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Alert The Tax Division Offices are closed to the public until further notice. This includes both the Juneau and Anchorage offices and lobbies. Please call (907)269-6620 for assistance. Our employees are still working and able to provide customer service over the phone.

SOME DEPARTMENT OF REVENUE TAX DEADLINES EXTENDED TO JULY 15, 2020.

DEPARTMENT OF REVENUE TAX COMPLIANCE PROGRAM TEMPORARY SUSPENSION PLAN

Notice of Extended Filing and Payment Deadline for Alaska Corporate Income Tax


Alcoholic Beverages Tax

Frequently Asked Questions





Sections:
  • General Questions

  • Licensing and Bonding

  • Tax Returns and Payments



  • General Questions

    Who is liable for the alcoholic beverage tax?
    What are the alcoholic beverage tax rates?
    What is the tax rate for kombucha and sake?
    How does a ‘small brewery’ get approved for the lower tax rate?
    How do I know if a ‘small brewery’ is approved for the lower tax rate?
    Am I required to pay the alcoholic beverage tax on alcoholic products I import into the state?
    Are there any exemptions from the alcoholic beverage tax?


  • Who is liable for the alcoholic beverage tax?

  • Every brewer, distiller, bottler, jobber, wholesaler, or manufacturer who sells alcoholic beverages in the state or who consigns shipments of alcoholic beverages into the state, whether or not the alcoholic beverages are brewed, distilled, bottled, or manufactured in the state, shall pay the excise tax.

    Retailers and buyers are secondarily liable for the taxes on alcoholic beverages that are sold to the retailer or buyer. This includes common carriers that sell alcoholic beverages in Alaska airspace and waters.

  • What are the alcoholic beverage tax rates?

  • The tax rates are:
    $1.07 per gallon for malt beverages and hard cider (ABV between 0.5% and 7%);
    $2.50 per gallon for wine and other beverages with 21% or less ABV;
    $12.80 per gallon for liquor with ABV greater than 21%;
    $0.35 per gallon for beer manufactured by a small brewery approved by the Department of Revenue.

  • What is the tax rate for kombucha and sake?

  • Kombucha and sake fall under the “other beverage” category and $2.50 per gallon tax rate unless the manufacturer meets the qualifications under 26 U.S.C. 5051(a)(2) and is approved for the reduced rate of tax by the Alcohol and Tobacco Tax and Trade Bureau. In this case, the manufacturer may apply for the state’s reduced rate and the kombucha or sake may be eligible for the $0.35 per gallon tax rate.

  • How does a ‘small brewery’ get approved for the lower tax rate?

  • A small brewery may be approved to pay the reduced tax rate of $0.35 per gallon on sales of the first 60,000 barrels of beer sold in the state each fiscal year in accordance with AS 43.60.010(c). The brewer must meet the qualifications of 26 U.S.C. 5051(a)(2) and file its most recent acknowledged copy of the Alcohol and Tobacco Tax and Trade Bureau’s Brewer’s Notice (TTB F 5130.10) with an application for the reduced tax rate.

    Approval for the reduced tax rate is from July 1 to June 30.

    If the application and proof of eligibility are not received by the Department of Revenue before June 1, the brewer is not approved for the reduced tax rate until the first day of the second month after the application and notice is received by the Department.

  • How do I know if a ‘small brewery’ is approved for the lower tax rate?

  • A list of breweries approved for the reduced rate can be found on Revenue Online

  • Am I required to pay the alcoholic beverage tax on alcoholic products I import into the state?

  • The tax is not an “import” tax, but rather a tax on sales of alcoholic beverages in the state. Alcohol that is imported for personal consumption but not sold is not subject to the tax. Alcohol that is imported for resale becomes taxable when it is sold.

  • Are there any exemptions from the alcoholic beverage tax?

  • Yes. Sales to the military are exempt. The authority for this exemption is found at 4 United States Code Section 107. However, entities, such as food and beverage service corporations that have contracts with any branch of the Armed Forces to provide alcoholic beverages over which the Armed Forces has no control, are not exempt from the excise tax, even if 100% of their sales were made to military personnel.

    Sales for religious and medicinal purposes are exempt. The authority for this exemption is implied under the provisions of AS 04.21.080(b)(1). It has been the position of the Alcoholic Beverage Control Board that the statutory definition of an “alcoholic beverage” does not include alcohol consumed for religious or medicinal purposes. Historically, the Tax Division has concurred with this position.

    Licensing and Bonding

    Do I need an alcoholic beverage license from the Department of Revenue?
    I have a license with the Alcoholic Beverage Control Board. Do I need a license with the Department of Revenue?
    What type of license should I apply for?
    How do I apply for a license?
    Is there a fee for the license from the Department of Revenue?
    Is there a bond requirement for the license?
    What is a permit in lieu of bond?


  • Do I need an alcoholic beverage license from the Department of Revenue?

