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Alcoholic Beverages Tax

Frequently Asked Questions





Sections:
  • General Questions

  • Licensing and Bonding

  • Tax Returns



  • 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.

    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

    What are the tax return filing requirements?
    How do I file my tax return?


  • What are the tax return filing requirements?

  • Licensees are required to file a tax return each month, regardless of whether sales occurred or not. Tax returns are due on the last day of the month following the month of the return.

  • 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 907.260.6620.



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