Green Driver State Incentives in Alaska

Alaska's eco-minded residents can save money with the following green driver incentives. Whether you drive an electric car, hybrid, alternative fuel vehicle, or some other fuel-efficient automobile, you should also keep pace with the latest AK legislation.

As Alaska's attention to going green intensifies, the green driving incentives and laws might also evolve. Two more great resources are your local Division of Motor Vehicles (DMV) branch and the Alternative Fuels Data Center.

Alaska Vehicle Registration and Emissions Testing

Although the Alaska DMV requires the following vehicles to maintain valid AK vehicle registration, at this time emissions testing is not required. If you drive the following, you must register it with the Division of Motor Vehicles in order to legally operate it on Alaska's public roads.

  • Passenger vehicles, trucks, buses, vans.
  • Motorhomes.
  • Motorcycles.
  • Boats.
  • ATVs.
  • Snow machines.
  • Trailers.

Up until recent years, Anchorage and Fairbanks North Star Borough (FNSB) required I/M testing to keep gross polluters off the road. Today, it's up to Alaska's drivers to do their best to reduce their carbon footprint and keep the local environment pristine.

Alaska Incentives for Eco-Friendly Driving

Although the Division of Motor Vehicles (DMV) does not offer an emissions and smog test exemptions for electric cars and other fuel-efficient vehicles, you can find more on other perks specific to eco-friendly driving—such as tax breaks and auto insurance discounts—on our page on green driver incentives.

Auto Insurance Discounts for AK's Eco-Friendly Drivers

Some Alaska auto insurance providers offer insurance discounts for having environmentally-conscious driving habits and/or driving a fuel-efficient vehicle. Consult your car insurance company about potential green vehicle discounts such as:

  • Hybrid auto discounts.
  • Alternative fuel vehicle (AFV) discounts.
  • Economy car discounts.
  • Low-mileage discounts.
  • Pay as you drive discounts.

Of course, providers and circumstances dictate auto insurance discounts. But it's worth looking into. For example, you might receive a 10% discount on car insurance for owning or leasing a hybrid car. Or keeping your miles low might earn you up to a 30% auto insurance discount.

If your current AK auto insurance carrier doesn't reward eco-friendly driving, find one that does. Compare auto insurance rates online and save some green for going green.

Tax Incentives in Alaska

At this time, Alaska offers one tax rate break involving the purchase of ethanol fuel. However, you might be eligible for a federal tax credit offered by the Internal Revenue Service. Read on for more on these tax incentives for eco-friendly drivers.

Discounted Tax Rates on Ethanol Fuel

Alaska discounts the tax rate on fuel blended with alcohol by $.06 per gallon—compared to other motor fuels—during the months that it requires the sale, transfer, and use of ethanol fuel. This effort takes place in certain areas as part of Alaska's goal to attain air quality standards for carbon monoxide in line with either federal or state law regulation. For specifics on this tax rate cut, refer to Alaska Statutes (Chapter 43.40.010).

Federal Tax Credits

Although Alaska doesn't offer much in terms of state tax breaks for buying a fuel-efficient vehicle, the IRS offers sizable federal tax credits if you purchase any of the following:

  • Electric cars (EV).
  • Hybrids.
  • Plug-in hybrids (PHEV).
  • Diesels.
  • Alternative fuels vehicles (AFV).

Find out if you're eligible via the Tax Incentive Information Center at If you need help navigating tax incentives when it comes time to file, consult a tax professional, the AK Tax Division, or your local IRS Taxpayer Assistance Center.

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