Alaska Tax Relief Options for State Tax Debt

Owe Alaska state taxes or received a notice from the Alaska Department of Revenue, Tax Division? Do not guess your next move. Alaska has no personal income tax or state sales tax, but it does levy a corporate income tax, an oil and gas production tax, and numerous other state taxes. We review your Alaska tax balance, notice, deadline, payment options, and collection risk so you know what to do next — as part of the same tax relief and tax preparation support we offer to individuals and businesses working through IRS tax debt across the country.

No guarantee of outcome. We will tell you if settlement is not realistic. A review by phone: (888) 260-9441
Reviewed by William McLee, Enrolled Agent
Last reviewed: June 27, 2026
Reviews content for accuracy against official sources. About our review process
Received a tax assessment, Notice of Distraint, bank levy, lien filing, or corporate tax notice from Alaska?
These are not normal bills.
Deadlines and collection risk matter.
Speak with a tax relief specialist: (888) 260-9441

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Alaska Tax Relief Overview

Owing Alaska state taxes is different from owing the IRS or most other states. The Alaska Department of Revenue, Tax Division, has its own rules, deadlines, and collection tools, separate from federal tax matters and IRS tax debt relief. Unlike most states, Alaska has neither a personal income tax nor a statewide sales tax. Its tax system focuses on corporate income tax, oil and gas production tax, and various excise taxes.

Key Facts About Alaska's Tax System

  • No personal income tax — Repealed in 1980. No state withholding required for wages or payroll.
  • No statewide sales tax — But many Alaska municipalities levy local sales taxes; rates and rules vary by jurisdiction, season, and tax type.
  • Has an Offer in Compromise program — Alaska allows tax compromise with Attorney General approval (AS 43.05.070).
  • 6-year collection statute of limitations — Collection must generally begin within 6 years of assessment (AS 43.05.270).
  • 3-year assessment statute of limitations — Most Alaska taxes must be assessed within 3 years of filing (AS 43.05.260), though some taxes have different rules — for example, oil and gas production tax assessments follow a separate 6-year rule under AS 43.55.075.
  • Interest — Charged under a formula tied to the Federal Reserve rate, compounded quarterly (AS 43.05.225).

Depending on your tax situation, you may need one or more of the following:

  • An Offer in Compromise to settle for less than you owe
  • A payment plan (installment agreement) to pay over time
  • An appeal if you received an assessment you disagree with
  • Penalty relief if penalties make the balance difficult to pay
  • Lien resolution or levy help if collection action has started
  • Filing help if you have unfiled Alaska tax returns

If you operate an Alaska business, local sales tax obligations in municipalities like Anchorage, Juneau, Fairbanks, and others are separate from state-level taxes and carry their own enforcement rules.

Alaska Tax Relief Options at a Glance

Option What It Does Best For Key Deadline
Offer in Compromise Settle tax debt for less than the full amount Cannot pay in full; doubt as to liability or collectibility Apply before the collection statute of limitations expires
Payment Plan Pay the balance over time via installments Can afford monthly payments Contact DOR before enforced collection
Penalty Relief Request a compromise of penalties for cause Penalties are large; had reasonable cause Request with an AG-approved compromise
Appeal Challenge the assessment through informal or further review You disagree with the amount owed and have proof 60 days for informal conference
Lien Resolution Address or release a tax lien on property Lien filed or threatened against property None — request after resolution
Levy/Garnishment Help Respond to a bank levy or wage garnishment Bank account frozen or wages being garnished Act immediately

What Alaska Tax Notice Did You Receive?

Select your notice type for a quick explanation of what it means and your options.

Not Sure Where to Start?

We can review your Alaska tax notice, balance, and deadlines — and explain your options in plain English. Call (888) 260-9441 or request a free review. We will tell you if settlement is not realistic.

No pressure. No guarantee. Just a clear review of your options.

What the Alaska Department of Revenue Can Do to Collect

If you owe Alaska state taxes and do not address the balance, the tax division has a range of collection tools. Not every case reaches the most serious actions, but the longer a balance goes unpaid, the more options the state may use.

