A first-time homebuyer named Karen recently purchased a primary residence in Anchorage. Her neighbor tells her that Alaska has no state income tax and no state sales tax. Karen asks her licensee whether there is also no property tax in Alaska. Which of the following best describes how property taxes work in Alaska?

Correct Answer

B) Property taxes in Alaska are levied by local municipalities and boroughs, not by the state government.

Alaska has no statewide property tax. Instead, property taxes are levied at the local level by municipalities and boroughs under their own taxing authority. This is consistent with Alaska's broader tax structure, which includes no state income tax and no state sales tax. Local governments rely heavily on property tax revenue because the state does not impose these other common revenue sources.