Alaska business license: who needs one, the fee and how to apply

Who needs an Alaska state business license

Alaska has one statewide business license. The Department of Commerce, Community, and Economic Development issues it under Alaska Statutes Title 43, Chapter 70 and the rules in 12 AAC 12, through its Division of Corporations, Business and Professional Licensing. The Division's business licensing page is at commerce.alaska.gov, and it is the place to apply and to check for changes.

The statute requires a state business license from anyone engaging in a business in Alaska, before they start. For this law, a business is any for-profit or nonprofit entity that sells goods, services or property for a financial benefit. Read plainly, that can include a sole proprietor selling candles from home, an online shop, a freelancer or a nonprofit that sells goods or services.

A few details decide how many licenses you need. One license for a line of business covers all your locations: one license for a line of business covers all of a firm's operations in Alaska. You can also put several activities on one license, because one license can list multiple lines of business. The rules do require a separate license for each business name, so two shops under two different names need two licenses. An independent contractor is treated as its own business: an independent contractor needs its own license.

Alaska state business license fee and license period

The fee depends on whether you pick a one-year or a two-year license, and on whether you qualify for the reduced rate. The table lists the amounts and rules as the statute and the Division's regulations state them.

The license period follows the calendar year, so a license bought late in the year can be short. The October rule fixes most of that: an annual license issued on or after October 1 also covers the next full calendar year, and a biennial one the next two. Keep in mind that the first renewal fee is not prorated, so the full renewal fee applies at the end of the first period.

The reduced rate applies only to sole proprietorships. To claim it, the application must include the sole proprietor's date of birth, or Department of Veterans Affairs documentation of a service-connected disability.

Who does not need the state license

The statute lists activities that the license law does not cover. They are fisheries businesses, liquor licensees, insurance and mining businesses, employees, investment clubs, banks and credit unions.

The exemption most relevant to small sellers covers people who sell now and then. The law does not apply to exempt if the person does not represent being regularly engaged in furnishing goods or services. The statute does not define "regularly engaged", so someone who advertises, keeps a storefront or sells on a schedule should confirm with the Division before relying on it.

Tobacco is the exception to the exemptions. A business that sells cigarettes, tobacco, electronic smoking products or nicotine products as a retailer needs the business license and a separate endorsement for each location, even if it would otherwise be exempt.

An exempt business can still hold a license if it wants one: the department will still issue a license to an exempt business that applies.

How to get a business license in Alaska

The Division takes applications on its business licensing pages at commerce.alaska.gov. The steps below follow 12 AAC 12.030, which lists what a complete application contains: business name, each primary and secondary line of business, the names of the people in the business, mailing and physical address, other licenses or permits, tobacco or nicotine sales, and annual or biennial.

1. Choose the business name

   The license is issued to a business name, and the rules require a separate license for each business name. Pick the name you will advertise and operate under before you apply.

2. List your lines of business

   The application asks for each primary and secondary line of business. If a line is regulated, such as one that needs a bond or a professional license, you must meet those rules first: must meet that line's own licensing rules, such as a bond, before the business license is issued.

3. Give names and addresses

   The application asks for the names of the people engaging in the business, the mailing and physical address of the principal place of business, and any other licenses or permits you hold.

4. State whether you sell tobacco or nicotine

   If you do, list each location and add the endorsement: $100 per location, on top of the business license.

5. Pick one or two years and pay

   Choose an annual license at $50 a year or a biennial license at $100 for a biennial (two-year) license. A sole proprietor claiming the reduced fee includes the sole proprietor's date of birth, or Department of Veterans Affairs documentation of a service-connected disability.

6. Display the license

   Once issued, display the license or a photocopy at each business establishment. Use the licensed name in ads and on your shop: advertise and operate under the name on the license.

Keeping the license current

Mistakes on a new license can be fixed cheaply. The statute allows a new license without another fee within 30 days of issue. The rules limit this to typing or similar non-substantive errors, including a spelling error or a wrong primary or secondary line of business.

Some changes need a whole new license. Under the rules, a change of business name needs a new license, apart from adding or removing a professional title or a legal-form word, and a change of ownership needs a new license. Also, a license is not transferable or assignable, so a buyer of the business applies for their own license. Address changes are simpler: mailing or physical address updated at no charge at any time.

Renew before the expiration date on your license. If it lapses, a license expired for two years or less can be renewed; after more than two years you apply for a new one. Operating without a current license can bring a civil fine of up to $300.

Other Alaska registrations to check

The state business license is often only one of the registrations a business needs. Which others apply depends on your products and where you sell. Cities and boroughs can also set their own licensing rules.

• Regulated lines of business: if a line has its own licensing rules, such as posting a bond, it must meet that line's own licensing rules, such as a bond, before the business license is issued. Check the rules for your trade first.
• Local sales taxes: under AS 29.45, a borough may levy a sales tax on sales, rents and services in the borough, and cities can levy their own. Check with the city or borough where you sell or deliver.
• Mail-order and online sellers: the same license as any other business, so selling by catalog or online does not change the state license.
• Tobacco and nicotine retailers: the per-location endorsement described above, at $100 per location, on top of the business license.

This page covers the state license only. Alaska can change these rules in any legislative session, and the Division can change its forms and fees by regulation, so confirm the details on the agency page before you apply.

Where Nation fits

Questions about the Alaska business license