If you want to start and run an Alaska limited liability company (LLC), you'll need to prepare and file various documents with the state. This article covers the most important ongoing reporting and state tax filing requirements for Alaska LLCs.
The State of Alaska requires you to file an initial report within the first six months of creating your LLC. There is no fee for the initial report. The report can be completed online at the CPB website. You can also download a form already containing key information for your LLC from the CPB website and mail it in.
Thereafter, biennial reports are due every two years before January 2 of the filing year. Reports marked after February 1 are marked late and incur a penalty. If you created your LLC in an odd-numbered year the biennial report will be due in January of each odd-numbered year. If you created your LLC in an even-numbered year, the report will be due in January of each even-numbered year. As with the initial report, the biennial report can be completed online or you can download a blank report form already containing information for your LLC. The filing fee for the biennial report is $100.
When it comes to income taxes, most LLCs are so-called pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. By default, LLCs themselves do not pay income taxes, only their members do. (Because Alaska is one of the rare states that do not have a personal income tax, this means LLC members will not owe state income tax on their LLC earnings.) Some states impose a separate tax or fee on LLCs for the privilege of doing business in the state. Alaska, though, is not one of those states.
However, in some cases, the owners of an LLC choose to have their business treated like a corporation for tax purposes. This choice is made by filing IRS Form 2553 with the IRS. (See the IRS website for the form.) Unlike the default pass-through tax situation, when an LLC elects to be taxed as a corporation, the company itself must file a separate tax return. The State of Alaska, like almost every other state, has a corporation income tax. In Alaska, the corporate tax is computed at a series of marginal rates currently ranging up to 9.4%. The tax is payable to the state's Department of Revenue (DOR). For more details, check the DOR website.
Does your LLC have employees? If so, you'll need to pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not covered here. (But note that federal employer tax obligations start with obtaining a federal employer identification number (EIN).) However, Alaska employers also may need to pay taxes to the state.
More specifically, you'll probably need to register to pay state unemployment insurance (UI) taxes. These taxes are handled through Alaska's Department of Labor and Workforce Development (DOL). You can register for these taxes online or by using Form TREG (Alaska Employer Registration Form). Then, each quarter, use Form TQ01C to report on wages and pay the UI taxes. For more information, check the DOL website.
Alaska currently is one of just five states that does not charge sales tax. Consequently, unlike LLCs that sell goods in most other states, if your LLC sells goods in Alaska you don't need to worry about paying sales tax to the state. However, if you make sales to customers in other states, you may be required to collect sales tax for those states.
If you will be doing business in states other than Alaska, you may need to register your LLC in some or all of those states. Whether you're required to register will depend on the specific states involved: each state has its own rules for what constitutes doing business and whether registration is necessary. Often activities such as having a physical presence (a business location) in a state, hiring employees in a state, or soliciting business in a state (such as by telephone, print ads, mail, or the Internet) will be considered doing business for registration purposes. Registration usually involves obtaining a certificate of authority or similar document.
For more information on the requirements for forming and operating an LLC in Alaska, see Nolo’s article, 50-State Guide to Forming an LLC, and other articles on LLCs in the LLC section of the Nolo website.