What taxes apply to a new small business?

Taxes Applicable to New Small Businesses in Alaska

When starting a small business in Alaska, understanding the tax obligations is crucial for smooth operations and compliance. Alaska has a unique tax environment compared to other states, which can impact your business planning.

State-Level Taxes for Small Businesses

• No State Sales Tax: Alaska does not impose a state sales tax. However, some local jurisdictions levy local sales taxes. Check the local borough or city regulations where your business operates to determine if you must collect and remit local sales tax.
• No State Income Tax: Alaska does not have a state-level individual or corporate income tax, which can simplify tax filing for many businesses.
• Corporate Income Tax: While Alaska does not have a general corporate income tax, it does tax certain oil and gas businesses specifically. Most small businesses are not subject to this tax.
• Employment Taxes: If you hire employees, you must comply with federal employment taxes and register for Alaska’s unemployment insurance tax through the Alaska Department of Labor and Workforce Development.

Local Taxes and Business Licensing

Because local governments in Alaska may impose their own sales taxes, it is operationally important to:

• Research local tax rates and registration requirements in your business location.
• Register your business with local tax authorities if required.
• Maintain accurate bookkeeping to track taxable sales and remit taxes on time.

Other Tax Considerations

• Federal Taxes: All businesses must comply with federal tax obligations, including income tax, payroll taxes, and self-employment tax if applicable.
• Recordkeeping: Maintain detailed financial records to support tax filings and reporting requirements.
• Tax Automation: Consider using accounting software to automate tax calculations, filings, and payments to reduce errors and save time.

As of 2026, regularly check with the Alaska Department of Revenue and local tax offices to stay updated on any changes in tax policies affecting your small business.