The Borough enacted a tobacco excise tax, effective July 1, 2016. Like many other jurisdictions, the Borough tobacco excise tax is only imposed on “distributors”— businesses that bring cigarettes or other tobacco products into the Borough for sale to local stores or retailers. Every distributor who brings cigarettes into the Borough must register with the Borough and must file a quarterly tax return.
The tax is not directly imposed on stores or other retailers who sell tobacco products in the Borough to consumers. The tax is not a sales tax, and it is not imposed on the sale of tobacco products.
For cigarettes, the tax is $2.00 per pack of cigarettes brought into the Borough. For other tobacco products, the tax is 45 percent of the wholesale price of tobacco products brought into the Borough. Distributors who pay a tobacco excise tax to a city—like Kotzebue— within the Borough can claim a credit to reduce the Borough tax by about half.
Please let us know if you have any questions about the tobacco excise tax. For example, if you bring tobacco products into the Borough, please contact us to determine whether you are subject to the tax and whether you qualify for a credit against the tax.
Download Tax Forms:
Ordinance 16-03 Tobacco Tax
Tobacco Tax Code
Tobacco Tax Form Instructions
Tobacco Tax Return (2016)
Tobacco Tax Return (2017)
Tobacco Excise Tax Registration and Annual Renewal