Alert The Tax Division offices will be closed on Friday, November 24 for a mandatory furlough day and will reopen Monday, November 27. Revenue Online will remain available to conduct business. Should you need assistance during this time, please call the mainline of the respective office location: Anchorage at 907. 269-6620 or Juneau at 907.465.2320, and leave a message.


Alcoholic Beverages Tax

Frequently Asked Questions





Sections:
  • Alcoholic Beverages Tax FAQs



  • Alcoholic Beverages Tax FAQs

    Who is liable for the alcoholic beverage tax?
    As a brew/pub owner, what requirements do I need to meet with the Department of Revenue?
    What are the tax rates on Alcoholic Beverage?
    Who pays the tax?
    Am I required to pay Alaska Alcoholic Beverage Excise Tax on liquor products I import into the state for consumption?
    Are there any exemptions from Alcoholic Beverage Excise Tax?
    How does a 'small brewery' obtain an exemption from tax at the higher rate?
    What are the penalties for failure to obtain an Alcoholic Beverage Warehouse License?
    I have a license with Alcoholic Beverage Control Board. Do I also need a license with the Alaska Department of Revenue, Tax Division?
    I have an Alcohol Excise Tax license or permit, but some months I have no activity. Do I still have to file a monthly tax return?
    Where can I find tax return forms, license or permit application forms and bond forms?


  • Who is liable for the alcoholic beverage tax?

  • Persons who first transfer or first sell alcoholic beverages (liquor, wine and beer) in Alaska are required to pay the tax. Alcoholic beverage taxes are collected primarily from wholesalers, distributors and brew/pub owners.

  • As a brew/pub owner, what requirements do I need to meet with the Department of Revenue?

  • Brew/pubs must be licensed and bonded before operating. There is no license fee but a minimal $25,000 surety bond is required as tax security. Persons located and wholly operating in Alaska may apply for a permit in lieu of the bond requirement, pre-paying their maximum monthly tax liability in an amount equivalent to their single highest monthly tax liability. Every licensed or permitted brew/pub must file an Alcoholic Beverage tax return for each licensed month, whether there is any activity, taxable or not.

  • What are the tax rates on Alcoholic Beverage?

  • Rates are available at:

    http://www.tax.alaska.gov/programs/documentviewer/viewer.aspx?2

  • Who pays the tax?

  • Every brewer, distiller, bottler, jobber, retailer, 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.

  • Am I required to pay Alaska Alcoholic Beverage Excise Tax on liquor products I import into the state for consumption?

  • Alcoholic Beverage Excise Tax is not an “import” tax, but a tax on sales of alcoholic beverage in the state. However, importation of these items must be reported on a monthly tax return as an inventory increase. Once sold the alcoholic beverage becomes taxable.

  • Are there any exemptions from Alcoholic Beverage Excise Tax?

  • Yes, Sales to the military are exempt from the alcoholic beverage excise tax. The authority for this exemption is found at 4 United States Code Section 107. 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. 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 (ABC) that the statutory definition of an 'alcoholic beverage' does not include alcohol consumed for religious and medicinal purposes. Historically, the Tax Division has concurred with this finding.

  • How does a 'small brewery' obtain an exemption from tax at the higher rate?

  • A small brewery, may qualify to pay the reduced rate of 35 cents a 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 file with the Department a copy of a Bureau of Alcohol, Tobacco and Firearms acknowledged copy of the Brewer's Notice of Intent to Pay Reduced Rate of Tax required under 27 C.F.R. 25.167 for the calendar year in which the fiscal year begins for which the partial exemption is sought.

    If proof of eligibility is not received by the Department before June 1, the tax rate under this subsection does not apply until the first day of the second month after the notice is received by the Department.

  • What are the penalties for failure to obtain an Alcoholic Beverage Warehouse License?

  • If a person owns, consigns, stores or allows the storage of alcoholic beverages, except in a licensed warehouse upon which the Alcoholic Beverage Excise Tax imposed has not been paid, that person is liable for the tax and is presumed to have committed fraud. In addition to the tax, a penalty will be imposed under AS 43.05.220(c).

    AS 43.05.220(c) states: If a tax deficiency or part of a tax deficiency is due to fraud, a civil fraud penalty equal to 50 percent of the tax due or $500, whichever is greater, shall be added to the tax. This penalty is in addition to penalties determined under (a) or (b) of this section.

  • I have a license with Alcoholic Beverage Control Board. Do I also need a license with the Alaska Department of Revenue, Tax Division?

  • Yes, the Department of Revenue (through the Tax Division) issues licenses authorizing the brewer, distiller, bottler, jobber, wholesaler, or manufacturer (liable for the payment of the tax) to sell alcoholic beverages in the state or to consign shipments of alcoholic beverages in the state.

    It is unlawful to sell alcoholic beverages in the state or to consign shipments of alcoholic beverages into the state without first furnishing the required bond and obtaining the license certificate or permit from the Department.

    The Alcoholic Beverage Control Board licenses beverage dispensaries, restaurants or eating places, clubs, pubs, recreational sites, common carrier dispensaries and package stores for the sale of alcoholic beverages. ABC Board issues licenses based on population quota.

  • I have an Alcohol Excise Tax license or permit, but some months I have no activity. Do I still have to file a monthly tax return?

  • Yes, a licensee or permittee must file a tax return even for months with no sales or other activity.

  • Where can I find tax return forms, license or permit application forms and bond forms?

  • Forms are available at http://www.tax.alaska.gov/programs/programs/forms/index.aspx?60165.



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