Alaska Veteran Benefits 2025: Property Tax, Income Tax & Financial Guide

Alaska offers unique financial advantages for veterans - no state income tax, generous property tax exemptions for disabled veterans, and the famous Permanent Fund Dividend. However, Alaska's extreme climate and high cost of living require careful financial planning.

This guide breaks down exactly what Alaska offers veterans and what it actually costs to live here.

Bottom Line Up Front

Here's what Alaska offers veterans:

State income tax: None. Alaska is one of only nine states with no state income tax.
Military retirement pay: 100% tax-free at state level (no tax to exempt from)
Property tax exemption: $150,000 assessed value for veterans with 50%+ disability rating
Permanent Fund Dividend (PFD): $1,000 per eligible resident in 2025 (amount varies annually)
Vehicle registration: Exemptions for disabled veterans
No statewide sales tax: But local municipalities may charge 2-7%

Potential annual savings for a 50% disabled veteran: $1,500-$2,500+ in property tax savings, plus $1,000 PFD annually.

Reality check: Alaska's cost of living is 22-27% above the national average. Your savings get eaten by $5.30 milk and $544/month heating bills in Fairbanks.

Income Tax Treatment for Veterans

No State Income Tax - Period

Alaska has no state income tax. Not for veterans, not for anyone. This has been the case since statehood in 1959.

What this means:

Military retirement pay: 100% yours
VA disability compensation: Tax-free (federally and state)
Civilian employment income: No state tax
Investment income: No state tax
Pension income: No state tax

Comparison to other tax-free states:

State	State Income Tax	Military Retirement Tax	Property Tax Exemption
Alaska	None	N/A (no tax to exempt)	$150K for 50%+ disabled
Florida	None	N/A	Limited exemption
Texas	None	N/A	Varies by county
Washington	None	N/A	Limited exemption
Nevada	None	N/A	Varies
South Dakota	None	N/A	100% for 100% disabled
Tennessee	None	N/A	Property tax freeze option
Wyoming	None	N/A	Varies

Alaska's combination of no income tax AND a strong property tax exemption makes it highly competitive among tax-free states.

Federal Income Tax Still Applies

You still owe federal income tax on most income (except VA disability compensation and qualifying military retirement pay under Combat-Related Special Compensation). Alaska's lack of state income tax doesn't change your federal obligations.

Permanent Fund Dividend (PFD)

This is Alaska's unique financial benefit - the state pays you to live here.

How it works: Alaska invests oil revenues into the Alaska Permanent Fund. Annual dividends are paid to eligible residents from fund earnings.

2025 PFD: $1,000 per eligible resident Historical range: $900-$2,072 (2015: $2,072; 2020-2024: $1,000-$1,400)

Eligibility requirements:

Alaska resident for full calendar year prior to application
Intend to remain Alaska resident indefinitely
Not absent from Alaska for more than 180 days during qualifying year (with exceptions)
Not claiming residency in another state
Not incarcerated

Military exception: Active duty military stationed in Alaska can qualify after establishing residency, and absences due to military orders may not count against the 180-day limit. Check with the Alaska PFD Division for specifics.

Application: Apply online January 1 - March 31 annually at pfd.alaska.gov

For a family of four: $4,000 in 2025 ($1,000 x 4)

The catch: You must file annually. Miss the application window, miss the dividend.

Is PFD taxable? Yes, for federal income tax purposes. Alaska doesn't tax it (no state income tax), but the IRS treats it as income.

Property Tax Exemptions for Veterans

50%+ Disabled Veterans - $150,000 Exemption

Veterans rated 50% or higher by the VA qualify for a property tax exemption on the first $150,000 of assessed value of their primary residence.

