Alaska Business License

One of the primary requirements for opening a business in Alaska is obtaining an Alaska business license. Having a business license allows you to legally conduct business activities within the state.

This article delves into the factors that determine if you need this license, the steps to acquire it, and the associated costs. By understanding these requirements, you can ensure your business complies with state laws and regulations to help set it up for success.

Do I Need a Business License in Alaska

In Alaska, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• General Business License: Alaska has a statewide, general business license. It’s a general requirement for all businesses operating within the state — regardless of the specific nature of the business. The Alaska Department of Commerce, Community, and Economic Development (DCCED) issues this license
• Professional Licenses: In Alaska, certain types of businesses or professions may require a professional license based on the type of activities they conduct. Professionals like doctors, engineers, and architects, for example, need special licenses to operate. The Alaska Division of Corporations, Business and Professional Licensing issues these licenses
• Environmental Permits: If your business involves construction, public health, signage, or zoning — or if its operation might have an environmental impact — you may need an environmental permit issued by the Alaska Department of Environmental Conservation

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Alaska plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Some Alaska cities require businesses to obtain additional local permits and licenses along with their general business license. These licenses or permits can vary based on the city’s regulations and the nature of the business. In Anchorage, for example, various businesses like nightclubs, amusement centers, and adult-oriented businesses must get a professional license on both a local and state level
• State: All businesses in Alaska must obtain a state-regulated business license. Any business entity engaging in activities within the state of Alaska — even if it doesn’t have a physical presence or location within the state — also must get an Alaska business license
• Federal: Certain industries require federal licenses — from agriculture to transportation services. If your business deals with alcohol and tobacco, for example, you need to get a license from the US Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB)

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in Alaska

In order to get your business license(s) in Alaska, you will need to complete the following steps:

• Form Your Business 
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below. 

Step 1: Form Your Business

Before setting out to obtain a business license in Alaska, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in Alaska to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets.
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to.
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation.
• Ease of Formation: With the Alaska Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward.

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Get a NAICS Code

When applying for a business license in Alaska, you must provide your primary North American Industry Classification System (NAICS) code on your license application.

The six-digit NAICS code will help classify the primary type of business activity or industry in which your business operates. The first two numbers identify your line of business (LOB) while the last four numbers give more details about what your business does within that line of business.

For more information, we recommend having a look at Alaska’s NAICS Code List or our NAICS Code Lookup overview.

Step 4: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: To apply for a local business license in Alaska, you may contact your city’s local government office. Each city in Alaska has its own rules, requirements, and steps for getting this license
• Statewide Licenses: Upon the registration of your business, you’ll receive an entity number. Use this entity number to apply for your Alaska business license. To apply for this statewide license, use the online application provided by the Alaska Division of Corporations, Business and Professional Licensing
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain additional federal licenses or permits.

Note: For more detailed information on municipalities and their respective websites, check out the Alaska Municipal League website.

Step 5: Renewal of Licenses and Permits

In Alaska, business licenses typically remain valid for one or two years. You must remember to renew your license before its expiration date.

You can renew your business license online during the first nine months after its expiration date. If it’s been between nine months and two years since your business license expired, you’ll need to use a paper form to renew it.

Alternatively, you can use a third-party service or a professional attorney for this process. This can be a good choice if you want to ensure that you avoid potential fines, as well as if you want to be as time-efficient as possible.

How Much is a Business License in Alaska

The cost for a general business license in Alaska is $50 per year. This fee applies whether you’re applying for a new business license or renewing an existing one. You may purchase this license for one or two years. If you opt for a two-year license, the total cost would be $100.

For more detailed information on fees and the application process, visit the Business Licensing Forms & Fees page on the Alaska Department of Commerce, Community, and Economic Development website.

To determine the exact costs of local business licenses and permits, you should conduct research based on your business type and location (city and borough). Many business owners choose to use a third-party service to save time and money instead of doing this research themselves.