Add Penalties and Interest
Late filing, late payment, and fraud penalties can add substantially to your balance. Interest, calculated under the Federal Reserve–linked formula in AS 43.05.225 and compounded quarterly, continues to accrue until the liability is paid in full or otherwise resolved, for example, through an approved compromise agreement. Penalty relief may be available through compromise for cause shown.
Send Collection Notices
The Tax Division sends a series of notices before taking enforced collection action. Ignoring these notices can lead to more serious consequences. The assessment notice triggers a 60-day deadline to request an informal conference.
Issue a Notice of Assessment
If returns are not filed or taxes remain unpaid, the Tax Division may issue a Notice of Assessment. This is a formal determination of the amount owed and triggers a 60-day deadline to request an informal conference under AS 43.05.240.
Offset State Payments
Alaska may offset state payments due to the taxpayer, including Permanent Fund Dividends (PFDs), against outstanding state tax debts.
File a Tax Lien
Under AS 43.05.250, unpaid taxes create a lien on the taxpayer's property and on the taxpayer's rights to property. The lien is enforced by foreclosure and remains until the liability is satisfied or becomes unenforceable by lapse of time (generally 6 years).
Distraint and Sale of Property
Under AS 43.20.270, the department may collect taxes by distraint (levy) and sale of property. The taxpayer has 10 days after notice to pay before levy. Bank levies are executed through an "Order to Withhold."

Alaska Offer in Compromise (OIC)

Alaska has an offer-in-compromise program. Unlike many states, Alaska allows taxpayers to settle tax liabilities for less than the full amount under AS 43.05.070. This is one of the most important advantages for Alaska taxpayers facing tax debt that they cannot pay in full.

Alaska OIC Is Available — But Attorney General Approval Is Required

The Alaska Department of Revenue may compromise a tax liability with the Attorney General's approval. The AG reviews the degree of doubt and the reasonableness of the proposed resolution.

Grounds for an Alaska Offer in Compromise

Alaska's compromise statute (AS 43.05.070) expressly refers to two grounds for compromising the tax itself:

  • Doubt as to liability — There is a genuine dispute about whether the tax is legally owed
  • Doubt as to collectibility — The taxpayer's assets and income are insufficient to pay the full liability

Penalty Compromise

Under AS 43.05.070(b), the Department may also compromise penalties "for cause shown" with Attorney General approval. This is separate from the underlying tax compromise and requires its own showing of cause.

Important Restrictions

  • Attorney General approval is required for all compromises — no exceptions
  • AS 43.05.075 prohibits concealing or falsifying evidence in connection with a compromise
  • The Alaska OIC process is narrower in scope than the federal IRS Offer in Compromise program
  • We did not identify a standardized public OIC application form on the Alaska Tax Division's corporate forms page

See If an Alaska Offer in Compromise Makes Sense

An Alaska OIC may help if you cannot pay your full state tax debt and have doubt as to liability or collectibility. The right move depends on your balance, tax type, income, assets, and whether collection has already started. We will tell you if settlement is not realistic.

No guarantee of approval. AG approval required. DOR makes the final decision.

Alaska Tax Payment Plans

If you cannot pay your Alaska state tax balance in full, a payment plan (installment agreement) may be an option. Alaska DOR allows installment agreements that let taxpayers pay over time rather than in a single lump sum.

How Alaska Payment Plans Work

Requirement Details
How to Apply Contact the Tax Division Collections Section directly. No standardized public application form is available online.
Collection SOL Extension A written payment agreement extends the collection period under AS 43.05.270(a)(2).
Payment Methods Bank drafts, checks, cashier's checks, money orders, bank/wire transfers, and credit cards per AS 43.05.250(b)-(c).
Large Payments Payments of $100,000+ or returns of $150,000+ must be made online or by wire transfer.
Online Payments The Revenue Online system is available for payments.
Current Filing All required returns must be filed and current taxes paid on time while the plan is in effect.
Interest Interest under AS 43.05.225 continues to accrue on the unpaid balance during the plan.
Default Risk Default may result in immediate collection action, including levy and distraint.