How it works:

Exemption applies to assessed value, not market value
Assessed value is typically lower than market value (varies by borough)
Property taxes in Alaska are municipality-based (boroughs and cities), not state-level
Rates vary significantly by location

Real-World Examples

Anchorage (Municipality of Anchorage)

Home market value: $400,000
Assessed value: ~$340,000 (85% of market value)
Property tax rate: 1.09% (varies by district)
First $150,000 exempt for 50%+ disabled veteran
Taxable value: $190,000
Annual property taxes: ~$2,071
Without exemption: ~$3,706
Annual savings: ~$1,635

Fairbanks (Fairbanks North Star Borough)

Home market value: $300,000
Assessed value: ~$300,000 (100% assessed)
Property tax rate: 1.56%
First $150,000 exempt
Taxable value: $150,000
Annual property taxes: ~$2,340
Without exemption: ~$4,680
Annual savings: ~$2,340

Juneau (City and Borough of Juneau)

Home market value: $450,000
Assessed value: ~$450,000
Property tax rate: 1.06%
First $150,000 exempt
Taxable value: $300,000
Annual property taxes: ~$3,180
Without exemption: ~$4,770
Annual savings: ~$1,590

Wasilla (Matanuska-Susitna Borough)

Home market value: $350,000
Assessed value: ~$350,000
Property tax rate: 0.76%
First $150,000 exempt
Taxable value: $200,000
Annual property taxes: ~$1,520
Without exemption: ~$2,660
Annual savings: ~$1,140

No Exemption for Disability Ratings Below 50%

Unlike some states that offer graduated exemptions, Alaska's property tax exemption is binary:

50%+ rating: $150,000 exemption
49% or lower: No exemption

If you're rated 40% or 49%, you don't qualify for the property tax exemption. However, you still benefit from no state income tax on military retirement pay and VA disability compensation.

100% Disabled - Same $150,000 Exemption

Alaska doesn't offer additional exemptions for 100% disabled veterans beyond the $150,000 exemption available at 50%. Whether you're rated 50%, 70%, or 100%, the exemption amount is the same.

This differs from states like Alabama (full exemption for 100% P&T) or Texas (various enhanced exemptions for 100% disabled).

Property Tax Varies by Borough

Alaska has no statewide property tax. Property taxes are levied by:

Organized boroughs (similar to counties)
Unified municipalities (like Anchorage and Juneau)
Cities within unorganized boroughs

Property tax rates (2024-2025):

Location	Mill Rate	Effective Rate	Typical Bill ($300K home, no exemption)
Anchorage	~10.9 mills	1.09%	~$3,270
Fairbanks (FNSB)	~15.6 mills	1.56%	~$4,680
Juneau	~10.6 mills	1.06%	~$3,180
Wasilla (Mat-Su)	~7.6 mills	0.76%	~$2,280
Kenai Peninsula Borough	~9.5 mills	0.95%	~$2,850
Soldotna	~7.2 mills	0.72%	~$2,160

Important: Many rural Alaska areas have no property tax at all. If you live in the unorganized borough without city incorporation, you may pay zero property tax regardless of veteran status.

Vehicle Registration Benefits

Disabled Veterans

Service-connected disabled veterans (any disability percentage) may qualify for exemptions or reductions in vehicle registration fees.

Details vary by disability rating and vehicle type. Contact Alaska Division of Motor Vehicles for specifics: Phone: (907) 269-5551

Purple Heart Recipients

Purple Heart license plates are available with reduced registration fees.

How to apply: Provide DD-214 and Purple Heart citation to DMV when registering vehicle.

Permanently Disabled Veterans

Veterans rated permanently disabled may qualify for disabled parking placards or license plates.

Application: DMV Form 444 with physician or VA certification.

Sales Tax - No Statewide Tax

Alaska has no statewide sales tax. However, many local municipalities charge local sales taxes ranging from 2% to 7%.

Cities with local sales tax:

Juneau: 5%
Anchorage: 0% (no local sales tax)
Fairbanks: 0% (no local sales tax)
Wasilla: 2.5%
Palmer: 3%
Homer: 7.5% (highest in Alaska)
Soldotna: 3%

For veterans: No special exemptions from local sales taxes. You pay the same rate as other residents.

Other Financial Benefits

Hunting and Fishing Licenses

100% Disabled Veterans: Free lifetime sport fishing license

60%+ Disabled Veterans: Reduced-cost hunting and fishing licenses

Application: Contact Alaska Department of Fish and Game with VA rating documentation. Phone: (907) 465-2376 Website: adfg.alaska.gov

Given Alaska's world-class hunting and fishing, these savings are substantial. A regular Alaska resident hunting license is $45, fishing license is $55, and combination licenses run $125+.

State Park Passes

No statewide exemptions for veterans on state park passes, but some local facilities offer discounts. Check with individual parks.

