Alaska lesson 5 of 6
Alaska LLC taxes and the Alaska Business License
Alaska has no state personal income tax and no statewide sales tax, which is unusual nationally, but it still requires every LLC doing business in the state to hold a separate Alaska Business License, priced apart from the Articles of Organization.
How members are taxed
A pass-through Alaska LLC has no state personal income tax obligation for its members, since Alaska is one of the few states without one. An LLC that elects C corporation tax treatment instead owes Alaska's corporate income tax, which is graduated from 0% up to 9.4% on Alaska taxable income under AS 43.20, computed by reference to the federal Internal Revenue Code.
The Alaska Business License
Under AS 43.70.020, a business license is required for the privilege of engaging in a business in Alaska, and this is separate from and in addition to the Articles of Organization. The fee is $50 for a one-year license or $100 for a two-year license, payable to the Division of Corporations, Business and Professional Licensing.
Some Alaska municipalities levy their own local sales tax of roughly 1% to 7%, even though the state itself does not, so check with the borough or city where you operate.
Confirm any industry-specific professional license with the relevant Alaska licensing board in addition to the general Alaska Business License; regulated trades and professions need both.
Key takeaways
- There is no Alaska state personal income tax; only a C-Corp election pays the graduated 0% to 9.4% corporate income tax.
- The Alaska Business License is mandatory, separate from the Articles of Organization, and costs $50 a year or $100 for two years.
- Some municipalities charge local sales tax even though the state does not.
Frequently asked questions
Does Alaska have a state income tax on LLCs?
No personal state income tax applies to pass-through LLC income. Only an LLC that elects C-Corp tax treatment pays Alaska's graduated 0% to 9.4% corporate income tax.
Do I need both the Articles of Organization and a business license?
Yes. The $250 Articles of Organization creates the LLC. The separate $50-per-year Alaska Business License is required before you actually engage in business in the state.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team