In this Article, we will give you a snapchat of the legal compliance requirement and associated fees required to register Limited Liability Company (LLC) in Alaska and most importantly, maintain the status of an LLC, especially as a small business e-commerce start up.
In the United States, LLCs are registered on the state level, therefore you can register an LLC in any of the 50 States in the United States, including Washington DC.
You can check out the best states in the US to register your LLC as a small business e-commerce start-up, if you want to pay less State fees, less State imposed taxes and do less periodic paperwork in order to maintain your LLC.
In this Article, our focus is on Alaska LLC. What cost should you expect to pay when you register an Alaska LLC? What periodic filings requirements are imposed on Alaska LLCs? What State taxes are levied on e-commerce small business start ups in Alaska and what are the tax rates? What business permits are required to be obtained by e-commerce businesses in Alaska, what’s the cost of these permits and are there any renewal requirements?
This Article presents you a snapshot, so you know what fees and legal compliance requirements to expect if you want to register an LLC for your e-commerce small business start up in Alaska, operate with the required licences and maintain your LLC status.
Business registration and compliance on Alaska
- LLC Registration cost; the state fee for registering an LLC in Alaska is $250. You can register your Alaska LLC with Bizee for a service charge of $0 + the State fee.
- LLC registration Publishing requirement; No, LLCs in Alabama are not required to publish their registration in a local newspaper.
- Has the Option to register as an Anonymous LLC; No, LLCs in Alabama have the option to register as an anonymous LLC.
- DBA requirement; In Alaska, DBA is optional, if your LLC is operating under a different name than your LLC registered Business name. In Alaska, DBA registration cost $25. In Alaska the DBA length of approval is 5 years. You can register a DBA in Alaska online or outsource the registration of your Alaska DBA (if needed) to Bizee.
- Annual Report filing requirement; LLCs in Alaska file Biennial Report. The state filing fee to file this report is $100.
You can file the Alaska Biennial Report yourself, you’ll need to visit the Alaska Corporations Database or you can outsource the filling of your Biennial Report to Bizee for a $99 service charge.
Annual Franchise tax filing and compliance in Alaska
- State Franchise tax requirement; No
Annual State income tax filing and compliance in Alaska
- State income tax requirement; Alaska does not levy an individual income tax. However, the state does implement a corporate income tax with rates ranging from 2.0 to 9.40 percent.
- Who files State income tax; LLCs by default are passed through entities meaning that tax obligation passes through to the individuals who own the LLC. Therefore an LLC with a default tax status pays the individual state income tax. Interestingly, if the individuals behind the LLC are not resident in the state and do not have state source income (a dependent agent in the state), then they are not required to pay “individual State income tax”.
If the LLC owners are resident in the State or have State source income (a dependent agent in the state), then the LLC Owners are required to pay “individual State income tax”.
If the LLC has elected to be taxed as a corporation (C-corp), then the LLC is required to pay “Corporate State income tax”.
Periodic Sales tax filing and compliance in Alabama
- Sales tax requirement; Alaska does not impose a state sales tax. However, there is a maximum local sales tax rate of 7.50 percent, resulting in an average combined state and local sales tax rate of 1.76 percent.
- Sales tax nexus; Sales tax nexus is the state-defined threshold between a Seller and a state, which when reached makes it obligatory for the Seller to register for a Seller permit in the state, charge sales tax to customers in the state and remit the sales tax to the State Government.
Generally, there is the “physical sales tax nexus” and “economic sales tax nexus”.
Physical sales tax nexus is reached when the Seller had physical presence in the state (i.e have an office address, a warehouse etc).
In Alaska, A remote seller (a Seller that is not located in Alaska i.e a Seller located in Maryland, California, Alabama etc) meets the Alaska “economic sales tax nexus” when the remote Seller makes up to 200 transactions or $100,000 in sales in Alaska.
- Sales tax permit; there is no state sales tax in Alaska but some local governments may charge local sales tax. Remote sellers can register for an Alaska Alaska Remote Seller Sales Tax Commission.
There is no requirement to renew a Sales tax permit in Alaska.
- Reseller/Resale Certificate; Businesses who purchase products from their suppliers for the purpose of reselling those products to their customers can make sales tax free purchases from their suppliers if they have a resale certificate.
This means that Resale businesses can get cheaper product prices from their suppliers (that is product prices without sales tax included) which can help these Businesses have a higher profit margin and/or maintain competitive selling prices to their Customers.
Generally, suppliers will charge the sales tax rate applicable in the State where the product is to be delivered unless the business presents to the supplier a Resale Certificate (also called a Reseller Certificate).
The Resale certificate must be valid and acceptable in the state where the product is to be delivered.
Alaska doesn’t have a state sales tax, but local sales tax is permitted and some local governments in Alaska charge local Sales tax.
The acceptability and validity of Resale/Reseller certificates in Alaska are determined by individual local municipalities that charge local sales tax.
Please refer to the specific jurisdiction where your Supplier is to deliver products in Alaska to determine how to get a resale certificate.
Businesses can also use the MTC Uniform Sales & Use Tax Resale Certificate and present the filled out form as Resale certificate to their suppliers if they want to make sales tax free purchases for product delivery to an Alaska address.
The MTC form serves as a uniform resale certificate for various states, streamlining the process by replacing the need for multiple state-specific resale forms when dealing with your supplier.
Note; Alaska accepts the use of out-of-State Seller ID.
This means that Out of State Resale Businesses seeking sales-tax-free purchases in Alaska can use an out-of-state seller ID (i.e a seller ID issued by another US state or their home state) to fill-out the MTC uniform resale certificate. They can indicate an out-of-state seller ID as their Alaska Seller ID on the MTC form.
In Alaska, A blanket Resale certificate (This means that the resale certificate is kept on file by the Supplier to cover multiple purchase transactions between a specific Supplier and Reseller) appears to not have an expiration date.
Conclusion
This Article shows you a snap short of the legal fillings and compliance requirements for LLCs that are registered in Alabama, specifically for LLCs that want want carry on the business of selling and especially for small e-commerce start up LLCs that are registered in Alaska.
If you are wondering what might be the best State in the United States to register your small business (especially if you are a reseller or an e-commerce business), we have written this Article, where we go over our most recommended states for registering a business in the United States, if you want to pay less LLC filling and legal compliance fees, if you want less state imposed taxes and if you want to do less periodic legal paperwork required to maintain your LLC status.
