While Alaska does not have a state sales tax, like other states, the state does allow local jurisdictions to impose a sales tax on various goods and services. So, when you are starting a small business in Alaska, you will need to obtain an Alaska resale certificate.
A resale certificate allows Alaska small business owners to purchase materials or goods and sell goods and services to other business entities at wholesale. In addition, a resale certificate is required for renting or leasing properties to others.
Several different names can be used to refer to an Alaska resale certificate, including:
Regardless of what you call it, as a small business owner, you will need to obtain one before you can conduct business in the state of Alaska.
Just about all businesses that operate in Alaska must obtain an Alaska resale certificate. As a business owner, it is your responsibility to collect sales taxes or provide exemptions when appropriate.
You must also keep accurate records of transactions to determine how much tax you owe to the state, as well as provide supporting documentation for any tax exemptions. For example, if you sell or ship products to your customers in Alaska, you have to collect sales taxes from them if your local jurisdiction or their local jurisdiction has a sales tax.
On the other hand, if your local jurisdiction and their local jurisdiction does not have a sales tax, then you are allowed to give a tax exemption. However, you still have to report exempt tax sales to the state when you submit payment for any sales taxes you collected.
Another benefit of having an Alaska certificate of authority is it allows you to purchase goods you intend to resell to your customers and be exempt from paying sales taxes. Yet, wholesale tax exemption status only applies to goods you will resell. So, the office supplies and materials you use in the day-to-day operations of your business are not exempt from sales taxes.
It is customary for Alaska businesses to honor your wholesale certificate. However, they are not required by law to do so. As a result, some businesses may still charge you sales taxes for goods you intend to resell.
Should you pay sales taxes on your resell items, you can report the sales taxes you paid when you file and pay your state sales taxes. You are allowed to deduct the amount of taxes you paid on resale items. Otherwise, you would end up paying double taxes on these goods.
The state of Alaska requires businesses to recertify and renew their resale certificates annually. An annual fee must be paid when initially obtaining your Alaska certificate of authority and at every annual renewal.
One common question people have when starting a small business in Alaska is whether they need to obtain a resale certificate if they are just selling goods online. Whether you sell goods through your website or another online selling service, you still need to obtain an Alaska seller’s permit.
Your Alaska small business still needs an Alaska resale certificate even when shipping goods out of state. Why, you may be wondering? For starters, if you want to purchase resale goods from your suppliers and be tax-exempt, you will need your seller’s permit. Second, the state still requires you to report all out-of-state sales to support your business exempt tax sales.
FastFilings makes it quick and simple for Alaska small business owners to obtain their resale certificates.
We also assist Alaska small businesses with annual renewals of their resale certificate. Ready to get your Alaska certificate of authority? Complete your online application today! You may also contact FastFilings by filling out our online contact form should you have any questions or require further assistance.