See If an Alaska Payment Plan Makes Sense

An Alaska payment plan may help if you cannot pay in full, but approval is not automatic. The right move depends on your balance, notice status, income, assets, and whether collection has already started.

No guarantee of approval. DOR makes the final decision.

Which Alaska Tax Relief Option Fits Your Situation?

Option Best If Deadline Cost
Offer in Compromise You cannot pay the full balance and have doubts as to liability or collectibility Apply before the collection statute of limitations expires No filing fee
Payment Plan You can't pay in full, but you can afford monthly payments Contact DOR before enforced collection begins No fee; interest continues
Penalty Relief Penalties make the balance difficult to pay, and you have a cause that requires AG approval Submit with a compromise request No fee
Appeal You disagree with the assessment and have evidence 60 days for informal conference No filing fee
Lien / Levy Help A lien has been filed, or your bank account/wages are being levied Act immediately — 10 days after notice for distraint May require full payment or compromise

Alaska Corporate Income Tax

Alaska levies a corporate income tax under AS 43.20 (Alaska Net Income Tax Act). The tax applies to corporations doing business in Alaska, including C-corporations and certain other entities. S-corps and most LLCs pass through to the federal return and are not taxed at the entity level in Alaska.

Alaska Corporate Income Tax Rate Schedule (2024)

Taxable Income Tax Rate
$0 – $25,000 0%
$25,000 – $49,000 2% of taxable income over $25,000
$49,000 – $74,000 $480 + 3% of taxable income over $49,000
$74,000 – $99,000 $1,230 + 4% of taxable income over $74,000
$99,000 – $124,000 $2,230 + 5% of taxable income over $99,000
$124,000 – $148,000 $3,480 + 6% of taxable income over $124,000
$148,000 – $173,000 $4,920 + 7% of taxable income over $148,000
$173,000 – $198,000 $6,670 + 8% of taxable income over $173,000
$198,000 – $222,000 $8,670 + 9% of taxable income over $198,000
Over $222,000 9.4% of taxable income

Key Corporate Tax Facts

  • Tax base: Alaska taxable income based on federal taxable income with Alaska adjustments
  • Apportionment: Multistate corporations use property, payroll, and sales factors (water's edge) under AS 43.19
  • Oil & gas apportionment: Modified formula applied to worldwide income
  • Return due: 30 days after the federal return due date (automatic extension if a federal extension is filed)
  • Payment due: 15th day of the 4th month after the close of the tax year
  • Estimated payments: Quarterly estimated payments required
  • Electronic payment threshold: Estimated payments of $100,000+ or payments with a return of $150,000+ must be made online or by wire transfer

Alaska Oil & Gas Production Tax

The oil and gas production tax is Alaska's largest single revenue source. Administered under AS 43.55, this tax applies to oil and gas produced in Alaska and is a major focus of state tax enforcement. Note that oil and gas production tax also follows its own assessment timeline under AS 43.55.075, separate from the general 3-year rule that applies to most other Alaska taxes.

Oil & Gas Tax Debt Is High-Stakes

Oil and gas production tax assessments can reach into the millions of dollars. The Alaska Department of Revenue maintains specialized audit and enforcement teams for this tax. If you have received an oil and gas production tax assessment, appeal deadlines and collection risk are serious.

Current Tax Rates

Commodity Tax Base Rate
Oil Net value (gross value less qualified lease expenditures) 35% of net value (SB 21 / MAPA, 2013)
Natural Gas Gross value at point of production 13% (effective January 1, 2022)

Additional Elements

  • Progressive minimum tax (oil): 4%, 3%, 2%, 1%, or 0% of gross value based on the average price per barrel of ANS crude, for leases north of 68 degrees
  • Cook Inlet cap: $1 per barrel for oil produced in Cook Inlet
  • Conservation surcharge: 1 cent per barrel if the Hazardous Release Fund is under $50M; an additional 4 cents per barrel under AS 43.55.300
  • Monthly reports due: End of the month following the month of activity
  • Annual returns due: March 31 of the year following the year of activity

Tax Credit Programs

Alaska offers several tax credit programs under AS 43.55 that can offset production tax liability, including:

