Tax rates - Alaska vs. selected provinces

October 14, 2012

Alaska has the 4th lowest individual tax rates of any state. How do these rates compare to the northern Canadian provinces and territories ?

• Alaska has no state income tax or sales tax. Its corporate income tax rate is 9.4%. Individuals also get a Permanent Fund dividend of $878 in 2012. Alaska has a unemployment insurance payroll tax of 2-6%. (In Canada the federal government levies payroll taxes for unemployment insurance and old age pensions).
• Alberta has a flat 10% income tax for individuals and corporations and no sales tax. The federal government levies a 5% Goods and Services Tax (GST).
• BC’s rates vary from 5-15% for individuals. It levies a 7% sales tax. Its corporate tax rates vary from 2.5% to 10%.
• Saskatchewan’s rates vary from 11-15% for individuals. It levies a 5% sales tax (plus 5% GST). Its corporate tax rates vary from 2% to 12%.
• Yukon’s rates vary from 7-13% for individuals. It levies no sales tax (just 5% federal GST). Its corporate tax rates vary from 4% to 15%.
• NWT’s rates vary from 6-14% for individuals. It levies no sales tax (just 5% federal GST). Its corporate tax rates vary from 4% to 12%. NWT also has a payroll tax of 2%.
• Nunavut’s rates vary from 4-12% for individuals. It levies no sales tax (just 5% federal GST). Its corporate tax rates vary from 4% to 12%. Nunavut also has a payroll tax of 2%.

Commentary

Alaska has the lowest taxes in the north. It relies heavily on its non-renewable resource revenue for 95% of its state budget. Recently, production declines, lower world prices and high state outlays have caused deterioration in the State’s finances.

Sources

• a)http://taxfoundation.org/state-tax-climate/alaska



• b)http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html



• c)http://www.finance.alberta.ca/publications/tax_rebates/rates/index.html



• d)http://www.cra-arc.gc.ca/tx/bsnss/tpcs/crprtns/rts-eng.html