Business License

Alaska offers no specific business license exemptions for disabled veterans. However, the state's overall business-friendly environment (no income tax, limited regulation in some sectors) benefits veteran entrepreneurs.

Financial Impact Analysis

Let's calculate real financial impact for veterans in Alaska vs. other states.

Scenario 1: E-8 Retiree, 20 Years Service, 60% Disabled

Annual income:

Military retirement: $35,000
VA disability (60%): $14,000
Part-time employment: $20,000
Total: $69,000

Home: $350,000 (median for Anchorage area)

Alaska 20-Year Financial Impact

Benefit	Annual Savings	20-Year Total
No state income tax on $69K	$2,760 (vs 4% state rate)	$55,200
Property tax exemption	$1,635	$32,700
Permanent Fund Dividend	$1,000	$20,000
Fishing license (60%+ disabled)	$50	$1,000
TOTAL	$5,445	$108,900

Note: This assumes stable PFD at $1,000 (conservative estimate) and doesn't account for inflation.

The Cost of Living Reality

But wait. Alaska's cost of living erodes these savings significantly.

Anchorage cost of living: 122.8 index (22.8% above national average)

Annual cost differences vs. national average (for typical household):

Groceries: +26% (~$2,600 more per year)
Utilities: +60% (~$2,000 more per year)
Healthcare: +28% (~$2,800 more per year)
Transportation: +20% (~$1,800 more per year)

Total increased costs: ~$9,200 per year vs. national average

Net position: Alaska's tax benefits ($5,445/year) are offset by higher costs (~$9,200/year)

Bottom line: You're saving ~$3,755 per year vs. living in a location with 4% state income tax and no veteran property tax exemption - BUT you're spending $3,755 more than the national average to live here.

Alaska vs. Other Veteran-Friendly States

Comparison: 60% disabled veteran, $70K income, $350K home, 20 years

State	Income Tax Savings	Property Tax Savings	Special Benefits	Extra Costs (COL)	Net 20-Year
Alaska	$55,200	$32,700	$21,000 (PFD, licenses)	-$184,000 (high COL)	-$75,100
Florida	$55,200	Minimal	$0	-$40,000 (moderate COL increase)	$15,200
Texas	$55,200	$0-$32,000 (varies)	$0	-$20,000 (near average)	$67,200
South Dakota	$55,200	$0	$0	-$60,000 (13% below average)	$115,200

Alaska's harsh truth: The tax benefits are real, but the cost of living is brutal. Unless you're earning significantly above average (oil/gas jobs, government contractors) or prioritize Alaska's lifestyle over finances, you'll likely come out behind financially.

Who wins in Alaska financially?

High earners ($100K+) who maximize income tax savings
Veterans who hunt/fish extensively (save thousands on out-of-state licenses)
Veterans who value quality of life over pure dollars
Those with remote income (earning outside money, paying Alaska prices)

How to Claim Your Benefits

Property Tax Exemption

Timeline: Apply with your borough assessor's office as soon as you establish Alaska residency and receive your VA rating.

Required documents:

VA rating decision letter showing 50%+ rating
Alaska driver's license or state ID
Property deed or closing documents
Completed exemption application (form varies by borough)

Where to apply:

Anchorage (Municipality of Anchorage)

Anchorage Assessor's Office: (907) 343-6700
Address: 632 W 6th Avenue, Suite 320, Anchorage, AK 99501

Fairbanks (Fairbanks North Star Borough)

Assessor's Office: (907) 459-1428
Address: 809 Pioneer Road, Fairbanks, AK 99701

Juneau (City and Borough of Juneau)

Assessor's Office: (907) 586-5215
Address: 155 South Seward Street, Juneau, AK 99801

Wasilla (Matanuska-Susitna Borough)

Assessor's Office: (907) 861-8665
Address: 350 East Dahlia Avenue, Palmer, AK 99645

Kenai Peninsula Borough

Assessor's Office: (907) 714-2230
Address: 144 North Binkley Street, Soldotna, AK 99669

Processing time: 30-60 days typically

Annual renewal: Most boroughs do NOT require annual renewal once approved, but you must notify them if you move or your disability rating changes.