  • Qualified capital expenditure credit (AS 43.55.023(a))
  • Well lease expenditure credit (AS 43.55.023(l))
  • Transferable tax credit certificate (AS 43.55.023(d))
  • Small producer credit (AS 43.55.024(c))
  • Per-taxable-barrel credit (AS 43.55.024(i))
  • Sliding scale credit (AS 43.55.024(j))
  • Cash purchases of tax credit certificates (AS 43.55.028)

Alaska Local / Municipal Sales Tax

While Alaska has no state-level sales tax, many municipalities across Alaska impose their own local sales taxes. Rates and rules vary by jurisdiction, and in some cases by season or product type, so it's important to check the specific municipality and borough that applies to your business or transaction.

Sample Municipal Sales Tax Rates

Municipality Sales Tax Rate
Juneau 5%
Sitka 6%
Ketchikan 5.5%
Kodiak 7%
Kenai (City of Kenai) 3% (plus Kenai Peninsula Borough: 3%)
Homer (City of Homer) 4.85% (plus Kenai Peninsula Borough: 3%)
Wasilla 2.5%

These figures can combine city and borough rates, so always confirm current, jurisdiction-specific rates before filing or remitting.

Remote Seller Nexus

Remote sellers with $100,000 or more in gross statewide sales have economic nexus and must register with the Alaska Remote Seller Sales Tax Commission (ARSSTC). This threshold applies to combined sales across all Alaska municipalities.

Local Tax Enforcement

  • Municipalities may create, record, and notice liens on real and personal property for delinquent sales tax under AS 29.45.650(e)
  • Interest on delinquent municipal taxes can be up to 15% per year
  • Penalties can be up to 20% of the tax due
  • Delinquent real property tax liens may be foreclosed under AS 29.45.320

Alaska Tax Statute of Limitations

Alaska has specific time limits for both assessment and collection of state taxes. These statutes are critical for determining your rights and options.

Assessment Limitations (AS 43.05.260)

Rule Period
General rule Tax must be assessed within 3 years after the return was filed
Fraudulent return/intent to evade No limit — assessment at any time
Failure to file a return No limit — assessment at any time
Written consent extension Period extended by agreement between the taxpayer and the department
Oil and gas production tax Follows its own assessment rule under AS 43.55.075, separate from the general 3-year period

Collection Limitations (AS 43.05.270)

Rule Period
General rule Collection by levy or court proceeding must begin within 6 years after the assessment
Written agreement extension The period may be extended by written agreement before expiration
Lien enforcement Action to enforce a lien must be commenced within 6 years after the lien arises (AS 43.20.250)

Important: Payment Plans Extend the SOL

Entering into a written payment agreement with the Alaska Department of Revenue extends the collection statute of limitations. This means the clock stops running while the agreement is in effect. Make sure you understand this before signing any payment agreement.

Alaska Penalties and Interest

Understanding Alaska's penalty and interest structure is critical for managing state tax debt. Interest and penalties can substantially increase the amount owed over time.

Interest on Delinquent Taxes

Under AS 43.05.225, Alaska charges interest on delinquent taxes at 5.25 percentage points above the 12th Federal Reserve District rate, compounded quarterly. Because this rate is tied to the Federal Reserve rate, it changes over time — charitable gaming fees are the exception, carrying a flat 12% per year rate. Interest continues to accrue until the tax liability is paid in full or otherwise resolved, such as through an approved compromise agreement.

Penalties

Penalty Type Statute Amount
Late filing / late payment AS 43.05.220(a) 5% of the tax due for each 30-day period or fraction of a period the return or payment is late, up to a maximum of 25%, unless the taxpayer shows reasonable cause and the failure was not due to willful neglect
Civil fraud penalty AS 43.05.220(c) 50% of the tax due, or $500, whichever is greater

Penalty Compromise (Relief)

Alaska does not have a codified "reasonable cause" penalty abatement procedure equivalent to the IRS's First-Time Abatement program. However:

  • Under AS 43.05.070(b), penalties may be compromised "for cause shown" with Attorney General approval
  • Requests should be submitted in writing to the Tax Division with supporting documentation
  • The burden of proving cause is on the taxpayer
  • Approval is discretionary — no guarantee of penalty relief

Alaska Tax Appeals Process

After an informal conference, Alaska taxpayers who disagree with an assessment may have administrative and/or judicial review options, depending on the issue and the statute involved. The process is not a single fixed ladder — it depends on your situation, so understanding the deadlines that apply to you matters.

