The alcohol tax is a flat tax of 5% on retail purchases of alcoholic beverages, paid by consumers at point of sale.

The alcohol tax passed in April 2020 with a majority vote and took effect on February 1, 2021.

Customers pay this tax when they purchase alcohol at a restaurant, bar, or package store. The business selling alcohol collects the tax from the customer, and remits (sends) the funds to the Municipality with a monthly report of what was collected.

Estimated annual revenue of the alcohol tax is $15 million per year (based on 2021 and 2022 totals).

After costs to administer the tax have been applied, revenues are dedicated to the following uses:

1. Public safety (police, criminal justice personnel, first responders)

2. Combat and address child abuse, sexual assault, and domestic violence

3a. Behavioral health: substance misuse treatment, prevention programs, addiction recovery facilities, and mental and behavioral health programs

3b. Prevent and address homelessness

Community members said they wanted solutions. Community members expressed loud and clear that in the new State budget environment we need to step up and provide funding for critical services here in Anchorage that keep residents, their families, and their property safe and healthy. Alcohol tax funds do this.

We need to get upstream of the expensive issues we’re facing. The issues voters identified as funding priorities represent the cumulative downstream effects of trauma, persistent poverty, and other large-scale issues. We cannot “solve” them by just managing the problems, we must invest in preventing them.

The impact of alcohol misuse is about $2.4 billion per year in Alaska; $960 million of that impact is in Anchorage. Anchorage alcohol consumers pay no local tax to help offset these impacts, while many other Alaska communities already have an alcohol tax. Alcohol misuse creates significant impacts in the community, especially to businesses that have to pay increased costs related to crime, homelessness, and employee absenteeism.

The alcohol tax allows Anchorage to step up and fund critical health and public safety services, like substance misuse treatment and prevention, mental health services, and programs combatting homelessness and child abuse.

• The Mayor drafts an annual budget from all Municipal departments, which includes a proposed budget for alcohol tax funds. The Mayor submits the budget to the Assembly in the beginning of October.

• From October to November, the Anchorage Assembly then amends and approves the upcoming year’s annual budget for the Municipality, with a fiscal year of January-December. (The FY 2026 budget is approved by the end of calendar year 2025).

• The alcohol tax is a dedicated fund separate from general government funds. As such, it is approved as part of the operating budget, but not captured in the main operating budget. Instead, it is listed as Appendix R in general budget documents and treated separately.

• The executive branch then implements the budget, including spending the alcohol tax funds.

• The Mayor is responsible for submitting a report to the Assembly on the alcohol tax revenues collected and expended.

Visit the Funding page to see a detailed breakdown of where funding has gone to-date.