Since February 2020, some taxing jurisdictions across the state have been collecting sales tax on remote purchases.
The rules regarding remote sales tax are laid out in the Uniform Code. The decision to tax remote sales lies solely with the local council or assembly. Taxing jurisdictions voluntarily join the Alaska Remote Seller Sales Tax Commission (ARSSTC) and adopt the new sales tax rules regarding remote sales. Remote sellers begin tax collection 30-days after a jurisdiction adopts the remote sales tax Uniform Code. Please see the Jurisdictions page for a list of current jurisdictions that have adopted the remote sales tax rules.
Remote sales tax is collected on sales of goods or services delivered within the State of Alaska from a business that does not have a physical presence in the taxing jurisdiction where the delivery occurs.
Point of Delivery
The Uniform Code states that tax is assessed based on the point of delivery. Point of delivery means the location at which property or a product is delivered or service is rendered. For residents who live outside a taxing jurisdiction but use a post office box located in the taxing jurisdiction, the point of delivery will be determined by where the product or service was delivered:
- If goods are sent via USPS or other private carrier to the post office box, tax would be assessed.
- If the goods are shipped via a private carrier and delivered to the residence outside the taxing jurisdiction, sales tax would not be assessed.
- Some companies bid out their delivery services and therefore at the time of purchase the buyer may not know the which delivery method will be utilized.
- Electronic services are considered “delivered” to the billing address – if that is the post office box, tax would be assessed.
The ARSSTC provides an official, accurate GIS-based tax map that depicts taxing boundaries and allowed exemptions for member jurisdictions. The data is verified by local jurisdictions and also available as a software that interfaces with a seller’s point-of-sale system. The map does not depict tax data for communities that are not part of ARSSTC.
Sellers who use the ARSSTC Tax Map are not held responsible for incorrect tax assessment. If a business does not use our official tax map, the business is responsible for correcting any errors.
Many sellers have established relationships with third-party tax preparation services who have their own tax maps. These businesses do not use the data provided by ARSSTC. The third-party tax maps often rely on zip code mapping, which means that if a zip code contains a taxing jurisdiction, the mapping software applies that tax rate across the entire zip code. Down South, that might work since taxing districts are usually the same size or larger than a zip code. Here in Alaska, that approach can be problematic because many of our zip codes are larger than a local taxing jurisdiction’s boundary. This means that someone living outside a taxing boundary but within the same zip code can be accidentally charged sales tax by a remote seller. The seller is at fault for charging sales tax if they are not using the ARSSTC tax map.
Process for Protesting Incorrect Tax Assessment
Tax may accidentally be charged due to several different reasons:
- Buyer lives in a zip code that has a taxing jurisdiction but resides outside the taxing boundary and the seller is not using the official ARSSTC tax map.
- Seller did not accommodate a sales tax cap.
- Seller did not accommodate a valid tax exemption such as for senior citizens, non-profits, resale, or government entities.
- Seller charged the incorrect tax rate.
The ARSSTC and member jurisdictions do not want tax charged incorrectly. We conduct extensive outreach to sellers regarding the tax boundaries, provide software tools with the correct tax data, and offer a process for buyers to protest incorrect tax.
If a buyer has incorrectly been charged sales tax, please follow the below steps:
- Determine the official tax rate for the point of delivery address with this Tax Map Lookup:
- How to use the Tax Map Lookup.
- Save PDF export as proof of tax rate.
- If the point of delivery is outside a taxing jurisdiction, buyer should contact the seller and provide the proof of tax rate and request a refund for the tax.
- If the seller does not comply with the tax refund request, buyer should determine if the seller is registered with the ARSSTC by reviewing the Sellers’ List