60-Day Deadline for Informal Conference

You generally have 60 days after the mailing date of the notice of assessment to request an informal conference under AS 43.05.240. Missing this deadline can severely limit your ability to challenge the assessment. Do not wait.

Informal Conference (AS 43.05.240)

  • Deadline: 60 days after the date of mailing of the notice of assessment
  • Process: Conference with an appeals officer; the taxpayer is given access to the file and may present arguments and evidence
  • Cost: No fee

Administrative Appeal (AS 43.05.241)

  • Deadline: No later than 30 days after service of the informal conference decision
  • Venue: Alaska Office of Administrative Hearings
  • Process: Formal administrative hearing process, as set out in AS 43.05.241

Judicial Appeal (AS 43.05.242)

  • Venue: Alaska Superior Court, with further appeal possible to the Alaska Supreme Court
  • Purpose: Provides a separate route for challenging the validity of a tax, subject to its own procedural requirements

Payment Required Before Appeal

Under AS 43.05.244, the taxpayer must generally pay the non-disputed amount and post a bond or letter of credit for the disputed amount (or show ability to pay) before proceeding with certain appeals.

Administrative Review Today

Administrative appeals under AS 43.05.241 are handled by the Alaska Office of Administrative Hearings. If you received an Alaska tax assessment, confirm the current venue and deadlines that apply to your specific tax type before filing, as procedures can vary depending on the tax type.

Review My Alaska Tax Assessment

If you received an Alaska tax assessment, review the 60-day deadline for requesting an informal conference before doing anything else. Missing an appeal deadline can limit your options.

This is not legal advice. Consult a qualified representative for your specific situation.

Alaska Tax Liens

A tax lien is a legal claim against your property for unpaid state taxes. In Alaska, liens are created by statute and can have serious consequences for your property rights and credit.

How Alaska Tax Liens Work

  • Statutory basis: AS 43.05.250 — taxes create a lien on the property and rights to property of the taxpayer
  • Enforcement: By foreclosure under AS 09.45.170 – 09.45.220
  • Duration: An action to enforce a lien must be commenced within 6 years after the lien arises (AS 43.20.250)
  • Release: The lien remains until the tax liability is satisfied, released, or becomes unenforceable by lapse of time
  • Municipal liens: Under AS 29.45.650(e), boroughs may create, record, and notice liens on real and personal property for delinquent local sales tax

What Property Is Subject to Lien?

Alaska tax liens attach to all property and rights to property of the taxpayer, including property acquired after the lien arises. This can include real estate, personal property, bank accounts, and business assets.

Alaska Bank Levy / Distraint and Sale

Alaska uses distraint and sale as its primary enforcement tools. This allows the Tax Division to seize and sell property to satisfy tax debts. Bank levies are executed through an "Order to Withhold."

Key Facts About Alaska Levies

  • Notice period: The taxpayer has 10 days after mailing of notice and demand to pay before levy (AS 43.20.270)
  • Who can levy: A deputy or agent of the department
  • Sale method: Public auction at not less than the fair minimum price; the agent may purchase for the state if no adequate bid is received
  • Notice of sale: Must be published; the sale occurs at least 10 days, but no more than 60 days, from notification

Exempt Property from Levy

Under Alaska law, certain property is exempt from distraint and levy, including:

  • Schoolbooks and necessary wearing apparel
  • Arms for personal use
  • One cow, two hogs, five sheep, and their wool (maximum $50 aggregate value)
  • Necessary food for exempt animals (30 days)
  • Fuel up to $25
  • Provisions up to $50
  • Household furniture up to $300
  • Books, tools, and implements of trade/profession up to $100

If your account has been levied, act quickly. A levy may be lifted or modified in certain situations, but the timeline is tight. No guarantee of release.

