HB 5004 - State Sales and Use Tax

• Establishes a 3% state sales and use tax on sales and rentals of tangible personal property, services, and the use of property acquired after January 1, 2018, effective January 1, 2018.

• Authorizes the Department of Revenue to collect municipal sales and use taxes levied by cities and boroughs under AS 29.45.650 and 29.45.700, with municipalities conforming tax bases to state standards by January 1, 2020.

• Allows municipalities to levy specific sales or excise taxes on single categories of property or services (bed taxes, car rentals, liquor taxes, motor fuel taxes, etc.) in addition to general sales taxes.

• Provides extensive exemptions including food for off-premises consumption, government entities, charitable organizations, health care services, financial services, real property, and isolated/occasional sales.

• Authorizes the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement with other states to simplify tax administration and establishes the state assumes municipal tax administration responsibility by January 1, 2022.