Permanent Fund Dividend

Application window: January 1 - March 31 every year

How to apply:

Create account at pfd.alaska.gov
Complete online application
Provide required documentation (Alaska ID, absence information, etc.)
Submit before March 31 deadline

Documents needed:

Alaska driver's license or state ID
Social Security number
Documentation of absences (if any)
Military orders (if claiming military exemptions)

For first-time applicants: Establish residency for full calendar year before applying. If you moved to Alaska in 2024, you can't apply until 2026 for the 2025 dividend.

Payment: Typically distributed October-December annually

Vehicle Registration Exemption

Where: Alaska DMV office Phone: (907) 269-5551

Documents needed:

VA rating letter
Alaska driver's license
Vehicle title/registration

Hunting and Fishing Licenses

Where: Alaska Department of Fish and Game or licensed vendors Online: adfg.alaska.gov Documents: VA rating letter showing 60%+ or 100% disability

Frequently Asked Questions

Does Alaska tax military retirement pay?

No. Alaska has no state income tax, so military retirement pay is not taxed at the state level. You'll still owe federal income tax unless your retirement pay qualifies for exemptions (like Combat-Related Special Compensation).

Can I get the property tax exemption if I'm rated 40%?

No. Alaska's property tax exemption requires a 50% or higher VA disability rating. At 40%, you don't qualify for the exemption.

Is the property tax exemption the same in every Alaska borough?

The $150,000 exemption amount is consistent statewide for qualifying veterans. However, property tax rates vary significantly by borough. In high-tax areas (Fairbanks at 1.56%), the exemption saves more annually than in low-tax areas (Mat-Su at 0.76%).

What if I live in a rural area with no property tax?

Then you don't benefit from the property tax exemption because you're not paying property taxes to begin with. Many areas of Alaska in the unorganized borough have zero property tax. Your main financial benefits are no state income tax and the PFD.

Can I get the PFD if I'm active duty stationed in Alaska?

Yes, if you establish Alaska residency. Simply being stationed here doesn't automatically qualify you - you must take steps to establish residency (Alaska driver's license, voter registration, declare Alaska domicile). Absences due to military orders can be exempted from the 180-day presence requirement. Contact the PFD Division for specific guidance: (907) 465-2324.

How much is the Permanent Fund Dividend?

It varies annually based on the Alaska Permanent Fund's investment performance and state budget appropriations. In 2025, it's $1,000 per eligible resident. Historically, it's ranged from $900 to $2,072. Don't count on it being stable - it's subject to political and economic factors.

Can I claim the property tax exemption and then move?

The exemption applies only while the property is your primary residence and you meet eligibility requirements. If you move out of state, you no longer qualify. If you move within Alaska, you'll need to reapply in your new borough.

Does the PFD count as income for VA disability purposes?

No. The PFD doesn't affect your VA disability rating or compensation. However, it is counted as income for federal tax purposes and may affect eligibility for some needs-based programs.

What if I'm 100% disabled but not Permanent & Total?

For Alaska's property tax exemption, you only need a 50%+ disability rating. Whether it's P&T or not doesn't matter - you qualify at 50%+ regardless of permanence status.

Can I get both the senior exemption and the veteran exemption?

This varies by borough. Some Alaska municipalities offer senior property tax exemptions (age 65+). Check with your local assessor whether you can stack exemptions or must choose one.

Do I pay property taxes on vacant land?

If you own vacant land in an organized borough with property taxes, yes. The veteran exemption applies only to your primary residence. Vacant land, rental properties, and second homes don't qualify.

Are there any other veteran discounts in Alaska?

Some businesses offer veteran discounts, but they're not mandated by state law. Alaska Airlines offers military discounts on baggage and early boarding. Individual businesses (restaurants, retailers) may offer discounts - always ask and show military ID.

Is Alaska really worth it financially for veterans?

Honest answer: For most veterans, no - not purely financially. Alaska's cost of living (22-27% above national average) typically outweighs the tax benefits unless you're a high earner ($100K+). Alaska is worth it if you value the lifestyle: hunting, fishing, outdoor recreation, small-town communities, and wilderness access. Come for the lifestyle, not the money.

What about the oil and gas jobs I've heard about?

Alaska's oil and gas industry can pay very well ($80K-$150K+ for skilled trades, operators, engineers). If you secure one of these jobs, Alaska's lack of income tax amplifies your take-home pay significantly. However, these jobs are competitive and often require specific skills or certifications. Don't move to Alaska expecting to land one immediately.

