Don't Mess With Taxes

Alaska gets a chunk of its operating revenue from the federal government, which owns more than half the real estate in America's largest state. But budget concerns have Last Frontier lawmakers again discussing creation of a statewide sales tax. (Photo of Denali peak reflected in Wonder Lake courtesy U.S. National Park Service)

Alaskans face fewer taxes than most other United States taxpayers. It's one of eight states* with no income tax. And while some local jurisdictions collect sales tax, there is no statewide levy on purchases.

But that could change if the Last Frontier's Republican governor gets his way.

Gov. Mike Dunleavy, told member of the Alaska Legislature this week that his long-term state budget plan could include a statewide sales tax.

Bill introduced, but gov following: A bill to create a 2 percent statewide sales tax already had been introduced. Dunleavy indicated "he would be filing some bills of his own. And the bill that he is going to be filing will be a sales tax bill," Speaker of the Alaska House Cathy Tilton (R-Wasilla) told Alaska Public Media.

That was confirmed by state Rep. Will Stapp (R-Fairbanks), who told the public radio news service he believes the governor's tax plan would include some exemptions, such as food and federal food assistance programs, but the new statewide sales tax would apply to services.

Previously, Dunleavy had said that he would not approve new taxes without a statewide vote. Alaska lawmakers who met with the governor said he didn't mention such a referendum in this week's budget talks. "He said that everything is open for discussion," said House Minority Leader Calvin Schrage (I-Anchorage).

The governor's office has officially or publicly responded to the possible state sales tax report. However, a spokesman did say in an email to the news service that "Governor Dunleavy will not support an income tax bill."

Other revenue (re)sources: Although Alaska has no state sales tax or individual income tax, it does have a corporate income tax. It also collects property taxes.

With almost 62 percent of all land in the United States' largest state is federally owned. Alaska gets revenue from Uncle Sam in connection with the leases on that real estate granted by the U.S. Bureau of Land Management (BLM).

Then there's the oil and gas industry, which makes up the largest part of Alaska's economy. Taxes on these fossil fuels are a major revenue source for the state.

As the global energy focus has shifted to renewal alternatives energy and the petroleum industry goes through cyclical collapses, the possibility of a state sales tax has been discussed by lawmakers.

State residents, however, tend to be less welcoming of the tax backup plan. That might be why Dunleavy is backing away a bit from his earlier pledge to abide by a state vote on instituting a sales tax on all Alaskans.

No-income tax states: I know you've been wondering since that first paragraph. So, the *states with no income tax are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

New Hampshire does not collect tax on wages, but it does collect a 5 percent tax on interest and dividend income. This tax, however, is being phased out, and the Granite State is scheduled to fully join the no state income tax club in 2027.

You also might find these items of interest:

• Comparing federal, state and global tax burdens
• State relief payments issued in 2022 are federally tax free
• Some state refund recipients should amend their federal tax returns

Advertisements