Alaska doesn’t have a statewide sales tax. So for many online sellers don’t even take the state into consideration when it comes to sales tax collection. However, Alaska does allow localities to levy a sales tax.
And that’s why the state now allows local governments to require remote sellers who meet a certain threshold to collect sales tax.
This ordinance is similar to “marketplace facilitator laws” in other states, and means that online marketplaces, such as eBay, are required to collect Alaska’s local sales tax on behalf of third party sellers who sell on the marketplace.
So if you sell on a platform like Amazon, then Amazon will collect sales tax from your Alaska buyers (in applicable jurisdictions) on your behalf, and then remit that tax to the state.
This post will explain what online sellers need to know about the Alaska marketplace facilitator law, and answer your frequently asked questions.
Overview of the Alaska Marketplace Facilitator Law
Alaska’s marketplace facilitator law states that marketplace facilitators in Alaska must collect sales tax on behalf of third-party sellers in the current or immediately preceding calendar year if they had cumulative gross receipts that exceed $100,000 from retail sales facilitated to Alaska customers; or the marketplace facilitated at least 200 separate retail transactions.
Unlike other US states, Alaska does not have a state-level sales tax. Instead, local jurisdictions are allowed to decide if they want to levy a sales tax.
Quick Facts about the Alaska Marketplace Facilitator Law
- Effective date: January 1, 2020 (and onward depending on jurisdiction)
- Threshold: This law requires that marketplace facilitators in Alaska must collect sales tax on behalf of third-party sellers in the current or immediately preceding calendar year if they had cumulative gross receipts that exceed $100,000 from retail sales facilitated to Alaska customers; or the marketplace facilitated at least 200 separate retail transactions. It’s also important to note that a marketplace and the seller can agree (in writing) to have the seller collect tax due if preferred.
- State law information: Read an FAQ on marketplace facilitator sales tax in Alaska
- Marketplaces that have adopted this law:
- Amazon (effective April 1, 2020 – In applicable jurisdictions)
Frequently asked Questions about Marketplace Facilitator Laws
What exactly is a marketplace facilitator in Alaska?
Threshold Criteria A. – Any remote seller or marketplace facilitator must collect and remit sales tax in compliance with all applicable procedures and requirements of law, provided the remote seller or marketplace facilitator has met one of the following Threshold Criteria (“Threshold Criteria”) in the previous calendar year: 1. The remote seller’s statewide gross sales, including the seller’s marketplace facilitator’s statewide gross sales, from the sale(s) of property, products or services delivered into the state meets or exceeds one hundred thousand dollars ($100,000); or 2. The remote seller, including the seller’s marketplace facilitator, sold property, products, or services delivered into the state in two hundred (200) or more separate transactions.
Threshold Criteria B. – For purposes of determining whether the Threshold Criteria are met, remote sellers or marketplace facilitators shall include all gross sales, from all sales of goods, property, products, or services rendered within the state of Alaska.
Online sales platforms like Amazon are considered marketplace facilitators under Alaska law.
A software like Shopify or Magento that allows online sellers to build and manage their own stores would not be considered a marketplace facilitator.
Does this mean I have to register for an Alaska sales tax permit?
If you only sell on marketplaces, then it is unlikely that you will be required to register in Alaska.
However, the situation with sales tax in Alaska is a little unusual. Until very recently, Alaska only had local sales taxes and only businesses based in those Alaska jurisdictions with sales tax needed to worry about collecting.
However, starting in January 2020, Alaska now allows jurisdictions to require that businesses with Alaska economic nexus collect sales tax. We recommend determining if your business has economic nexus in Alaska and is required to register for an Alaska sales tax permit and collect sales tax from Alaska buyers.
What if I’m based in Alaska?
Check out our Alaska Sales Tax, Demystified article for this and more common scenarios when it comes to Alaska’s new sales tax.
Does TaxJar handle Alaska sales tax for me?
Yes. If you find that you need to collect sales tax in Alaska, the TaxJar API is constantly updated with Alaska’s new sales tax codes and will collect the right amount of sales tax for you, every time.
Further, TaxJar Reports will provide you with the information you need to fill out your Alaska sales tax filing.
TaxJar AutoFile is not yet available for Alaska. But if you are interested in AutoFile for Alaska, let us know.
Do you have questions or something to say about the Alaska marketplace facilitator law? Start the conversation in the comments!