Can veterans get in-state tuition at Alaska universities?

Yes, under federal law (Veterans Access, Choice, and Accountability Act), veterans using GI Bill benefits qualify for in-state tuition at public universities regardless of residency status.

Key Takeaways

No state income tax is Alaska's biggest financial benefit - every veteran keeps 100% of military retirement and VA disability pay
Property tax exemption saves $1,100-$2,340 annually depending on home value and borough
Permanent Fund Dividend adds $1,000 per person annually (varies by year)
Cost of living is brutal - 22-27% above national average, driven by groceries (+26%), utilities (+60%), and healthcare (+28%)
Net financial impact is often negative unless you're a high earner or maximize Alaska lifestyle benefits (hunting, fishing, outdoor recreation)
Alaska works financially if: You earn $100K+, you hunt/fish extensively, you work in oil/gas/government, or you value quality of life over pure ROI

Alaska offers real tax benefits for veterans, but they're offset by the highest cost of living in the United States outside of Hawaii. Run the numbers based on your specific income, housing costs, and lifestyle before relocating.

Resources

Alaska Department of Veterans Affairs: (907) 269-8387 | veterans.alaska.gov
Permanent Fund Dividend Division: (907) 465-2324 | pfd.alaska.gov
Alaska DMV: (907) 269-5551 | doa.alaska.gov/dmv
Property Tax Exemption Info: Contact your borough assessor
Alaska Fish and Game: (907) 465-2376 | adfg.alaska.gov

Information current as of January 2025. Tax laws, PFD amounts, and benefit details may change. Verify specific details with your borough assessor and the Alaska Department of Veterans Affairs.

Alaska Veteran Benefits 2025: Property Tax, Income Tax & Financial Guide

This guide breaks down exactly what Alaska offers veterans and what it actually costs to live here.

Bottom Line Up Front

Here's what Alaska offers veterans:

State income tax: None. Alaska is one of only nine states with no state income tax.
Military retirement pay: 100% tax-free at state level (no tax to exempt from)
Property tax exemption: $150,000 assessed value for veterans with 50%+ disability rating
Permanent Fund Dividend (PFD): $1,000 per eligible resident in 2025 (amount varies annually)
Vehicle registration: Exemptions for disabled veterans
No statewide sales tax: But local municipalities may charge 2-7%

Potential annual savings for a 50% disabled veteran: $1,500-$2,500+ in property tax savings, plus $1,000 PFD annually.

Reality check: Alaska's cost of living is 22-27% above the national average. Your savings get eaten by $5.30 milk and $544/month heating bills in Fairbanks.

Income Tax Treatment for Veterans

No State Income Tax - Period

Alaska has no state income tax. Not for veterans, not for anyone. This has been the case since statehood in 1959.

What this means:

Military retirement pay: 100% yours
VA disability compensation: Tax-free (federally and state)
Civilian employment income: No state tax
Investment income: No state tax
Pension income: No state tax

Comparison to other tax-free states:

State	State Income Tax	Military Retirement Tax	Property Tax Exemption
Alaska	None	N/A (no tax to exempt)	$150K for 50%+ disabled
Florida	None	N/A	Limited exemption
Texas	None	N/A	Varies by county
Washington	None	N/A	Limited exemption
Nevada	None	N/A	Varies
South Dakota	None	N/A	100% for 100% disabled
Tennessee	None	N/A	Property tax freeze option
Wyoming	None	N/A	Varies

Alaska's combination of no income tax AND a strong property tax exemption makes it highly competitive among tax-free states.

Federal Income Tax Still Applies

Permanent Fund Dividend (PFD)

This is Alaska's unique financial benefit - the state pays you to live here.

How it works: Alaska invests oil revenues into the Alaska Permanent Fund. Annual dividends are paid to eligible residents from fund earnings.

2025 PFD: $1,000 per eligible resident Historical range: $900-$2,072 (2015: $2,072; 2020-2024: $1,000-$1,400)

Eligibility requirements:

Alaska resident for full calendar year prior to application
Intend to remain Alaska resident indefinitely
Not absent from Alaska for more than 180 days during qualifying year (with exceptions)
Not claiming residency in another state
Not incarcerated

Application: Apply online January 1 - March 31 annually at pfd.alaska.gov

For a family of four: $4,000 in 2025 ($1,000 x 4)

The catch: You must file annually. Miss the application window, miss the dividend.

