Alaska Capital Gains Tax, Explained
The state rate is zero, funded by oil instead of your paycheck or your gain. But unlike Texas or Wyoming, nothing in Alaska's constitution keeps it that way, and the federal stack applies in full either way.
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Quick Answer
Alaska has no capital gains tax, no individual income tax of any kind, and hasn't since it repealed the tax in 1980. Your state rate on stocks, crypto, real estate, or a business sale is 0%. What you still owe is federal: 0%, 15%, or 20% on long-term gains, plus the 3.8% NIIT above $200K single / $250K married MAGI, plus up to 25% depreciation recapture on rentals. A married couple earning $150,000 in wages who sells long-held index funds for a $300,000 gain owes Alaska $0 and owes the IRS roughly $52,600, entirely federal. Run your own numbers in our capital gains tax calculator, enter 0 in the state field.
Why the Rate Is 0%: Oil Money Replaced the Income Tax
Alaska is the one state on this list that actually had an income tax and got rid of it. Individuals paid Alaska income tax for decades, until the Trans-Alaska Pipeline started moving oil in the late 1970s and state revenue exploded. In September 1980, Governor Jay Hammond signed the repeal, making Alaska the last state in the country to eliminate a personal income tax it had previously collected. The state hasn't reinstated one in the more than four decades since.
What replaced it wasn't a different tax on individuals, it was oil. Alaska funds state government primarily through severance taxes on oil and gas production, royalties from state-owned oil and gas leases, and investment earnings from the Permanent Fund. There is no state general sales tax either, though many municipalities and boroughs levy their own local sales tax. For an individual selling stock, a business, or real estate, the practical result matches Texas or Wyoming: no state income tax return, no state capital gains form, nothing to file.
What 0% actually covers
Stocks, crypto, mutual funds, investment real estate, a business sale, collectibles, if it produces a capital gain for an individual, Alaska has no claim on it. There is no state capital gains form, no state estimated payment tied to a gain, and no state distinction between short-term and long-term. The entire analysis moves to the federal side.
What Alaskans Actually Owe: The Federal-Only Math
Zero state tax doesn't mean zero tax. The federal government taxes a gain the same in Anchorage as in Atlanta, the federal capital gains brackets just become the whole bill instead of the first layer. Three federal pieces matter:
| Federal layer | Rate | When it applies |
|---|---|---|
| Long-term capital gains | 0% / 15% / 20% | Assets held over one year; rate set by your taxable income |
| Net investment income tax (NIIT) | 3.8% | MAGI above $200K single / $250K married filing jointly |
| Depreciation recapture | Up to 25% | The depreciation you claimed on a rental, taxed at sale |
| Alaska state tax | 0% | No individual income tax since the 1980 repeal |
Worked example. A married couple in Anchorage earns $150,000 in W-2 income and sells long-held index funds for a $300,000 gain. Alaska collects $0. Federally, the gain sits in the 15% bracket: $45,000. Their MAGI is $450,000, so the $200,000 of income above the $250,000 NIIT threshold picks up the 3.8% surtax: $7,600. Total bill: $52,600, about 17.5% all-in, and every dollar of it federal. The same sale in a high-tax state could add five figures of state tax on top.
One thing zero state tax doesn't eliminate: the payment-timing problem. A six-figure gain usually means a quarterly estimated tax payment to the IRS in the quarter of the sale, Alaskans skip the state voucher, not the federal one.
The Durability Question: Statute, Not a Constitutional Lock
This is the part of the Alaska story that's genuinely different from Texas or Wyoming, and worth understanding before you build a multi-decade plan around it. All three states tax capital gains at 0% today. They don't all get there the same way, and they don't all stay there with the same guarantee.
| State | Why the rate is 0% | How hard to change |
|---|---|---|
| Texas | Constitutional ban on an individual income tax (Prop 4, 2019) | Requires a new constitutional amendment approved by voters |
| Wyoming | Constitution requires full credit for sales/use/property tax already paid, making an income tax unworkable to collect | Requires a new constitutional amendment approved by voters |
| Alaska | Legislature repealed the income tax in 1980 and has not reinstated it | A simple legislative majority and the governor's signature, no amendment needed |
No constitutional wall protects Alaska's 0% rate
Nothing in the Alaska Constitution prohibits an individual income tax the way Texas's does, and nothing requires the kind of self-defeating credit that keeps Wyoming's off the books. Alaska's 0% rate exists because the legislature repealed the tax in 1980 and no legislature since has voted to bring it back, a policy choice, not a constitutional guarantee. Lawmakers have periodically introduced resolutions that would add a constitutional requirement of voter approval before any future income tax, and none has passed. That doesn't mean an income tax is coming. It means the legal floor under Alaska's 0% rate is thinner than the floor under Texas's or Wyoming's, worth factoring into any plan that assumes today's rate holds for the next twenty years, not the next two.
None of this changes what you owe today. It's a planning-horizon consideration, most relevant if you're weighing Alaska residency as part of a long exit timeline rather than a near-term sale.
The Permanent Fund Dividend: Alaska's Other Distinctive Feature
Every eligible Alaska resident receives an annual Permanent Fund Dividend, a cash payment drawn from earnings on the state's oil-wealth investment fund. It has nothing to do with your capital gains rate, it's ordinary income, reported to you on Form 1099-MISC and included on your federal return, not a dividend or capital gain in the tax-code sense despite the name. Most years it doesn't move the needle on a major asset sale.
Don't forget the PFD when you're near the NIIT line
If you're planning a big gain in a year close to the $200K/$250K NIIT threshold, remember the PFD adds to your MAGI too. It's usually a modest amount, but on a close call it can be the dollar that pushes part of your gain into the 3.8% surtax. Worth including in the math before you finalize sale timing.
The Fine Print: Alaska Does Tax C-Corporations
Unlike Texas or Wyoming, Alaska is not a clean zero across the board. Texas has its franchise tax and Wyoming its LLC license fee, but neither taxes business income directly. Alaska does: the state runs a graduated corporate income tax on C-corporations with Alaska-source income, ranging from 0% up to 9.4%, with the top rate applying once taxable income clears roughly $222,000. If a business organized as a C-corp sells appreciated assets, that gain can be taxed at the entity level in Alaska, even though an individual seller of the same asset owes the state nothing.
This doesn't touch most individual sellers. S-corporations, partnerships, LLCs taxed as either, and sole proprietorships are pass-through entities, their income lands on the owner's personal return, where Alaska's rate is 0%. The corporate income tax only bites if the selling entity is a C-corp, which makes entity structure a real planning question here in a way it usually isn't in Texas or Wyoming. If you're selling a business and the entity is currently a C-corp, that's worth modeling before you price the deal, not after.
Alaska Capital Gains FAQs
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