  • Every brewer, distiller, bottler, jobber, retailer, wholesaler, or manufacturer who sells alcoholic beverages in the state or consigns shipments of alcoholic beverages into the state must first obtain a license from the Department of Revenue, Tax Division.

  • I have a license with the Alcoholic Beverage Control Board. Do I need a license with the Department of Revenue?

  • Anyone who is listed in answer above must obtain a license from the Department of Revenue. This license is in addition to any license required by the Alcoholic Beverage Control Board.

  • What type of license should I apply for?

  • The Department of Revenue issues licenses for manufacturers, direct distributors, and bonded warehouses.

    Manufacturers are brewers, distillers, and wineries.

    Direct distributors are licensees located outside of Alaska that consign shipments of alcoholic beverages directly into Alaska.

    Bonded warehouses are alcoholic beverage warehouses that are bonded for the amount of tax that will be due to the state on its contents once they are removed from the warehouse.

  • How do I apply for a license?

  • License applications can be filed electronically using Revenue Online. If you are unable to file an application electronically, please contact the Tax Division at 907.260.6620.

  • Is there a fee for the license from the Department of Revenue?

  • No, there is no fee for the license from the Department of Revenue.

  • Is there a bond requirement for the license?

  • Yes. Each manufacturer license is required to furnish a surety bond of $25,000 payable to the Department of Revenue. The Department may, in its discretion, accept a permit in lieu of bond.

    A manufacturer who has timely filed monthly tax returns and paid the tax due to the Department over the most recent three consecutive years is not required to have a bond as long as it continues to remain in compliance with Alaska Statutes 43 Chapter 60.

    Bonded warehouses must provide a bond equal to the tax that would be payable on the anticipated maximum quantity of inventory to be held in the warehouse at any time during the license period. The bond may be a surety made payable to the Department, a cash deposit, or a letter of credit from a bank.

  • What is a permit in lieu of bond?

  • A permit in lieu of bond is an alternate form of surety. A permit in lieu of bond may be a cash deposit, a certificate of deposit, or a letter of credit. Breweries and wineries may request to use a permit in lieu of bond. This option is not available to distilleries.

    Tax Returns and Payments

    Who must file a tax return?
    I have more than one license. Can I file one tax return?
    When is the tax return due?
    What if the due date is on a weekend or holiday?
    I did not have any sales this month. Do I still need to file a tax return?
    How do I file my tax return?
    What happens if I do not file my tax return by the due date?
    When is the tax payment due?
    How can I make a tax payment?
    What happens if I do not submit my payment by the due date?
    Will I be charged interest?


  • Who must file a tax return?

  • Anyone with an alcoholic beverage license issued by the Department of Revenue must file a tax return.

  • I have more than one license. Can I file one tax return?

  • No. A separate tax return is due for each licensed facility.

  • When is the tax return due?

  • The tax return is due on the last day of the month following the month in which alcoholic beverages were sold in the state. For example, the tax return for sales made in March is due April 30.

  • What if the due date is on a weekend or holiday?

  • If the due date falls on a weekend or holiday, the tax return is due the next business day. A holiday means an Alaska state holiday or a bank holiday observed by the Federal Reserve System. Holidays include Seward’s Day in March and Alaska Day in October but do not include other states’ holidays such as Emancipation Day.

  • I did not have any sales this month. Do I still need to file a tax return?

  • Yes. A tax return must be filed each month, regardless of whether sales occurred or not.

  • How do I file my tax return?

  • Effective July 1, 2017, all tax returns must be filed electronically using Revenue Online. If you are unable to file a return electronically, please contact the Tax Division at 907.269.6620.

  • What happens if I do not file my tax return by the due date?

  • Returns that are not filed by the due date are subject to a failure to file penalty of 5% of the unpaid tax for each 30 day period or portion of a period the return is late, up to a maximum of 25%.

  • When is the tax payment due?

  • The tax payment has the same due date as the tax return. The weekend and holiday rule also applies to payments.

  • How can I make a tax payment?

  • Payments can be made by Automated Clearing House (ACH) debit payments using Revenue Online. Payments can also be made by wire transfer, check, or cash.

    Vouchers to include with your payment are available in Revenue Online and include all necessary instructions.

    The Department of Revenue cannot accept ACH credit or credit card payments.

    Please note that if your total payment exceeds $100,000 you are required to pay electronically or by wire transfer.

  • What happens if I do not submit my payment by the due date?

  • If the full amount of tax is not paid when due, a failure to pay penalty of 5% of the unpaid tax may be assessed for each 30 day period or portion of the period the payment is late, up to a maximum of 25%.

    If during any period, or portion of a period, both the failure to file and failure to pay penalties are applicable, only the failure to file penalty is imposed.

  • Will I be charged interest?

  • Under Alaska Statute 43.05.225, interest will be assessed on any unpaid or delinquent tax. Interest is compounded quarterly at the applicable rate each quarter. See here for the current interest rate.



    If you have further questions, please contact our Anchorage office at 907-269-6620 or by email at dor.tax.alcohol@alaska.gov.