Alaska Corporation Taxes
Bizee explains what taxes a corporation pays in Alaska — including the corporate income tax rate, federal obligations, payroll taxes, and local sales tax rules.
Bizee Editorial Staff
Editorial Team
Alaska tax snapshot
Filing fee: [STATE_FEE]
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State agency: Alaska Department of Commerce, Community, and Economic Development
Annual report due: Biennial report due every two years
State tax rate: No state corporate income tax; no state personal income tax; no state sales tax
How Alaska taxes corporations
Alaska is one of the most tax-friendly states for corporations. There's no state corporate income tax, no personal income tax, and no statewide sales tax. Your corporation still owes federal income tax, payroll taxes if you have employees, and potentially local taxes depending on where in Alaska you operate.
No Alaska state corporate income tax
No Alaska personal income tax
No statewide sales tax — but some municipalities impose their own
No franchise tax
Federal income tax applies to all corporations
Payroll taxes apply if you have employees
Alaska corporate income tax
Alaska does not impose a state corporate income tax on C corporations. That's a meaningful advantage — most states tax corporate profits at the state level on top of what you owe the IRS. In Alaska, your corporation's state-level income tax bill is zero.
S corporations follow the same pattern. Because S corp income passes through to shareholders' personal returns, and Alaska has no personal income tax, S corp owners in Alaska don't owe state income tax on their share of business income either.
Alaska personal income tax
Alaska is one of 9 states with no personal income tax. For S corporation owners and sole proprietors, that means pass-through income from the business isn't taxed at the state level. You still owe federal income tax on that income, but Alaska won't take a cut.
Alaska sales and use tax
Alaska has no statewide sales tax. That said, individual municipalities can — and do — impose their own local sales taxes and gross receipts taxes. If your corporation sells goods or services in Juneau, Anchorage, or other cities, check the local tax rules for that jurisdiction before assuming you owe nothing.
Local rates and rules vary widely across Alaska. A tax professional familiar with your municipality can help you figure out what applies to your business.
Federal taxes for corporations
Alaska's favorable state tax environment doesn't change what you owe the IRS. Federal income tax applies to all corporations regardless of which state they're formed in.
C corporations pay federal corporate income tax directly on profits. The current flat federal corporate tax rate is 21%. S corporations don't pay federal income tax at the entity level — income passes through to shareholders, who report it on their personal federal returns and pay tax at their individual rates.
Most corporations also need to pay estimated federal taxes quarterly. If your corporation expects to owe $500 or more in federal tax for the year, estimated payments are required. A tax professional can help you figure out the right payment schedule for your situation.
Employer and payroll taxes
If your corporation has employees — including yourself as an S corp owner-employee — payroll tax obligations apply at the federal level. Alaska has no state payroll tax or state unemployment insurance tax separate from the federal system.
Federal payroll taxes include FICA — Social Security at 6.2% on the first $168,600 of each employee's wages in 2025, and Medicare at 1.45% on all wages. As the employer, you match those amounts. You also withhold the employee's share from their paycheck.
Federal Unemployment Tax Act (FUTA) tax applies at 6.0% on the first $7,000 of each employee's wages. Most employers qualify for a credit of up to 5.4%, which brings the effective FUTA rate down to 0.6% for most businesses.
Other taxes and local obligations
Depending on where your corporation operates and what it does, a few other tax obligations may apply. Alaska municipalities can impose local business license taxes, occupation taxes, and property taxes on real and personal property. Rates vary by jurisdiction.
Certain industries — things like oil and gas, fishing, and mining — face additional state-level taxes and fees specific to those sectors. If your corporation operates in a regulated industry, talk to a tax professional to make sure you've covered all the obligations that apply to your business.
Frequently asked questions
There is no Alaska corporate income tax rate. Alaska does not impose a state corporate income tax on C corporations or S corporations. Your corporation's state income tax liability in Alaska is zero. You still owe federal corporate income tax at the flat 21% federal rate.
An S corp in Alaska pays no state income tax. S corp income passes through to shareholders' personal returns, and Alaska has no personal income tax, so there's no state-level tax on that income. Shareholders still owe federal income tax on their share of S corp profits. If the S corp has employees, federal payroll taxes apply.
No. Alaska has no statewide sales tax. However, some local municipalities impose their own sales taxes and gross receipts taxes. If your corporation sells goods or services in a city or borough that has a local sales tax, those local rules apply. Check with the specific municipality where you operate.
No. Alaska does not have a franchise tax. Corporations formed or operating in Alaska don't owe a franchise tax to the state. This is one of several ways Alaska's tax structure is lighter than most other states for business owners.
Yes, at the federal level. If your corporation expects to owe $500 or more in federal income tax for the year, the IRS requires quarterly estimated tax payments. This applies to both C corps and S corps. Alaska has no state estimated tax requirement because there's no state corporate or personal income tax.
No. Alaska is one of 9 states with no personal income tax. For S corp owners and other pass-through business owners, that means state-level tax on business income passed through to your personal return is zero. Federal income tax on that income still applies.
A C corp in Alaska pays federal corporate income tax at the flat 21% federal rate on profits. It does not pay Alaska state corporate income tax, personal income tax, or statewide sales tax. If the C corp has employees, federal payroll taxes — FICA and FUTA — apply. Local municipal taxes may also apply depending on where the business operates.