Alaska Wage Garnishment for Tax Debt

In addition to bank levies, Alaska may garnish wages to collect unpaid state taxes. Wage garnishment means money is taken directly from your paycheck before you receive it.

How Alaska Wage Garnishment Works

  • Alaska DOR may issue wage garnishment orders to employers
  • Employers are required by law to comply with garnishment orders
  • Garnishment remains in effect until the total liability has been withheld and remitted
  • Multiple types of income may be garnished, including wages, salaries, bonuses, and commissions

Wage Garnishment vs. Bank Levy (Order to Withhold)

Feature Wage Garnishment Bank Levy (Order to Withhold)
Target Your paycheck Your bank account
Amount Portion of each paycheck until paid Full account balance (up to the liability)
Duration Continues each pay period until paid One-time at the time of service
Notice to Employer/Bank Employers must comply with the law The bank must comply with the law

If you have received a notice about garnishment or an intent to garnish, do not ignore it. Once garnishment starts, the money is taken before you receive your paycheck.

Get Help With an Alaska Collection Notice

If Alaska has filed a lien, issued an Order to Withhold, started wage garnishment, or sent a serious collection notice, waiting usually makes the problem worse. Get the notice reviewed before you make random payments or ignore the deadline.

No guarantee of outcome. We review your facts and explain your options. We will tell you if settlement is not realistic. Call (888) 260-9441

Unfiled Alaska Tax Returns

If you have not filed Alaska tax returns for one or more years, that can block most resolution options. The Alaska Tax Division may estimate your tax and issue assessments based on those estimates — sometimes higher than what you actually owe.

Filing accurate returns can sometimes reduce an incorrect balance. But do not rush or file incomplete returns. It is better to have returns prepared correctly, with the right income, deductions, and Alaska-specific adjustments.

Why Filing Matters

  • Unfiled returns can block the payment plan and OIC eligibility
  • The Tax Division may issue substitute returns with a higher tax than you actually owe
  • Penalty relief generally requires all returns to be filed
  • The 3-year assessment statute of limitations does not begin until a return is filed
  • No statute of limitations applies if no return is filed — assessment can happen at any time

If you're an Alaska resident who also needs help catching up on federal filings, free resources such as Volunteer Income Tax Assistance (VITA) sites, which operate in Anchorage and other communities across Alaska, and organizations like the Alaska Business Development Center (ABDC) provide free tax preparation and business tax support for qualifying individuals and small business owners.

Other Alaska State Taxes

In addition to corporate income tax and oil & gas production tax, Alaska collects a variety of other taxes and fees. Each has its own rules, rates, and enforcement procedures.

  • Alcoholic Beverage Tax — Tax on the manufacture, sale, or distribution of alcoholic beverages in Alaska.
  • Charitable Gaming Tax — Tax on charitable gaming activities. Interest on delinquent fees is a flat 12% per year.
  • Commercial Passenger Vessel Excise Tax — $34.50 per passenger on large cruise ships visiting Alaska ports.
  • Fisheries Business Tax — Tax on fishing and fisheries businesses under AS 43.75, including seafood marketing assessments.
  • Marijuana Tax — Tax on cultivation and sale of marijuana under AS 43.61.
  • Mining License Tax — License tax on mining operations in Alaska under AS 43.65.
  • Motor Fuel Tax — Tax on motor fuel sold or used in Alaska.
  • Oil & Gas Property Tax — Property tax on oil and gas exploration and production property under AS 43.56.
  • Tobacco Tax — Excise tax on tobacco products sold in Alaska.
  • Vehicle Rental Tax — Tax on the rental of passenger vehicles in Alaska.

Taxes Alaska Does NOT Have

  • No state personal income tax (repealed in 1980)
  • No state sales or use tax
  • No estate tax

Alaska Permanent Fund Dividend (PFD) and Tax Offsets

Alaska residents may receive an annual Permanent Fund Dividend (PFD) — a share of the state's oil royalties. The PFD is taxable for federal income tax purposes (reported on Form 1040 Schedule 1) but is not taxed by Alaska, since Alaska has no state income tax.

