Governor to produce new plan to implement a state-wide sales tax
Governor Dunleavy has stated this week that he intends to provide legislators with a state sales tax implementation proposal shortly. This comes as the state struggles with deficits and it’s economy being amongst the worst performing in the US. Based on previously discussed plans, the tax could be around 2% – at the bottom of the US states.
Alaska is one of the last five of the 50 US states to not have a state-level sales tax. It does have over 110 municipal levies which is a common feature of the US system where states, cities, municipalities and counties have the right to impose turnover taxes. There is estimated to be over 13,000 taxing jurisdictions in the US.
Jan 2022 – plan in House of Representatives
A bill has been presented at the Alaskan House of Representatives to impose state-level sales tax for the first time. The draft rate is 2%, way below the average rate in other state of about 7%. Forty-five states and the District of Columbia collect state-wide sales taxes. In the US, over 12,000 cities, counties and municipalities are permitted to levy their own local sales and use taxes. Whilst there is no state sales tax in Alaska, the local sales taxes.
The Alaskan proposal is for the consumption tax to be imposed on the final consumer for the sale of goods and services. If enacted, it would come into force on 1 July 2022.
VAT Calc’s global VAT and GST rates checker provides a searchable database of up-to-date state sales tax rates, plus VAT / GST rates from around the world..
US extends sales tax economic nexus to foreign sellers and marketplaces
Following the 2018 South Dakota vs Wayfair Supreme Court ruling, states may include out-of-state or non-resident sellers and marketplaces in the sales tax net if they sell into the sate – known as economic nexus test which was added to the physical nexus test following Wayfair. These are subject to sales thresholds, beyond which a foreign seller or facilitating marketplace would have to register with the state revenue office, start collecting and reporting taxes.
US Sales Tax rates and selling thresholds
| State | State sales tax rate | Remote seller annual thresholds | Digital services taxable? | |||||
| $ threshold | Transactions threshold | |||||||
| Alabama | 4.0% | 1 Oct 2018 | $250,000 | Yes | ||||
| Alaska | 0% | - | n/a | No state-wide tax | ||||
| Arizona | 5.6% | 1 Oct 2019 | $100,000 | - | Yes | |||
| Arkansas | 6.5% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| California | 6.0% | 1 April 2019 | $500,000 | - | No | |||
| Colorado | 2.9% | 1 Dec 2018 | $100,000 | - | Yes | |||
| Connecticut | 6.35% | 1 Dec 2018 | $100,000 | 200 transactions | Yes | |||
| Delaware | 0.0% | - | n/a | No state sales tax | ||||
| Florida | 6.0% | 1 July 2021 | $100,000 | - | No | Communications Tax. E-books exempt | ||
| Georgia | 4.0% | 1 Jan 2019 | $100,000 | 200 transactions | No | |||
| Hawaii | 4.0% | 1 July 2018 | $100,000 | 200 transactions | Yes | General Excise Tax | ||
| Idaho | 6.0% | 1 June 2019 | $100,000 | Yes | Software exempt | |||
| Illinois | 6.25% | 1 Oct 2018 | $100,000 | 200 transactions | No | |||
| Indiana | 7.0% | 1 Oct 2018 | $100,000 | - (since Jan 2024) | Yes | |||
| Iowa | 6.0% | 1 Jan 2019 | $100,000 | - | Yes | |||
| Kansas | 6.5% | 1 July 2021 | $100,000 | - | No | |||
| Kentucky | 6.0% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Louisiana | 4.45% | 1 July 2020 | $100,000 | - (since Aug 2023) | Yes | |||
| Maine | 5.5% | 1 July 2018 | $100,000 | - (since 2022) | Yes | |||
| Maryland | 6.0% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Massachusetts | 5.6% | 1 Oct 2018 | $100,000 | No | ||||
| Michigan | 6.0% | 30 Sep 2018 | $100,000 | 200 transactions | No | |||
| Minnesota | 6.875% | 1 Oct 2018 | $100,000 | 200 transactions | Yes | |||
| Mississippi | 7.0% | 1 Sep 2018 | $250,000 | - | Yes | |||
| Missouri | 4.225% | 1 Jan 2023 | $100,000 | - | No | |||
| Montana | 0.0% | - | n/a | No state sales tax | ||||
| Nebraska | 5.5% | 1 April 2019 | $100,000 | 200 transactions | Yes | |||
| Nevada | 4.6% | 1 Oct 2018 | $100,000 | 200 transactions | No | |||
| New Hampshire | 0.0% | - | n/a | |||||
| New Jersey | 6.625% | 1 Nov 2018 | $100,000 | 200 transactions | Yes | |||
| New Mexico | 5.0% | 1 July 2019 | $100,000 | - | Yes | |||
| New York | 4.0% | 21 July 2018 | $500,000 | 100 transactions | No | |||
| North Carolina | 4.75% | 1 Nov 2018 | $100,000 | 200 transactions | Yes | |||
| North Dakota | 5.0% | 1 Oct 2018 | $100,000 | - | No | |||
| Ohio | 5.75% | 1 Aug 2019 | $100,000 | 200 transactions | Yes | |||
| Oklahoma | 4.5% | 1 Nov 2019 | $100,000 | - | No | |||
| Oregon | 0.0% | - | n/a | No state sales tax | ||||
| Pennsylvania | 6.0% | 1 July 2019 | $100,000 | Yes | ||||
| Puerto Rico | 10.5% | 1 Jan 2021 | $100,000 | 200 transactions | Yes | |||
| Rhode Island | 7.0% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| South Carolina | 6.0% | 1 Nov 2018 | $100,000 | - | No | |||
| South Dakota | 4.5% | 1 Nov 2018 | $100,000 | - (since Jul 2023) | Yes | |||
| Tennessee | 7.0% | 1 July 2019 | $100,000 | - | Yes | |||
| Texas | 6.25% | 1 Oct 2019 | $500,000 | - | Yes | Only if physcial equivilaent is taxable (e.g. books) | ||
| Utah | 4.7% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | |||
| Vermont | 6.0% | 1 July 2018 | $100,000 | 200 transactions | Yes | |||
| Virginia | 4.3% | 1 July 2019 | $100,000 | 200 transactions | Yes | |||
| Washington | 6.5% | 1 Oct 2018 | $100,000 | - | Yes | |||
| Washington, DC | 6.0% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | |||
| West Virginia | 6.0% | 1 Jan 2019 | $100,000 | 200 transactions | Yes | Streaming services only | ||
| Wisconsin | 5.0% | 1 Oct 2018 | $100,000 | - (since 2021) | Yes | |||
| Wyoming | 4.0% | 1 Feb 2019 | $100,000 | - (since 2024) | Yes | |||
