Alaska - Taxation



The large sums generated by the sale of oil leases and by oil and gas royalties make Alaska's tax structure highly atypical, and its revenues dependent upon the market price of fuels. To smooth out fluctuations due to oil price changes, the Constitutional Budget Reserve Fund was set up. There is no state sales tax or personal income tax in Alaska, but some localities impose a sales tax, as well as a property tax. The corporate tax rate in 2000 ranged from 1% on the first $10,000 of taxable income to 9.4% on amounts over $90,000. Selective sales taxes (excises) are imposed on tobacco products, motor fuels, insurance premiums, alcoholic beverages, public utilities and amusements. The state property tax excludes the first $150, 000 for owners over 65. Only 25 of Alaska's 161 municipalities collect local property taxes. There is no death tax, and Alaska's estate tax is tied to the federal tax exemption for state estate taxes, and is therefore scheduled to be phase out in tandem with the exemption by 2007. Other taxes include various license and franchise fees, but there is no fee for vehicle operating licenses. There are also no documentary and stock transfer taxes. The most unique feature about Alaska's state taxes is that over half ($552 million in 2002 amounting to 50.6% of total state tax collections) come from severance taxes, a very minor source of revenue in most states. Alaska is the only state that has neither a state sales tax nor a state personal income tax. Corporate income taxes make an unusually high contribution, amounting to almost 25% in 2002. Excise taxes accounted for 13%, license fees for 6.8% and property taxes for 4.5%. In all, Alaska has the lowest combined state and local tax burden in the country, 5.5% of income in 2003, compared to the national average of 9.7%.

The following table from the US Census Bureau provides a summary of taxes collected by the state in 2002.

Alaska

  ($000) PER CAPITA
Total Taxes 1,089,504 1,692.34
Property taxes 49,652 77.13
Sales and gross receipts 142,050 220.65
General sales and gross receipts (X) (X)
Selective sales taxes 142,050 220.65
Alcoholic beverage 12,889 20.02
Amusements 2,537 3.94
Insurance Premiums 37,323 57.97
Motor fuels 40,352 62.68
Pari-mutuels (X) (X)
Public utilities 3,139 4.88
Tobacco products 45,810 71.16
Other selective sales (X) (X)
Licenses 74,119 115.13
Alcoholic beverages 1,523 2.37
Amusements 1 0
Corporation 1,281 1.99
Hunting and fishing 20,351 31.61
Motor vehicle 37,304 57.94
Motor vehicle operators (X) (X)
Public utility 232 0.36
Occupation and business, NEC 11,137 17.3
Other 2,290 3.56
Other taxes 823,683 1,279.44
Individual income (X) (X)
Corporation net income 269,273 418.26
Death and gift 3,117 4.84
Documentary and stock transfer (X) (X)
Severance 551,293 856.33
Other (X) (X)


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