Ketchikan Business License: No City Licence, Seasonal Sales Tax and Tour Vehicle Permits
Ketchikan Business License: No City License, Seasonal Sales Tax and Tour Vehicle Permits
If you plan to open a business in Ketchikan, the first question is usually whether the city wants its own license. It does not. The City of Ketchikan does not require a local business license and refers businesses to the state license. That shortens the list, but it does not eliminate it. You still need the statewide Alaska business license, you still have to charge the correct Ketchikan sales tax, and if you sell vehicle tours on city streets you need a city public vehicle permit. This guide covers each step in the order most owners reach them.
Ketchikan sales tax works differently from what many newcomers expect. Alaska has no statewide sales tax, so the rate you charge depends on where you sell. In Ketchikan, the rate is a combination of a city tax and a Ketchikan Gateway Borough sales tax, and the city portion changes with the season. The city and the borough are separate taxing governments, and you collect both. Ketchikan is in a borough, not a county.
What You Need Before You Start
- Your entity paperwork if you formed an LLC or corporation, such as the Articles of Organization (Form 08-0484) or Articles of Incorporation (Form 08-0400), plus the filing confirmation
- An Alaska registered agent and registered office address, which every LLC and corporation must keep in place continuously
- A federal Employer Identification Number (EIN) if you have one or expect to hire
- A physical business address in Ketchikan and a mailing address
- A written description of what you sell, and whether the work is regulated under AS 08 and needs a professional license
- For tour operators: registration and insurance information for every vehicle you plan to use
- A dated sales log that records each sale, its price and whether it is taxable, because the city rate changes twice a year
Step 1: Confirm the City Position in Writing
Call or visit the City Clerk before you assume anything. The city's current position is that it does not require a local business license and refers businesses to the state license. Ask for that answer in writing and save it with your records. Local rules can change, so treat this article as a guide to what to ask, not as a replacement for the city's answer.
Step 2: Get the Alaska State Business License
The statewide business license is issued under AS 43.70 by the Division of Corporations, Business and Professional Licensing in the Department of Commerce, Community, and Economic Development. Alaska has no Secretary of State and no counties, so this division is the agency you need. Do not confuse this license with forming an entity. Filing Articles of Organization or Articles of Incorporation with the Corporations Section, which sits in the same division, does not replace the business license.
The fees on the verified schedule are:
- New application: $50 for one year or $100 for two years (Form 08-4181)
- Renewal: $50 for one year or $100 for two years (Form 08-4617)
- Tobacco retailer endorsement: $100 per location (the only endorsement)
- Telemedicine business registration: $100
You must hold the license before you engage in business activity in Alaska. Ask the division whether your activity needs an endorsement, and check its current processing time on the agency page before you schedule your first sale.
Step 3: Ask About an Itinerant Merchant License
If you sell from a temporary or moving location, ask the City Clerk at 334 Front Street about an itinerant merchant license. Confirm the application steps and the fee at that office. Do not assume your seasonal operation is exempt because you are small or only open part of the year.
Step 4: Learn the Ketchikan Gateway Borough Sales Tax Rates
Ketchikan's sales tax has two layers: the city rate and the borough rate. The borough rate stays at 2.5%. The city rate rises in the spring and falls in the fall. Use this schedule from the ARSSTC sales tax rate sheet effective October 1, 2026:
| Period | City rate | Borough rate | Combined rate |
|---|---|---|---|
| October to March | 3% | 2.5% | 5.5% |
| April to September | 5.5% | 2.5% | 8% |
Set your point-of-sale or booking system to switch rates on April 1 and October 1. Do not carry one rate across the whole year. A tour sold in March and a tour sold in May are taxed differently.
Step 5: Apply the Per-Item Cap Correctly
The sales tax cap works per item or service, not per transaction. The city and borough apply tax to the first $2,000 of each item or service. Amounts above $2,000 on that single item are not taxed under the cap. There is no cap on a whole transaction, so a customer who buys several items pays tax on each one in full, subject to the cap on each item.
