Go to Retiree Tax Map Alaska Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Tax-Friendly The Last Frontier is a tax haven for retirees. Alaskans pay no state income tax or state sales tax. In addition, the state sends all permanent residents (who have lived there for at least one year) an annual dividend check from the state’s oil wealth savings account. While Alaska taxes real estate, homeowners 65 and older, or surviving spouses 60 and older, are exempt from municipal taxes on the first $150,000 of the assessed value of their property. State Sales Tax Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, which can reach 7.5%. Higher rates are found in locations that lack a property tax. But, according to the Tax Foundation, the statewide average is only 1.76%. Income Tax Range Alaska has no income tax. Social Security Benefits are not taxed. Exemptions for Other Retirement Income Alaska has no income tax. Property Taxes Although taxing property is the primary method of raising revenues for most of the larger municipalities in the state, smaller municipalities favor a sales tax. This is primarily because the smaller incorporated areas lack a tax base large enough to support the property tax.In Alaska, residents pay an average of $1,234 in taxes per $100,000 of assessed home value.Tax breaks for seniors: Homeowners 65 and older (or surviving spouses 60 and older) are exempt from municipal taxes on the first $150,000 of assessed value of their property. Vehicle Taxes Municipalities determine the sales tax for vehicles and can also choose to levy an annual registration tax. This registration tax is separate from the vehicle’s registration fee and is based on vehicle class and model year. For example, a two-year-old car in Anchorage would have a motor vehicle registration tax of $150. Inheritance and Estate Taxes None.