By SUZANNE DOWNING
April 9, 2026 – Three Interior Alaska communities have now formally gone on record opposing the idea of a statewide sales tax, signaling growing resistance from local governments that already rely on their own local levies.
On Monday night, the North Pole City Council unanimously adopted a resolution opposing any proposal for a statewide sales tax. The action follows similar resolutions earlier this year from both the Fairbanks North Star Borough and the City of Fairbanks, creating a three-government bloc in the Interior warning state lawmakers against layering a statewide tax on top of local ones.
Alaska is one of five states without a statewide sales tax. However, more than 100 municipalities and boroughs already impose local sales taxes to fund services. North Pole currently levies its own 5.5% sales tax, including on remote and online purchases.
The pushback stems from Gov. Mike Dunleavy’s fiscal proposal earlier this year. In January, the governor introduced Senate Bill 227 as part of a broader fiscal plan to address Alaska’s structural budget deficit, estimated at roughly $1.5 billion for fiscal year 2026 due in part to volatile oil revenues.
The proposal included what would be Alaska’s first-ever statewide sales and use tax, structured as a seasonal levy of 4% from April 1 through Sept. 30, peak tourism and construction season, and 2% from Oct. 1 through March 31. The tax would have taken effect Jan. 1, 2027, and theoretically would sunset Jan. 1, 2034. State officials estimated it could generate between $735 million and $815 million annually.
Although the statewide sales tax provision was later removed from SB 227 in the Senate Resources Committee in February, the Interior resolutions make clear that local officials remain wary of future attempts.
Local governments’ objections center on the possibility that a statewide tax would stack on top of existing local taxes, raising combined rates for residents and businesses. Some Alaska communities already have relatively high seasonal or year-round sales taxes. Seldovia’s combined rate reaches 9.5% during the summer, while Wrangell and Kodiak are at 7%. Ketchikan can reach 8% seasonally, and communities such as Bethel and Cordova sit at 6%. Juneau has a 5% rate. Anchorage and Fairbanks currently have no general sales tax.
In late 2025, Mayor Suzanne LaFrance proposed a 3% sales tax but it had not advanced out of the Assembly. Assembly member George Martinez had also tried to get a sales tax passed but was unsuccessful.
So far, the opposition to the statewide sales tax is concentrated in the Interior.