Here is a worked example for a $150 tour sold in July. The city portion is 5.5% of $150, which is $8.25. The borough portion is 2.5% of $150, which is $3.75. The total tax is $12.00 on a combined rate of 8%.
The published maximums are $60 for the city and $50 for the borough on one item. Those numbers match the 3% city rate and 2.5% borough rate applied to $2,000. Because the city rate is higher from April to September, ask the City Clerk how the city maximum works in the summer before you quote a summer price on a high-value item. Also ask whether deposits, gratuities and bundled packages are taxable, since the answer depends on how the charge is structured.
Step 6: Get the Tour Vehicle Permit
Anyone selling vehicle tours on Ketchikan city streets needs a city public vehicle permit. Work through these steps:
- Understand the calendar-year term. The permit is issued for a calendar year, so plan to renew for each new year rather than assuming a permit covers a full season that crosses January.
- Submit the application. Include the information the City Clerk requests for each vehicle and for your business.
- Schedule a vehicle inspection. Each vehicle must be inspected by a city-approved mechanic. Ask the clerk for the current approved list and book early, because the spring rush can fill mechanic schedules.
- Provide proof of insurance. Insurance must meet the requirement under KMC 5.40.090. Ask the clerk what coverage the city expects, and keep the certificate with the vehicle.
- Pay the fee. The fee is based on the number of vehicles you operate. The amount is not set out in this article, so confirm it with the City Clerk before you budget.
Step 7: Account for Cruise Ship Sales
The City of Ketchikan and the Ketchikan Gateway Borough repealed their cruise ship onboard sales tax exemptions, effective April 1, 2025. If you sell aboard ships or to cruise passengers, do not price or file under the old exemption. Confirm with the city how onboard sales should be recorded and reported, especially if part of your revenue is collected by someone else.
Tips for Staying Compliant
- Get the state license before your first sale, not after your first busy weekend.
- Set calendar reminders for April 1 and October 1 to change your tax rate.
- Save a dated copy of the city's rate sheet each time it changes.
- Book the vehicle inspection and renew your insurance before the spring season.
- If your entity is an LLC or corporation, note that it files a biennial report every two years, not annually. The report fee is $100, and the first Initial Report is due within six months of formation with no fee.
Common Mistakes to Avoid
- Assuming no city license means no city rules. The city has no general business license, but the itinerant merchant license and the vehicle permit still apply to some operators.
- Using one sales tax rate all year. The city rate changes between October to March and April to September.
- Counting only the city tax. The borough tax is a separate 2.5% and must be collected.
- Treating the state license as an entity filing. The state license and the Articles filing are separate obligations with separate agencies.
- Letting the registered agent lapse. An LLC or corporation must keep an Alaska registered agent in place. An LLC cannot serve as its own registered agent.
- Booking inspections late. A vehicle that is not inspected cannot operate under the permit.
Expected Results
Working through these steps may help you open on schedule with the state license in hand, the correct combined sales tax rate for each month, and a current city permit for each tour vehicle. Owners who gather their documents early often find the process runs more smoothly, but processing times, fees and inspection availability vary, so no outcome is guaranteed. Plan for more time than you think you need.
Official Resources
- Division of Corporations, Business and Professional Licensing: https://www.commerce.alaska.gov/web/cbpl/Corporations
- Business entity search: https://www.commerce.alaska.gov/cbp/main/search/entities
- Alaska Department of Revenue, Tax Division: https://tax.alaska.gov/
- Alaska Small Business Development Center: https://aksbdc.org/
- SBA resources for Alaska: https://www.sba.gov/district/alaska
The City Clerk at 334 Front Street handles the city items in this guide. Confirm the borough's sales tax filing process directly with the city and borough, because Alaska has no statewide sales tax to file.
Disclaimer: This article is informational content, not legal or tax advice. Ketchikan rules, rates and fees can change. Confirm every requirement with the City Clerk, the Ketchikan Gateway Borough and the state Division of Corporations, Business and Professional Licensing before you act. For a complex situation, such as a multi-owner tour company, a corporation electing corporate tax treatment, or an operation with cruise ship sales, talk with a qualified Alaska attorney or certified public accountant.