Learn about the annual report and tax filing obligations for Alaska limited liability companies.
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Reports, both initial and biennial
The state of Alaska requires you to submit your first report within six months after forming your LLC. The first report is free of charge. The CPB website allows you to complete the report online. You may alternatively download and send in a form from the CPB website that already contains crucial information for your LLC.
Following that, biennial reports are required every two years on January 2 of the filing year. Reports submitted after February 1 are considered late and subject to a penalty. If you formed your LLC in an odd-numbered year, you must file your biennial report in January of each odd-numbered year. If you formed your LLC in an even-numbered year, the report is due in January of the following even-numbered year. The biannual report, like the initial report, may be done online, or you can download a blank report form completely filled out with information for your LLC. The biannual report has a filing cost of $100.
State Corporation Tax
Most LLCs are pass-through tax corporations when it comes to income taxes. In other words, the burden for paying federal income taxes is passed via the LLC to the individual LLC members. LLCs do not pay income taxes by default; only its members do. (Because Alaska is one of the few states without a personal income tax, LLC members will not have to pay state income tax on their LLC revenues.) Some states charge LLCs a separate tax or fee for the privilege of conducting business in their jurisdiction. Alaska, on the other hand, is not one of those states.
However, in certain situations, the owners of an LLC elect to have their firm taxed as if it were a corporation. This decision is made by submitting IRS Form 2553 to the IRS. (The form is available on the IRS website.) When an LLC elects to be taxed as a corporation rather than as a pass-through entity, the firm must submit a separate tax return. Alaska, like almost every other state, has a corporate income tax. The company tax in Alaska is calculated at a set of marginal rates that presently range up to 9.4%. The tax is due to the Department of Revenue in the state (DOR). Check out the DOR website for further information.
Employer Taxes in the State
Do you have workers in your LLC? If this is the case, you must pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not addressed in this section. (However, it is important to understand that federal employer tax duties begin with getting a federal employer identification number (EIN).) Alaska employers, on the other hand, may be required to pay state taxes.
You will very certainly need to register to pay state unemployment insurance (UI) taxes. Alaska’s Department of Labor and Workforce Development is in charge of these taxes (DOL). These taxes may be registered for online or by utilizing Form TREG (Alaska Employer Registration Form). Then, each quarter, utilize Form TQ01C to record your salary and pay your unemployment insurance taxes. Visit the DOL website for further information.
Taxes on Sales and Use
Alaska is now one of just five states without a sales tax. As a result, unlike LLCs in most other states, if your LLC sells things in Alaska, you won’t have to worry about paying sales tax to the state. If you sell to clients in other states, you may be compelled to collect sales tax from them.
Other States Registration
If you want to do business in states other than Alaska, your LLC may need to be registered in any or all of those states. The exact states concerned will determine if you are needed to register: each state has its own regulations for what defines conducting business and whether registration is required. For registration reasons, having a physical presence (a business location) in a state, recruiting personnel in a state, or soliciting business in a state (through telephone, print advertisements, mail, or the Internet) are sometimes considered conducting business. Obtaining a certificate of authority or comparable document is normally required for registration.