By SUZANNE DOWNING
Gov. Mike Dunleavy is considering a statewide sales tax that would apply only during certain parts of the year, as Alaska confronts a projected budget shortfall that could exceed $1 billion in the upcoming fiscal year.
During a lengthy press conference on Wednesday, the governor acknowledged that a sales tax is among the revenue options under review. While he did not outline a specific proposal, individuals familiar with internal discussions say the concept being examined includes a base sales tax of around 2%, with the possibility of a higher rate, potentially 4%, during peak summer months when tourism activity is highest.
The idea reflects an attempt to capture seasonal economic activity while limiting the year-round impact on residents. However, even the governor indicated that moving such a proposal through the Legislature would be difficult.
The Alaska Legislature is currently controlled by Democrats, supported by a coalition that includes several Republicans who have aligned with the Democratic majority. That political reality presents a significant hurdle for any tax proposal originating from the governor’s office.
The timing of Dunleavy’s comments is notable. Lawmakers are scheduled to meet in joint session Thursday to vote on whether to override the governor’s veto of a separate tax measure targeting internet commerce. That legislation was sponsored by Sen. Bill Wielechowski and would have expanded the state’s ability to collect sales taxes on online transactions, which would raise prices for Alaskans purchasing goods and services over the internet.
It remains uncertain whether supporters of the override have secured the necessary votes. However, the governor’s public acknowledgment that a broader sales tax is under consideration could influence legislative calculations ahead of the vote, particularly among lawmakers weighing competing approaches to closing the state’s growing fiscal gap.
Alaska remains one of only a handful of states without a statewide sales tax, and past attempts to enact one have consistently faced resistance from both legislators and voters. With oil revenues under pressure and spending demands continuing to grow, the coming weeks may be focused on one tax or another.
10 thoughts on “Dunleavy floats seasonal sales tax as Alaska faces billion-dollar deficit”
Yes, a billion dollar deficit is what happens when democrats are in charge. I say yes, tax the citizens, hit them where it hurts, the pocketbook, and maybe they will wake up, pay attention, and vote for candidates who can operate within a budget, and will work toward smaller government.
Mostly agree with you, Elizabeth.
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Only problem here, “candidates who can operate within a budget, and will work toward smaller government”, what do they look like? They’re so quiet, you don’t hear them, camouflaged so you don’t see them much. C’mon, are they even real?
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Good news is no bum or nonprofit will pay Dunleavy’s tax.
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And best of all, today, January 21, 2026, the Alaska Municipal League Investment Pool has $845,727,232.43 of taxpayers’ money safely stashed out of taxpayers’ reach. (https://amlip.org/)
Com’On Mike(!!!) … Let’s cut the waste – fraud – abuse from the Guv’ment Budgets!
For crying out loud, tighten your d@mn belt, The rank and file citizens who strive to live within their shrinking means are doing so.
I just came home from shopping at Fred Meyer with my kids, where I said, over and over again, “no. We’re buying only what is on my list.”
It’s possible.
Bronson’s running mate, Josh Church, strikes me as just the guy to identify the bloat and discern how to excise it. Check him out if you haven’t yet.
You folks are way too used to riding the oil-funded Gravy Train. Time to knuckle down, pay some taxes, and fund your government. At long last, have you no sense of civic duty?
It’s impossible to tax to the level of the legislatures spend… They have blown through $40 Billion that wasn’t even in the General Fund for them to spend in the last decade alone.
Jail sentences is the only thing that will slow the spend, or lacking that option we could have a Term Limit Bill to put up for a Constitutional change on the next ballot.
100% agree with you Willy.
I’m curious why our supposedly fiscally conservative governor is now proposing a sales tax. Like most folks, I remember that his first budget proposal as governor was lean and financially responsible but as soon as the legislature attacked it, Dunleavy rolled over like a drunk in downtown Anchorage on a Saturday night and never looked back.
Reinstate taxing the oil industry (SB21 was an industry gift), eliminate the PFD and if necessary, a state income tax. Do one or all of those sensible suggestions and we can all be closer to proper and beneficial governance.
Wrote the foreigner. Go take care of your country. It seems to have great corruption, poverty and a nasty caste system.