Important: The State of Alaska may offset your PFD against unpaid state tax debts. If you owe Alaska state taxes, your PFD may be intercepted and applied to your balance. The PFD amount changes each year — for example, the 2024 PFD was $1,702 per eligible resident, while the 2025 PFD was $1,000 per eligible resident.

Alaska Tax Relief Tools & Calculators

Use our Alaska calculators to estimate penalties, interest, or collection risk. Then request a review if the numbers show the balance is growing or collection is already active.

Alaska Tax Penalty & Interest Calculator
Estimate how much penalties and interest have added to your balance under AS 43.05.225 and AS 43.05.220.
Open Calculator →
Alaska Corporate Tax Penalty Calculator
Estimate penalties and interest for Alaska corporate income tax debts.
Alaska Collection SOL Calculator
Calculate the remaining time on Alaska's collection statute of limitations.
Alaska Revenue Online
Access your Alaska tax account online to view balances, make payments, and manage your account.
Alaska Revenue Online →
Alaska Tax Forms
Find Alaska state tax forms from the official DOR website.
DOR Forms →
Alaska Remote Seller Sales Tax Commission
Register and file municipal sales taxes if you are a remote seller with $100K+ in Alaska sales.
ARSSTC →

Alaska Government Resources

These are official Alaska sources for tax information, payment plans, appeals, and rules. Always check the official source for the most current information.

Not Sure What to Do With Your Alaska Tax Situation?

Select the card that matches your situation to jump to the relevant section.

  • Received a Tax Assessment — Review the 60-day deadline for requesting an informal conference first. Do not let the deadline pass.
  • Cannot Pay in Full — Review payment plan options or consider an offer in compromise. Alaska has an OIC program with AG approval.
  • Penalties Are the Main Issue — Alaska allows a penalty compromise "for cause shown" with the Attorney General's approval under AS 43.05.070(b).
  • Lien, Levy, or Garnishment Started — Act immediately. You generally have 10 days after notice before distraint/levy. Bank levies use an "Order to Withhold."
  • Corporate Income Tax Debt — Alaska's corporate tax ranges from 0% to 9.4%. Understand your rate, apportionment, and filing obligations.
  • Oil & Gas Production Tax Debt — At 35% of net oil value, this is Alaska's largest revenue source, with specialized enforcement.
  • Local/Municipal Sales Tax Debt — Many Alaska municipalities impose local sales taxes, each with its own enforcement rules and lien powers.
  • Unfiled Tax Returns — Unfiled returns block most resolution options and have no statute of limitations. File accurate returns first.

Frequently Asked Questions

Does Alaska have a state income tax?

No. Alaska does not have a state personal income tax. It was repealed in 1980, after the Trans-Alaska Pipeline began producing oil revenue. Alaska is one of the few states without a personal income tax, so there is no state income tax withholding on wages. Alaska, however, levies a corporate income tax under AS 43.20 on C corporations and certain other entities.

Does Alaska have a state sales tax?

No. Alaska has no statewide sales tax. However, many municipalities impose local sales taxes, and rates vary by jurisdiction — for example, Juneau (5%), Sitka (6%), Ketchikan (5.5%), Kodiak (7%), Kenai (city rate of 3%, plus the Kenai Peninsula Borough), and Homer (city rate of 4.85%, plus the Kenai Peninsula Borough). Remote sellers with $100,000 or more in gross statewide sales must register with the Alaska Remote Seller Sales Tax Commission (ARSSTC).

Does Alaska have an Offer in Compromise program?

Yes. Alaska has an Offer in Compromise (OIC) program under AS 43.05.070. The Alaska Department of Revenue may compromise a tax liability with Attorney General approval. Grounds include doubt as to liability or doubt as to collectibility. Penalties may also be compromised "for cause shown" with AG approval under AS 43.05.070(b).

What is Alaska's oil and gas production tax?

Alaska's primary state tax is the oil and gas production tax under AS 43.55. The rate is 35% of the net value of oil (set in 2013 by Senate Bill 21, the More Alaska Production Act). For gas, the rate is 13% of gross value at the point of production (effective January 1, 2022). Net value equals gross value less qualified lease expenditures. A progressive minimum tax of 0-4% of gross value applies based on the average price per barrel of ANS crude.

