Cordova Business License: $50 Licence, 7% Sales Tax and the 6% Surtax

If you sell goods, lodging, or services inside Cordova, the city expects you to hold a local business license. The Cordova business license is separate from the Alaska state business license and separate from forming an LLC or corporation. The 2026 application lists a $50 primary license and a $35 additional license, and it asks whether you will collect sales tax or claim an exemption. Cordova levies a 7% general sales tax under Cordova Municipal Code (CMC) 5.40, plus an additional 6% surtax on lodging, car rentals, tobacco, alcohol and marijuana. This guide walks through the steps in order.

This article is informational content, not legal or tax advice. Fees, rates and rules change, so confirm every figure with Cordova City Hall before you apply or file. For complex situations, talk to a qualified attorney or CPA.

What You Need Before You Start

• Your legal business name and entity type (sole proprietorship, LLC, corporation or other)
• Your physical business address in Cordova, plus a mailing address if it differs
• Your Alaska state business license, or the application for one (Form 08-4181, $50 per year)
• A list of what you sell, marking which items are taxable goods, lodging, car rentals, tobacco, alcohol or marijuana
• A rough estimate of monthly taxable sales, so you can plan for the tax you will collect
• Resale purchase records, if you buy goods locally to resell (see Step 5)
• A calendar or reminder system for return due dates

Step 1: Get Your Statewide License and Know Which Office Does What

Before you engage in business activity in Alaska, you need a state business license under AS 43.70. The Alaska Department of Commerce, Community, and Economic Development (DCCED), Division of Corporations, Business and Professional Licensing, issues it. The fee is $50 per year for a new application (Form 08-4181) and $50 per year to renew (Form 08-4617). The only endorsement is for tobacco and nicotine retailers, at $100 per location, and occupations regulated under AS 08 need a professional license as well. Start at the DCCED Corporations page.

Alaska has no Secretary of State and no counties. The same DCCED division handles entity filings. If you form an LLC, the Articles of Organization (Form 08-0484) carry a $250 filing fee. A state license does not satisfy the Cordova requirement, and a Cordova license does not form your entity. Treat them as three separate tasks.

Step 2: Confirm That Cordova Requires a City License

Cordova requires a city license for every business operating in the city. Local rules differ across Alaska. Some cities have no general business license, and Anchorage, Ketchikan and Homer are among them. Do not assume that another city's rules apply in Cordova. Confirm the requirement with City Hall before you open for business, especially if you operate from a vehicle, a seasonal stand or a leased space.

Step 3: Complete the Application and Pick Your Sales Tax Position

The 2026 application covers two license levels and asks about sales tax. Fees are now set in the city's annual fee schedule rather than in the municipal code, so check the current schedule each year. The additional license fee was originally printed as $25. Resolution 01-25-01 corrected it to $35, so use $35 unless City Hall tells you otherwise.

Item	2026 amount	Notes
Primary City of Cordova license	$50	Required for every business operating in the city
Additional license	$35	Corrected from $25 by Resolution 01-25-01
State business license	$50 per year	DCCED, separate from the city license

On the sales tax question, answer based on what you actually sell. If you sell taxable goods or lodging, say that you will collect tax. If you buy goods to resell, say that you will claim an exemption and bring your paperwork to City Hall. A wrong answer here causes the most trouble later, so read the question twice.

Step 4: Understand the 7% Sales Tax and the 6% Surtax

Cordova charges a general sales tax of 7% under CMC 5.40. On top of that, lodging, car rentals, tobacco, alcohol and marijuana carry an additional 6% surtax. Alaska has no statewide sales tax, so the 7% is a Cordova rate, not a state rate. A business in Juneau, Fairbanks or Anchorage operates under that city's rules, not these.

Here is how the numbers work:

• Taxable retail sale of $120: 7% general tax is $8.40. No surtax applies to a general retail item.
• Lodging at $200 per night: 7% general tax is $14.00, plus the 6% surtax of $12.00, for a total of $26.00 on the room.

The 2026 rate sheet from the Alaska Remote Seller Sales Tax Commission (ARSSTC) sets a $5,000 per-item cap, so the maximum general tax on one item is $350 (7% of $5,000). Ask City Hall whether that $350 maximum also limits the 6% surtax on the same item. Do not quote customers a final total on a high-value item until you have that answer.

Step 5: Claim the Resale Exemption for Goods You Resell

If you buy goods locally and resell them, you can apply for a resale exemption through Cordova City Hall. The exemption keeps you from paying tax on inventory you plan to sell, so your customer pays the tax once, at the retail sale. Bring your business documents and the details of the goods you buy for resale. Keep every purchase record, because the exemption only works if you can show what you bought and why. Ask City Hall for the current form and process, since this guide does not describe a set form or process.

Step 6: Collect, Record and File on Time

Collect tax at the point of sale on every taxable item, and show it as a separate line on each receipt or invoice. Keep a log of taxable and exempt sales each month. Ask City Hall for your filing frequency and due dates when you receive your license, because the schedule determines when your first return is due and when penalties begin.

Late filing and late payment are expensive. The current penalties under the city code are:

• Late return: $25 for the first late return, and $50 for each later one within a year
• Late payment: 10% of the tax for the first month, plus 5% for each month after, capped at 20%
• Interest: 15%
• Failure to collect: a civil penalty of double the tax you should have collected
• Liens: unpaid tax can lead to a lien filed within 90 days, so answer any notice from City Hall quickly

Tips and Common Mistakes to Avoid

• Treating the state license as the city license. You need both if you operate in Cordova. They are separate applications with separate fees.
• Forgetting the surtax. A lodging or car rental quote with only the 7% figure undercharges tax by 6%.
• Assuming the $350 cap settles everything. Confirm how the cap applies to the surtax before you quote totals.
• Using the old $25 additional fee. The corrected figure is $35.
• Skipping tax you forgot to add. Failure to collect carries a penalty of double the tax, which is worse than collecting it on time.
• Buying inventory without the resale paperwork. Without the exemption on file, you may pay tax you can never recover from the customer.
• Missing a return date. Penalties start on the first late return, so one missed deadline costs $25 and the clock keeps running.
• Filing a yearly report for your entity. LLCs and corporations file a biennial report every two years with a $100 fee, due January 2. This is separate from the Cordova license.

Expected Results

A correct setup should let you show tax clearly on invoices, collect the right amount on taxable sales, and file returns without avoidable penalties. Results depend on your sales mix, the quality of your records, and City Hall's current rules for your business type, so this guide cannot promise any specific outcome. Businesses with lodging, rentals or alcohol sales usually need the most careful setup because the surtax applies to them.

Next Steps

Start with the DCCED page for the state license, then contact Cordova City Hall to confirm the current fee schedule, the resale exemption process, your filing dates and the surtax cap question. If your business holds multiple licenses, handles lodging or alcohol, or sells across city lines, consult a qualified attorney or CPA before you file your first return.