Is PFD taxable? Yes, for federal income tax purposes. Alaska doesn't tax it (no state income tax), but the IRS treats it as income.

Property Tax Exemptions for Veterans

50%+ Disabled Veterans - $150,000 Exemption

Veterans rated 50% or higher by the VA qualify for a property tax exemption on the first $150,000 of assessed value of their primary residence.

How it works:

Exemption applies to assessed value, not market value
Assessed value is typically lower than market value (varies by borough)
Property taxes in Alaska are municipality-based (boroughs and cities), not state-level
Rates vary significantly by location

Real-World Examples

Anchorage (Municipality of Anchorage)

Home market value: $400,000
Assessed value: ~$340,000 (85% of market value)
Property tax rate: 1.09% (varies by district)
First $150,000 exempt for 50%+ disabled veteran
Taxable value: $190,000
Annual property taxes: ~$2,071
Without exemption: ~$3,706
Annual savings: ~$1,635

Fairbanks (Fairbanks North Star Borough)

Home market value: $300,000
Assessed value: ~$300,000 (100% assessed)
Property tax rate: 1.56%
First $150,000 exempt
Taxable value: $150,000
Annual property taxes: ~$2,340
Without exemption: ~$4,680
Annual savings: ~$2,340

Juneau (City and Borough of Juneau)

Home market value: $450,000
Assessed value: ~$450,000
Property tax rate: 1.06%
First $150,000 exempt
Taxable value: $300,000
Annual property taxes: ~$3,180
Without exemption: ~$4,770
Annual savings: ~$1,590

Wasilla (Matanuska-Susitna Borough)

Home market value: $350,000
Assessed value: ~$350,000
Property tax rate: 0.76%
First $150,000 exempt
Taxable value: $200,000
Annual property taxes: ~$1,520
Without exemption: ~$2,660
Annual savings: ~$1,140

No Exemption for Disability Ratings Below 50%

Unlike some states that offer graduated exemptions, Alaska's property tax exemption is binary:

50%+ rating: $150,000 exemption
49% or lower: No exemption

If you're rated 40% or 49%, you don't qualify for the property tax exemption. However, you still benefit from no state income tax on military retirement pay and VA disability compensation.

100% Disabled - Same $150,000 Exemption

Alaska doesn't offer additional exemptions for 100% disabled veterans beyond the $150,000 exemption available at 50%. Whether you're rated 50%, 70%, or 100%, the exemption amount is the same.

This differs from states like Alabama (full exemption for 100% P&T) or Texas (various enhanced exemptions for 100% disabled).

Property Tax Varies by Borough

Alaska has no statewide property tax. Property taxes are levied by:

Organized boroughs (similar to counties)
Unified municipalities (like Anchorage and Juneau)
Cities within unorganized boroughs

Property tax rates (2024-2025):

Location	Mill Rate	Effective Rate	Typical Bill ($300K home, no exemption)
Anchorage	~10.9 mills	1.09%	~$3,270
Fairbanks (FNSB)	~15.6 mills	1.56%	~$4,680
Juneau	~10.6 mills	1.06%	~$3,180
Wasilla (Mat-Su)	~7.6 mills	0.76%	~$2,280
Kenai Peninsula Borough	~9.5 mills	0.95%	~$2,850
Soldotna	~7.2 mills	0.72%	~$2,160

Important: Many rural Alaska areas have no property tax at all. If you live in the unorganized borough without city incorporation, you may pay zero property tax regardless of veteran status.

Vehicle Registration Benefits

Disabled Veterans

Service-connected disabled veterans (any disability percentage) may qualify for exemptions or reductions in vehicle registration fees.

Details vary by disability rating and vehicle type. Contact Alaska Division of Motor Vehicles for specifics: Phone: (907) 269-5551

Purple Heart Recipients

Purple Heart license plates are available with reduced registration fees.

How to apply: Provide DD-214 and Purple Heart citation to DMV when registering vehicle.

Permanently Disabled Veterans

Veterans rated permanently disabled may qualify for disabled parking placards or license plates.

