Alaska Business Registration

Starting a business in Alaska is a great choice for entrepreneurs since it is among the most tax-friendly states in the nation and provides a low-risk environment. If you want to know how to start a small business in Alaska then follow these essential steps below.

Step 1: Choose the right business idea & plan for your Alaska business

The first step towards small business ownership is to decide what kind of business you want. You should start looking for an idea that matches your interests, personal goals, and financial capabilities.

Planning greatly affects the success of a business. Before spending a significant amount of money and other resources on your business in Alaska, thoroughly analyze your idea and create a detailed plan that includes: your business name, location score, market research, etc.

Step 2: Choose a business structure

The form of small business in Alaska you choose will greatly influence your future strategies. The main business structures include:

• Sole ownership
• Partnerships
• Corporation
• Limited Liability Company - LLC

Step 3: Register your business in Alaska

Once you have chosen your business structure, the next step is to register your business. Regardless of which formal business structure you choose, you must follow this process before starting a small business in Alaska:

• Name your business.
• Select a registered agent.
• Get an Employer Identification Number (EIN).
• File formation documents.

If you plan to do business in Alaska, USA, you should have a brief understanding of taxation here, as there are some differences compared to other states.

The most noticeable feature of Alaska taxation is that unlike other states, it does not require you to pay state sales tax or individual income tax. For local sales taxes, however, the rate is around 1.76%.

As a legitimate business owner in Alaska, you also do not need to pay for any franchise or privilege tax, which is a divergence from most states. Corporate income tax rates range from 0% to 9.4%, depending on your business’s taxable income. 0% rate applies for businesses with under US$ 25,000 taxable income, and 9.4% for above US$ 222,000. You must pay this tax before the 15th day of the fourth month after the close of the tax year.

In total, there are approximately 20 taxes in Alaska. You can visit the Alaska tax division website to check out all of them for more information. If you need more support on conducting business in Alaska or any other states in the USA, One IBC is here to help you through all the process from start to finish.

Is Alaska a tax free state?

Alaska is one of the most tax-friendly states in the United States. The state can be considered tax free as it does not impose state income or sales tax. Additionally, Alaska even “pays” its residents a certain amount of money annually, just for living there.

However, unlike other tax-free jurisdictions, Alaska still has many taxes levied on businesses such as taxations on vehicle rental, mining license, oil and gas production and property. Corporate income tax rates in the state are relatively low, as it could be 0% if a business’s tax income is under US$ 25,000. The highest income tax rate is 9.4% for income from US$ 222,000 and more.

The total state and local tax imposed on Alaska citizens, including income, property, sales, and excise taxes, is only 5.16% of personal income, the lowest of all 50 states.

The reason Alaska is a tax free state is because it is underpopulated and wants to attract more people and businesses to come and reside here. The state also has huge oil reserves, which become the main source of the state’s revenue and can support the tax-free policies.

How much taxes do you pay in Alaska?

If you are planning on doing business in Alaska, you should know how much taxes you will have to pay at the end of every tax year. This could save you a lot of time and money if done correctly.

As a business in Alaska, you are required to pay three types of taxes: federal, state, and local. Taxations will be calculated on your business’s taxable income and expenses, and your staff or contractors’ taxes. Depending on your business entity and situation, you may need to pay one, two or all three types of taxes in Alaska.

For each type of taxes, there are different taxes imposed on different industries that your business is doing in, such as taxations on vehicle rental, mining license, oil and gas production and property. However, Alaska, unlike most of the other states, does not impose state sales tax or individual income tax. You still need to pay for local sales taxes, and the rate is around 1.76%.

Corporate income tax rates in Alaska range from 0% to 9.4%. The rate applies on how much of the taxable income your business has earned during the year. 0% rate applies for businesses with under US$ 25,000 taxable income, and 9.4% for above US$ 222,000.

Registering an Alaska business name is a must when you decide to form a business entity in the state. Here are the 3 basic steps you need to take to register a business name in Alaska.

Step 1: Choose a Structure for your business in Alaska

Depending on your business plan, there are different types of business structure you can start with. The one you choose to form will determine how you register your business name in Alaska. Common Alaska business registration are sole proprietorships, general partnerships, limited liability companies (LLCs).

Step 2: Check Alaska Business Name Availability

When registering an Alaska business name, you should ensure your business name is unique to avoid copyright and identity issues. If you register with One IBC service, we will help you check the Alaska State corporations database. This is the crucial step as your application will be denied if you attempt to claim a name that is already in use.

Step 3: Alaska Business Registration

Once you have completed the above 2 steps, you will need to send your Alaska company registry documents to the state. As a final step in registration, you must submit in person or by mail your Articles of Organization as well as documents related to your business to the Alaska Department of Commerce, Communities and Economic Development.