Alaska Updates Economic Nexus Rules: Sales Threshold Changes for Remote Sellers

Although there are no sales tax requirements at the state level in Alaska, local governments can impose this tax. Since there are more than 100 local jurisdictions in Alaska, an intergovernmental agreement established an Alaska Remote Seller Sales Tax Commission (ARSSTC) to establish the regulatory frame to benefit from the 2018 Wayfair Decision.

The ARSSTC, which coordinates tax collection for remote sellers in Alaska, has changed the sales tax threshold, which affects both remote sellers and marketplace facilitators.

Impact of the Threshold Change 

Many US states changed their thresholds, while most refer to removing transaction thresholds from the equation. The ARSSTC announced that the number of transactions will no longer be part of the economic nexus rules. This decision will become effective on January 1, 2025.

In practice, this update of rules means that the 200-transaction threshold will no longer be relevant and that only turnover from remote sales or marketplace facilitators is a determining factor from an economic nexus point of view. The turnover threshold remains and is set at USD 100,000 in gross sales within the current or previous calendar year. 

Remote sellers or marketplace facilitators who registered with the ARSSTC only because they exceeded the transaction threshold and did not exceed the turnover threshold may deregister from January 1, 2025, if their turnover is within the limit.

However, the obligation to collect and remit sales tax applies until the ARSSTC registration is officially canceled. The ARSSTC provided instructions and a deregistration form that must be completed and submitted.

Conclusion

From the beginning of 2025, remote sellers and marketplace facilitators who sell or facilitate the sale of property, goods, and services in Alaska jurisdictions that are part of ARSSTC no longer need to keep track of the number of transactions for economic nexus. Moreover, if the only reason they have to collect and remit sales tax in Alaska is the 200-transaction threshold, they can deregister.

However, remote sellers and marketplace facilitators still need to pay attention to the amount of gross sales since it is the only determining factor for economic nexus.

Source: Sales Tax Institute,  Alaska Remote Seller Sales Tax Commission