Application: DMV Form 444 with physician or VA certification.

Sales Tax - No Statewide Tax

Alaska has no statewide sales tax. However, many local municipalities charge local sales taxes ranging from 2% to 7%.

Cities with local sales tax:

Juneau: 5%
Anchorage: 0% (no local sales tax)
Fairbanks: 0% (no local sales tax)
Wasilla: 2.5%
Palmer: 3%
Homer: 7.5% (highest in Alaska)
Soldotna: 3%

For veterans: No special exemptions from local sales taxes. You pay the same rate as other residents.

Other Financial Benefits

Hunting and Fishing Licenses

100% Disabled Veterans: Free lifetime sport fishing license

60%+ Disabled Veterans: Reduced-cost hunting and fishing licenses

Application: Contact Alaska Department of Fish and Game with VA rating documentation. Phone: (907) 465-2376 Website: adfg.alaska.gov

Given Alaska's world-class hunting and fishing, these savings are substantial. A regular Alaska resident hunting license is $45, fishing license is $55, and combination licenses run $125+.

State Park Passes

No statewide exemptions for veterans on state park passes, but some local facilities offer discounts. Check with individual parks.

Business License

Financial Impact Analysis

Let's calculate real financial impact for veterans in Alaska vs. other states.

Scenario 1: E-8 Retiree, 20 Years Service, 60% Disabled

Annual income:

Military retirement: $35,000
VA disability (60%): $14,000
Part-time employment: $20,000
Total: $69,000

Home: $350,000 (median for Anchorage area)

Alaska 20-Year Financial Impact

Benefit	Annual Savings	20-Year Total
No state income tax on $69K	$2,760 (vs 4% state rate)	$55,200
Property tax exemption	$1,635	$32,700
Permanent Fund Dividend	$1,000	$20,000
Fishing license (60%+ disabled)	$50	$1,000
TOTAL	$5,445	$108,900

Note: This assumes stable PFD at $1,000 (conservative estimate) and doesn't account for inflation.

The Cost of Living Reality

But wait. Alaska's cost of living erodes these savings significantly.

Anchorage cost of living: 122.8 index (22.8% above national average)

Annual cost differences vs. national average (for typical household):

Groceries: +26% (~$2,600 more per year)
Utilities: +60% (~$2,000 more per year)
Healthcare: +28% (~$2,800 more per year)
Transportation: +20% (~$1,800 more per year)

Total increased costs: ~$9,200 per year vs. national average

Net position: Alaska's tax benefits ($5,445/year) are offset by higher costs (~$9,200/year)

Alaska vs. Other Veteran-Friendly States

Comparison: 60% disabled veteran, $70K income, $350K home, 20 years

State	Income Tax Savings	Property Tax Savings	Special Benefits	Extra Costs (COL)	Net 20-Year
Alaska	$55,200	$32,700	$21,000 (PFD, licenses)	-$184,000 (high COL)	-$75,100
Florida	$55,200	Minimal	$0	-$40,000 (moderate COL increase)	$15,200
Texas	$55,200	$0-$32,000 (varies)	$0	-$20,000 (near average)	$67,200
South Dakota	$55,200	$0	$0	-$60,000 (13% below average)	$115,200

Who wins in Alaska financially?

High earners ($100K+) who maximize income tax savings
Veterans who hunt/fish extensively (save thousands on out-of-state licenses)
Veterans who value quality of life over pure dollars
Those with remote income (earning outside money, paying Alaska prices)

How to Claim Your Benefits

Property Tax Exemption

Timeline: Apply with your borough assessor's office as soon as you establish Alaska residency and receive your VA rating.

Required documents:

VA rating decision letter showing 50%+ rating
Alaska driver's license or state ID
Property deed or closing documents
Completed exemption application (form varies by borough)

Where to apply:

Anchorage (Municipality of Anchorage)

Anchorage Assessor's Office: (907) 343-6700
Address: 632 W 6th Avenue, Suite 320, Anchorage, AK 99501

Fairbanks (Fairbanks North Star Borough)

Assessor's Office: (907) 459-1428
Address: 809 Pioneer Road, Fairbanks, AK 99701

Juneau (City and Borough of Juneau)

Assessor's Office: (907) 586-5215
Address: 155 South Seward Street, Juneau, AK 99801

Wasilla (Matanuska-Susitna Borough)

Assessor's Office: (907) 861-8665
Address: 350 East Dahlia Avenue, Palmer, AK 99645

Kenai Peninsula Borough

Assessor's Office: (907) 714-2230
Address: 144 North Binkley Street, Soldotna, AK 99669

Processing time: 30-60 days typically

Annual renewal: Most boroughs do NOT require annual renewal once approved, but you must notify them if you move or your disability rating changes.

