Quick answer
A single freelancer in Alaska with $75,000 of profit pays no Alaska income tax in 2026, but still owes about $15,495 of federal tax (self-employment tax of 15.3% on 92.35% of profit plus income tax), keeping about $59,505.
Alaska has no personal income tax and no statewide sales tax, so a freelancer’s tax bill here is almost entirely federal. What Alaska does have is a state business license that applies to independent contractors, local sales taxes in some boroughs and cities, and a biennial report if you run your business through an LLC.
How Alaska compares: in our 50-state take-home pay ranking, a single freelancer with $75,000 of profit keeps $59,505 in Alaska after federal and state income tax, tied for 1st of 51 with the other places that charge this freelancer no state income tax.
Set aside from every payment
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That is $0 of every $1,000 you receive
- Federal income tax share
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- Self-employment tax share
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- State tax share
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- Total to save this year
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Estimate for information only — not tax, legal or financial advice. Federal figures for tax year 2026; state and local taxes are not included unless you enter them. Check your situation with a CPA or enrolled agent.
What you pay on freelance profit
| Tax | Rate |
|---|---|
| Federal self-employment tax | 15.3% on 92.35% of profit (12.4% part capped at $184,500 for 2026) |
| Federal income tax | 10%–37% |
| Alaska personal income tax | None |
| Alaska statewide sales tax | None |
| Alaska business license | $50 per year or $100 for two years |
| Borough or city sales tax | Varies: none in Anchorage, 5% in Juneau, up to 7% in some cities |
| City or borough income tax | None |
No income tax, no statewide sales tax
The Legislature repealed Alaska’s individual income tax in 1980, and it has not come back. Alaska does still tax C corporations, but income from a sole proprietorship, a single-member LLC or an S corporation flows to your personal return, which Alaska doesn’t tax. There is no state return to file on your freelance profit.
The state doesn’t levy a sales tax either. That job is left to local governments.
Local sales taxes can reach services
State law gives boroughs and cities broad authority to tax sales, rentals and services, and each one writes its own rules. The result is a patchwork. According to the State Assessor’s Alaska Taxable 2024 report:
- The Municipality of Anchorage and the Fairbanks North Star Borough have no general sales tax.
- The City and Borough of Juneau charges 5%. Juneau’s tax applies to “all goods, all services and all non-residential rentals,” and anyone making sales there must register with the city before starting.
- The Kenai Peninsula Borough charges 3%, Wasilla 2.5%, and the City of Kodiak 7%. Cities inside a borough can add their tax to the borough’s.
If you work in a taxing community, ask that city or borough whether your service is taxable. If you sell to clients in other Alaska communities remotely, the Alaska Remote Seller Sales Tax Commission’s rules can also apply once your statewide gross sales top $100,000 in the previous calendar year.
The Alaska business license: yes, freelancers need one
This is the Alaska requirement freelancers most often miss. Under the Alaska Business License Act, anyone engaging in a business in the state must get a license from the Department of Commerce, Community, and Economic Development. The regulations spell it out: an independent contractor must have a business license separate from the person they provide services to.
- Fee: $50 for a one-year license or $100 for a two-year (biennial) license. Sole proprietors who are 65 or older, or disabled veterans, pay $25 a year.
- Term: licenses expire on December 31. A license issued on or after October 1 also covers the following year (or two years, for biennial).
- Renewal: renew for one or two years at the same fee. A license expired for more than two years can’t be renewed; you apply for a new one.
- Penalty: knowingly doing business without a current license can bring a civil fine of up to $300.
Employees don’t need one for their job, and neither do people who sell only occasionally.
Alaska LLCs: the biennial report
A domestic Alaska LLC files a biennial report every two years with the Division of Corporations. The fee is $100, or $137.50 if filed late. Reports are due January 2, in even-numbered years for LLCs formed in an even year and odd-numbered years for those formed in an odd year. A single-member LLC is disregarded by default for federal income tax, so you still pay self-employment tax. An S corp election is the federal lever that can change that.
Quarterly estimates are federal only
With no state income tax, there are no Alaska estimated payments. All of your quarterly payments go to the IRS: April 15, June 15 and September 15, 2026, and January 15, 2027. Size them with the quarterly estimated tax calculator.
How much to set aside
Alaska freelancers only need to cover federal tax. In the tax set-aside calculator, leave the state field at 0. For a single freelancer that is typically around 17%–24% of profit, depending on income. Budget the business license, any LLC report fee and any local sales tax you collect separately.
Frequently asked questions
Does Alaska have a state income tax for freelancers?
No. Alaska repealed its individual income tax in 1980 and has no statewide sales tax. Income from a sole proprietorship, single-member LLC or S corporation flows to your personal return, which Alaska doesn't tax, so there is no state return to file on freelance profit.
Do freelancers need a business license in Alaska?
Yes. Under the Alaska Business License Act, an independent contractor needs a state business license. It costs $50 for one year or $100 for two years and expires December 31. Knowingly doing business without a current license can bring a civil fine of up to $300.
Do I have to charge sales tax on services in Alaska?
It depends on where you work. Alaska has no statewide sales tax, but boroughs and cities set their own. Anchorage and the Fairbanks North Star Borough have no general sales tax, while Juneau charges 5% on all goods and services and Kodiak charges 7%.
How often does an Alaska LLC file a report?
Every two years. A domestic Alaska LLC files a biennial report with the Division of Corporations, due January 2. The fee is $100, or $137.50 if filed late.