receive a credit for 50% of their charitable donations of cash or equipment for direct instruction, educational support, facilities, or research. The credit is subject to a $1 million cap for donations made before June 27, 2024, and a $3 million cap made for donations on or after that day.
- Alaska Veteran Employment Tax Credit: Businesses that employ an eligible veteran for 1,560 hours or more during the 12 consecutive months after hiring receive a $3,000 credit for a disabled veteran and a $2,000 credit for a non-disabled veteran. Employers receive a $1,000 credit for employing a veteran for an eligible seasonal position.
Note: Alaska taxpayers can claim 18% of all federal incentive credits, except federal credits that refund other federal taxes. Multistate taxpayers apportion their total federal incentive credits.
Alaska’s business tax breakdown by business type
Business taxes can get complicated, so we’ve included a chart that breaks down which taxes different business structures usually pay.
Remember that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
| Business type | Personal income tax | Corporate income tax | Unemployment tax | Federal income taxes |
| C corporation | No | Yes | Yes, if you hire employees | Yes |
| S corporation | No | No | Yes, if you hire employees | Yes (pass-through) |
| LLC | No | Depends on how it’s structured | Yes, if you hire employees | Yes (pass-through) |
| Partnership | No | No | Yes, if you hire employees | Yes (pass-through) |
| Sole proprietorship | No | No | Yes, if you hire employees | Yes, by way of individual income tax |
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Alaska Small Business Taxes: The Employer’s Complete 2023 Guide
If you’re interested in starting a new business, Alaska—which is aptly nicknamed “The Last Frontier”—might be a great place to do so. According to the Tax Foundation, Alaska is the third most tax-friendly state in the United States because it doesn’t impose many of the taxes that businesses and individuals incur in other states.
The Land of the Midnight Sun isn’t completely tax-free though, so read on.
What kind of taxes do businesses have to pay in Alaska?
Alaska doesn’t levy an individual state income tax, state sales tax, franchise tax, business personal property tax, or withholding tax—making this state a great place for small businesses. The only taxes small business owners may be responsible for include the corporate income tax and the unemployment insurance tax, as well as any industry-related and local taxes.
Alaska individual income tax
The state of Alaska doesn’t collect individual income taxes, so sole proprietorships as well as most partnerships and limited liability companies (LLCs) won’t have to pay taxes on their business income.
However, certain business entities—such as LLCs and partnerships with business entities as a member or partner, or LLCs taxed as corporations—may need to file tax returns every year.
Alaska corporate income tax
Alaska taxes corporations that are incorporated in or do business in the state. Some corporations, including S corporations and certain corporations with less than $50 million in assets, are exempt from paying the Alaska corporate income tax.
In 2023, the corporate income tax rate ranges from 0% to 9.4%, based on the organization’s taxable income.
How to pay corporate income tax and file your returns
Corporate tax returns (Form 6000) are due 30 days after your federal corporate tax returns are due, and can be submitted through the Alaska Revenue Online (ROL) platform.
Corporate income tax payments, on the other hand, must be paid by the 15th day of the fourth month after the end of the tax year. Corporations must also make quarterly estimated tax payments, which are due on April 15, June 15, September 15, and December 15.
If your business expects to make an estimated tax payment of $100,000 or more, or if the payment you’re including with your return is $150,000 or more, you must submit payment online on ROL or via wire transfer. Those submitting estimated tax payments by mail must send payment to the following address along with payment voucher Form 6240:
Tax Division
Alaska Department of Revenue
P.O. Box 110420
Juneau, AK 99811-0420
If you have any questions about Alaska’s corporate income tax, read the instructions for Form 6000 or get in touch with the state’s Department of Revenue tax division.
Alaska unemployment insurance tax
Typically known as the unemployment insurance tax in other states, in Alaska it’s called the employment security tax. Alaska businesses with at least one employee must pay this employer tax to fund unemployment benefits for eligible workers who leave the company.
The 2023 tax rate ranges from 1% to 5.4% on the first $47,100 of wages for established businesses. New employers can expect to pay between 1.31% and 1.86%, depending on their industry.
How to pay employment security tax
Every quarter, employers must file contribution reports (Form TQ01) and make unemployment payments to the Alaska Department of Labor. These quarterly reports and payments are due on April 30, July 31, October 31, and January 31. Keep in mind that you’ll have to file reports even if you didn’t pay any wages for the quarter.
Some businesses are required to fulfill these requirements online, while others have the option to file online or by mail.
If you meet any of the following requirements, you must file and pay your employment security tax online:
- Have 50 or more employees in a quarter
- Pay $1 million or more in taxable wages in the current or previous calendar year
- Have a payroll agent report on behalf of your company
The state of Alaska also encourages employers to file online, even if they don’t meet the above requirements. Alternatively, if you want to file by mail, send your reports and payments to:
Alaska Department of Labor and Workforce Development
Juneau Central Office
P.O. Box 115509
Juneau, AK 99811-5509
For more details on the Alaska employment security tax, read the state’s unemployment insurance tax handbook.
Other industry-related and local taxes
Businesses in certain industries may be required to pay taxes on the services they provide or on products like gas, alcohol, and tobacco. Additionally, some local governments collect their own taxes from businesses that operate in their jurisdictions.
For instance, although Alaska doesn’t levy a statewide sales tax, some cities or municipalities choose to impose their own sales tax. With a maximum local sales tax rate of 7.5%, Alaska’s average combined state and local sales tax rate is 1.76%.
For more information on the specific state and local taxes your business is subject to, talk to your accountant or tax advisor.
Alaska business tax breakdown by business type
If you have a business or plan on establishing one in Alaska, here’s what you can expect different types of businesses to pay in federal and state taxes. Keep in mind that pass-through entities don’t pay federal income taxes—owners pay taxes through their personal income tax returns instead.
| Business type | State income taxes | Unemployment insurance tax | Federal taxes |
| C corporation | Yes | Yes, if you hire employees | Yes |
| S corporation | No | Yes, if you hire employees | Yes (pass-through) |
| LLC with C corp election | Yes | Yes, if you hire employees | Yes |
| LLC | No | Yes, if you hire employees | Yes, (pass-through) |
| Partnership | No | Yes, if you hire employees | Yes (pass-through) |
| Sole proprietorship | No | Yes, if you hire employees | Yes, by way of individual income tax |
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