What is Alaska's corporate income tax rate?

Alaska levies a graduated corporate income tax from 0% to 9.4% across ten brackets. The first $25,000 is taxed at 0%, then rates step up: 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, and 9.4% on income over $222,000. The tax is administered under AS 43.20 (Alaska Net Income Tax Act). S-corps and most LLCs pass through to the federal level only and are not taxed at the entity level.

What is the statute of limitations on Alaska tax collections?

Alaska generally has a 6-year statute of limitations for collection under AS 43.05.270. A collection by levy or court proceeding must begin within 6 years after the assessment. This period may be extended by written agreement before it expires. The assessment limitation period is generally 3 years after the return was filed under AS 43.05.260 (no limit for fraudulent returns or failure to file), though oil and gas production tax follows a separate rule under AS 43.55.075.

Can Alaska garnish wages or levy bank accounts for tax debt?

Yes. Under AS 43.20.270, the Alaska Department of Revenue may collect taxes by distraint and sale of property. The taxpayer has 10 days after mailing of notice and demand to pay before levy. Alaska uses an "Order to Withhold" for bank levies and may also garnish wages. Certain property is exempt from levy, including necessary wearing apparel, household furniture valued at up to $300, tools of trade valued at up to $100, and provisions valued at up to $50.

Can Alaska file a tax lien?

Yes. Under AS 43.05.250, taxes create a lien on the taxpayer's property and rights to property. The lien is enforced by foreclosure under AS 09.45.170-09.45.220. An action to enforce the lien must be commenced within 6 years of its arising (AS 43.20.250). Municipalities may also create, record, and notice liens on real and personal property for local sales taxes under AS 29.45.650(e).

What interest rate does Alaska charge on delinquent taxes?

Under AS 43.05.225, Alaska charges interest at 5.25 percentage points above the 12th Federal Reserve District rate, compounded quarterly. Because this rate moves with the Federal Reserve rate, it's best to check the current published rate rather than rely on a fixed figure. Charitable gaming fees carry a flat 12% per year interest rate.

Can I appeal an Alaska tax assessment?

Yes. You generally have 60 days from the date of the notice of assessment to request an informal conference (AS 43.05.240). Depending on the outcome and the tax involved, you may then have an administrative appeal to the Alaska Office of Administrative Hearings, filed no later than 30 days after service of the informal conference decision (AS 43.05.241), and/or a judicial appeal to the Alaska Superior Court (AS 43.05.242). Taxpayers must generally pay the non-disputed amount and post bond or a letter of credit for the disputed amount before certain appeals (AS 43.05.244).

What other taxes does Alaska collect?

In addition to the oil and gas production tax and corporate income tax, Alaska collects: alcoholic beverage tax, charitable gaming tax, commercial passenger vessel excise tax, fisheries business tax, marijuana tax, mining license tax, motor fuel tax, oil and gas property tax, tobacco tax, and vehicle rental tax. Alaska does not have an estate tax.

Can Alaska use my Permanent Fund Dividend to pay taxes?

Yes. The State of Alaska may offset your Permanent Fund Dividend (PFD) against unpaid state tax debts. The PFD is a share of the state's oil royalties paid to eligible Alaska residents. While it is not taxable in Alaska, it can be intercepted to satisfy state tax liabilities.

Do I need to collect local sales tax in Alaska as a remote seller?

If you have $100,000 or more in gross statewide sales to Alaska customers, you have economic nexus and must register with the Alaska Remote Seller Sales Tax Commission (ARSSTC). You are then responsible for collecting and remitting local sales taxes in the municipalities where your customers are located, at the rate each municipality sets.

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Sources Used

These are the official government sources used for this page. Always check the current official source for the most up-to-date information.

Disclaimer: This page provides general information about Alaska state tax collection procedures and is not legal advice. Tax laws and agency procedures change. Always consult the official Alaska Department of Revenue website or a qualified tax professional for advice specific to your situation. No guarantee of any particular outcome is expressed or implied. Approval for compromises, payment plans, and other resolutions is discretionary.