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.
17 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?
Fair question, Hans, hardly a simple one, no?
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Might the actual issue be the conflict resulting from a collision between civic duty and fiduciary duty, one of which must be imposed because the other was allowed to fail?
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Would this particular civic duty be problematic if:
(a) the failure of fiduciary duty wasn’t factual, verifiable, and, crucially, avoidable,
(b) all 5,735 IRS registered Alaskan non-profits and every indigenous peoples’ organization chose to participate,
(c) legislative conversations weren’t rising phoenix-like about restoring government workers’ defined-pension benefits,
(d) government officials ruled in advance that gas line bail-outs and subsidies weren’t allowed,
(e) this civic duty wasn’t perceived as a reward to government officials whose abrogation of their fiduciary duty created the perception that taxing some people will eliminate the increasing deficit about which taxpayers know nothing except what they’re told by the same officials who have the most to gain from sales and income taxes?
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Could issues like these explain, at least partly, the resistance of the non tax-exempt class to fulfilling this particular 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.
In fairness to Evan, it doesn’t matter if he is a foreigner in a foreign country or not. The problem is that the beliefs and the ideas he repeats are wrong, virtually every time…he was right about that one thing once, what was it the proposed state forest deal on the Kenai.
Take all three of his examples here, he simply does not understand the ramifications of any of it, or worse he does and wishes ruin and misery upon Alaskans. He wants to tax the oil industry out of existence, he wants to tax every Alaskan out of existence, and he wants to tax every productive income earning Alaskan out of existence.
He wishes he could round us up onto trains to extermination camps, like the little national Socialist he is
Steve-O. Thanks for tossing some logic and fairness toward Micah. I’ve been trying to convince him that he may not have enough information about me to support his insults. Not a big deal. I like to lead people toward evidence, logic and reason but he is resistant.
The rest of your nasty juvenile comment about the solutions to our economy I suggested can be summed up in one word, but you have to guess.
Correct? Honest? Insightful? Succinct?
What does one use to define proper and beneficial governance; what indications suggest a tipping point of sorts has been reached, that further government expansion, sustained by further taxation, may actually be counterproductive to the concept of proper and beneficial governance?
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What would replace the PFD to compensate private citizens’ loss of subsurface mineral rights?
Hotels are expensive enough on our summer visitors
Why should we pass the buck on to our state’s visitors For Alaska’s stupid legislators who can’t manage a Billion dollar budget.
Cut the budget and right size state government before we needing a tax
Because without responsible spending there is nothing stopping future legislators and governor from increasing that seasonal sales tax.
Dunleavy’s Covid shots must have gone into his brain. He’s not thinking straight