Alaska levies an excise tax on total costs and fees charged for the lease or rental of a passenger or recreational vehicle if the lease or rental period does not exceed 90 consecutive days.
The tax rate for passenger vehicle rental is 10%. The tax rate for recreational vehicle rental is 3%.
There are exemptions for: leases or rentals for official business by federal, state or local government agencies or employees; a lease or rental that contains a term exceeding 90 consecutive days or the rental of taxicabs by taxicab drivers; and trucks rented by individuals for moving personal property and for vehicles provided to customers by automobile dealers as replacement transportation during warranty, recall or service contract repairs.
The renter must provide proof of employment or other official status with the exempt agency to the rental/leasing agency at the time of lease/rental. The rental/leasing agency collects the vehicle rental tax from the renter and files a tax return with the Department on or before the last day of the month following the end of the calendar quarter.
More information about the vehicle rental tax may be found in the Tax Division Annual Report.