Permanent Fund Dividend

Application window: January 1 - March 31 every year

How to apply:

Create account at pfd.alaska.gov
Complete online application
Provide required documentation (Alaska ID, absence information, etc.)
Submit before March 31 deadline

Documents needed:

Alaska driver's license or state ID
Social Security number
Documentation of absences (if any)
Military orders (if claiming military exemptions)

For first-time applicants: Establish residency for full calendar year before applying. If you moved to Alaska in 2024, you can't apply until 2026 for the 2025 dividend.

Payment: Typically distributed October-December annually

Vehicle Registration Exemption

Where: Alaska DMV office Phone: (907) 269-5551

Documents needed:

VA rating letter
Alaska driver's license
Vehicle title/registration

Hunting and Fishing Licenses

Where: Alaska Department of Fish and Game or licensed vendors Online: adfg.alaska.gov Documents: VA rating letter showing 60%+ or 100% disability

Frequently Asked Questions

Does Alaska tax military retirement pay?

Can I get the property tax exemption if I'm rated 40%?

No. Alaska's property tax exemption requires a 50% or higher VA disability rating. At 40%, you don't qualify for the exemption.

Is the property tax exemption the same in every Alaska borough?

What if I live in a rural area with no property tax?

Can I get the PFD if I'm active duty stationed in Alaska?

How much is the Permanent Fund Dividend?

Can I claim the property tax exemption and then move?

Does the PFD count as income for VA disability purposes?

No. The PFD doesn't affect your VA disability rating or compensation. However, it is counted as income for federal tax purposes and may affect eligibility for some needs-based programs.

What if I'm 100% disabled but not Permanent & Total?

For Alaska's property tax exemption, you only need a 50%+ disability rating. Whether it's P&T or not doesn't matter - you qualify at 50%+ regardless of permanence status.

Can I get both the senior exemption and the veteran exemption?

This varies by borough. Some Alaska municipalities offer senior property tax exemptions (age 65+). Check with your local assessor whether you can stack exemptions or must choose one.

Do I pay property taxes on vacant land?

If you own vacant land in an organized borough with property taxes, yes. The veteran exemption applies only to your primary residence. Vacant land, rental properties, and second homes don't qualify.

Are there any other veteran discounts in Alaska?

Is Alaska really worth it financially for veterans?

What about the oil and gas jobs I've heard about?

Can veterans get in-state tuition at Alaska universities?

Yes, under federal law (Veterans Access, Choice, and Accountability Act), veterans using GI Bill benefits qualify for in-state tuition at public universities regardless of residency status.

Key Takeaways

No state income tax is Alaska's biggest financial benefit - every veteran keeps 100% of military retirement and VA disability pay
Property tax exemption saves $1,100-$2,340 annually depending on home value and borough
Permanent Fund Dividend adds $1,000 per person annually (varies by year)
Cost of living is brutal - 22-27% above national average, driven by groceries (+26%), utilities (+60%), and healthcare (+28%)
Net financial impact is often negative unless you're a high earner or maximize Alaska lifestyle benefits (hunting, fishing, outdoor recreation)
Alaska works financially if: You earn $100K+, you hunt/fish extensively, you work in oil/gas/government, or you value quality of life over pure ROI

Resources

Alaska Department of Veterans Affairs: (907) 269-8387 | veterans.alaska.gov
Permanent Fund Dividend Division: (907) 465-2324 | pfd.alaska.gov
Alaska DMV: (907) 269-5551 | doa.alaska.gov/dmv
Property Tax Exemption Info: Contact your borough assessor
Alaska Fish and Game: (907) 465-2376 | adfg.alaska.gov

Information current as of January 2025. Tax laws, PFD amounts, and benefit details may change. Verify specific details with your borough assessor and the Alaska Department of Veterans Affairs.