More Alaskan cities are taxing cigarettes

August 1, 2015

From a tax standpoint, Alaska is a pretty cool location.

The Last Frontier doesn't collect any individual income tax. It also doesn't have a state sales tax.

Local Alaskan governments, however, do have the option to collect sales and other taxes. The additional local levies in Alaska cover such things as raw fish (you did see that Deadliest Catch episode featuring the tax collector, didn't you?), hotel and motel occupancy, fuel, gambling proceeds, liquor and tobacco.

Burning cigarette

Right now, one of the most popular local tax collections is on tobacco.

More tobacco taxes in Alaska: A dozen years ago, reports Jeannette Lee Falsey in the Alaska Dispatch News, only the state's three big cities — Anchorage, Fairbanks and Juneau — taxed tobacco products. Today smokers will have to hand over enough to cover tobacco taxes in at least 13 jurisdictions.

And, according to Falsey, the tax is not only spreading, it's also increasing in some cases.

Tobacco taxes are popular, in Alaska and elsewhere, because communities view them as a politically acceptable way to raise money. Unlike sales or property taxes, tobacco and other so-called sin taxes appeal to the public's general distaste for bad habits. Plus, at least some of the tax money often goes to public health programs.

But the bottom line is, well, the bottom line. States, or in Alaska's case, cities, like tobacco taxes because they bring in money.

Still, reports Falsey, tobacco taxes are likely not enough to bridge most local government budget gaps. The Alaska Municipal League has created a new committee to examine other ways cities can raise cash, including a state income tax and local or state sales taxes.

Creative tax collection: Alaska cities are not alone in looking for other revenue streams. Sometimes those sources are old ones.

Take the efforts of another "A" state, Arizona. The Grand Canyon state has been going after around 30,000 smokers who bought cigarettes via the Internet as long ago as 2006 and didn't pay the state's sales tax on the packs.

And the tax bills could be substantial. One Arizona retiree was hit with a $4,575 tax bill for his old online cigarette purchases.

You also might find these items of interest:

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
The latest Dirty Dozen tax scam list is familiar because too many are still falling for the schemes

March 5, 2026

Tax filing season is also peak time for tax scams. Be on the lookout for…

Read More
Hello Tax Season 2026

Happy New Tax Year! Are you ready to file your 2025 tax return? I know, too early to ask. But Tax Day 2026 will be here before we realize it. The Internal Revenue Service deadline to file and pay any tax we owe is the regular April 15 date this year. It’s also Tax Day for most of the states that collect income taxes from their residents, which is most of the states! If that seems too far away right now, don’t worry. As is the case every tax season, the ol’ blog’s tips and other tax reminders should help all of us meet our state and federal responsibilities. Procrastinators also will want to keep an eye on the countdown clock just below. It tracks how much time we have until April’s Tax Day, just in case we put off our annual tax task until the absolutely final hours and decide we need to instead get an extension request into the IRS by that date. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
Leave the first comment