n April, the Matanuska-Susitna Borough Assembly repealed a business license requirement. The Mat-Su began requiring business licenses in 1995 when the borough sought to make up for lost revenues after having difficulty collecting personal property tax on airplanes, trailers, and snowmachines. For the past twenty-nine years, borough businesses paid $100 for a license that they renewed every two years.
“Since that time, people would go online and complete the paperwork to print this business license,” says Borough Mayor Edna DeVries. “It wasn’t a hands-on process that required people to come into the office. But looking into the issue, we found that we had not been using any of that information for economic development.”
The license fee brought in about $500,000 for the borough each year, or less than 1 percent of its budget. About $90,000 covered part of the wages and benefits for multiple staffers to administer the program, mainly by comparing records against state and city licenses.
Alongside assembly members Dee McKee and Rob Yundt, DeVries sponsored Ordinance Repeal (OR) 24-038 to end the business license requirement. At the April 2 regular meeting, two people from the public spoke in support of repeal, noting that the borough never enforced compliance, there was no punishment for violations, and businesses saw no benefit from being licensed with the borough anyway.
The assembly passed the repeal unanimously.
That’s one less barrier to entry for businesses in the Mat-Su. They must still file for local licenses in the incorporated cities of Wasilla, Palmer, or Houston. And every business in Alaska must obtain a state license. But if the borough can do without business licenses, why are they necessary?
Division Director Sylvan Robb notes that a business maintaining a physical presence or physical office in Alaska is not a requirement for a business license. Rather, the need for a license is based on where business activity takes place.
“If any portion of a business’ activity occurs within the State of Alaska, then the expectation, per Alaska statutes, is the business will have an Alaska business license,” says Robb.
The statutes list certain exemptions. For example, people not regularly engaged in furnishing goods or services (a garage sale, for instance) do not need a business license for their transactions. Other exemptions in Alaska Statute (AS) 43.70.105 include fisheries business, sale of liquor with a license issued under AS 04.11, insurance business, mining business, supplying services as an employee, activities of an investment club as defined in AS 43.70.105(7), banks organized under AS 06.05 or the laws of another state, national banks chartered by the US government, credit unions organized under AS 06.45 or the laws of another state, credit unions regulated by the National Credit Union Administration, and mutual savings banks chartered under AS 06.15 or organized under the laws of another state.
Many of these exemptions are for industries that are licensed at the federal level. Other than an identification number for payroll tax purposes, most businesses do not need a business license from the federal government—except for investment advising, drug manufacturing, meatpacking, broadcasting, ground transportation, air transportation, maritime transportation, commercial fishing, or making or selling alcohol, tobacco, or firearms.
On the surface, the need for a business license may seem archaic in the online age. However, filing for a license informs a jurisdiction that a business intends to operate there and is subject to its laws. Robb says proper licensing is an easy way to inspire public confidence through a balanced regulation of competent professional and business services.
“It grants the holder the privilege to engage in business in the State of Alaska,” says Robb. “It is also required for nearly all businesses in Alaska, so obtaining a business license allows a business to comply with the law.”
Obtaining a state business license is easy, Robb says. Business owners can complete the form on the State of Alaska business licensing website. The only possible hangup, Robb notes, is when individuals apply for a reduced fee as a disabled veteran. She says that process takes longer since applications must be submitted on paper along with the required documentation.
Otherwise, a state business license can be obtained online by completing the application and paying for it. The current fee is $50 per year, or half as much for sole proprietors older than 65 or service-connected disabled veterans (only one discount applies, not both). As long as the applicant has done their research and knows their business structure, line of business, and licensing requirements, the process should take less than 15 minutes.
That might not be the final step, though. As the division’s name indicates, some businesses have other paperwork to consider.
“People can be confused about the difference between registering their corporation with the state, purchasing a business license, and obtaining a professional license,” says Robb. “Some individuals may need to do all three.”
“A market town is where you are allowed by the king to transact goods,” explains HRG educator Greg Henrikson. “If you consolidate and make trade outside the market town illegal, you make sure the taxmen are here to collect their piece.” Security guards could also be present at a single place and time, where so much money changed hands; a central location also enabled the crown to control foreign imports.
Some boroughs and cities have combined their application process, some boroughs and cities have separate applications, and in some places, only one of the local governments will have requirements. For example, the City of Fairbanks requires a city license for any person or legal entity that maintains business premises within the city limits; however, the Fairbanks North Star Borough does not have the same requirements for businesses outside of the city. This means businesses on the west end of Fairbanks only need a state license and any specialized licenses that may apply (e.g., marijuana, alcohol, tobacco, et cetera). In the Municipality of Anchorage, additional licensing and permits apply to specific industries.
According to the 2024 ASF Vendor Handbook, vendors must comply with all federal, state, and local laws and must have valid licenses with the State of Alaska, the City of Palmer, and, until recently, the Matanuska-Susitna Borough. Additional permits for raffles, drawings, and games must be obtained from the Gaming Group in the Tax Division of the Alaska Department of Revenue.
Some vendors at the fair being blindsided by an extra layer of licensing was partly the reason for repealing the borough requirement. For its part, ASF issued a statement regarding the multiple licensing requirements: “The Alaska State Fair vendors are a core part of the fair’s success. They play a vital role in providing great food, beverages, goods, and other services to fairgoers. Alaska State Fair is a private nonprofit 501(c)(3) corporation. ASF instructs vendors to comply with all federal, state, and local laws or ordinances regarding business licensing. ASF does not require them to provide their licenses to us but to follow instructions given on the particular license.”
ASF vendors apply for business licenses on the City of Palmer website. This temporary license is issued for the sole purpose of engaging in business at the State Fairgrounds during the ASF. It expires at the state fair’s conclusion during the year it was issued.
Among similar venues, licensing requirements differ from city to city. For instance, the Tanana Valley State Fair does not require a local business license because its fairgrounds are outside of Fairbanks city limits. However, it still requires vendors to display state business licenses in their booths and has the same licensing requirements for raffles, drawings, and games as the Alaska State Fair.
DeVries says the borough staff overseeing business licenses will be shifted to other potentially beneficial financial pursuits, like maybe grant writing. Refunds won’t be issued for businesses with a 2024 borough business license; however, DeVries says borough staff held back on processing recent new applications and renewals until the assembly voted on the ordinance.
Changes to the Mat-Su business license requirements won’t affect state and city requirements. In addition to a state business license, operators in Palmer, Wasilla, and Houston must also carry a city-issued license. Businesses in Palmer and Wasilla can apply for business licenses online at their respective city website. The City of Houston has an online PDF form that must be completed and sent to the city clerk for review.
As long as licensees pay the one-year or two-year fees and obligingly display their official certificates, they can be assured that they are part of a community that respects and enforces their rights to conduct business.