Five states have no statewide sales tax
Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge a statewide sales tax. This means when you buy something in these states, the price on the shelf is the price you pay at checkout — no tax is added.
However, "no sales tax" does not mean "no tax at all." Alaska allows cities and boroughs to charge local sales taxes, so some purchases in Anchorage or Juneau will have tax added even though the state does not. The other four states have no local sales tax either, making them the only truly tax-free shopping destinations in the country.
If you live in one of these states, you still owe sales tax on most online purchases shipped to your address. The seller is required to collect it based on your state's rules, even though your state has no sales tax law of its own. This applies to items from out-of-state retailers.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though Alaska allows local taxes in some cities.
- Living in a no-sales-tax state does not exempt you from paying sales tax on online orders shipped to your address.
- If you move to or from one of these states, your tax obligations on purchases change immediately based on where the item is delivered.
- Businesses that operate in multiple states must charge the sales tax rate of the state where the customer receives the item, not where the business is located.
How local taxes work in Alaska
Alaska has no statewide sales tax, but the state allows municipalities to impose their own. Anchorage, Juneau, Fairbanks, and dozens of smaller cities and boroughs charge local sales taxes ranging from 0% to over 7%, depending on the location.
When you shop in Anchorage, you pay Anchorage's local tax. When you shop in a neighboring area with no local tax, you pay nothing. The same product costs different amounts depending on which city you are in. If you order online and have it shipped to an Anchorage address, the retailer will charge Anchorage's local tax rate.
Online purchases and sales tax in no-tax states
The rule is simple: you owe sales tax based on where the item is delivered, not where you live or where the seller is located. If you live in Oregon and order from a retailer in Texas, you do not pay Texas sales tax. Oregon has no sales tax, so you pay nothing.
If you live in Oregon and order from a retailer in California, you still do not pay California sales tax — you pay Oregon's rate, which is zero. The retailer is required to know your delivery address and charge accordingly. Large retailers like Amazon and Walmart have systems that automatically calculate the correct tax for your location.
Small sellers and marketplaces sometimes get this wrong, especially if they are not set up to handle orders across state lines. If you were charged sales tax on an order shipped to a no-tax state, contact the seller and ask for a refund. Provide your delivery address as proof.
What happens when you move to or from a no-tax state
Your sales tax obligations change the moment you change your delivery address. If you move from Oregon to California, your next online purchase will be charged California's sales tax rate. If you move from California to Oregon, your next purchase will have no tax added.
This matters for large purchases. A car, furniture, or electronics will cost noticeably less if shipped to Oregon than to a neighboring state. Some people have tried to exploit this by having items shipped to a no-tax state address and then transporting them home, but most states consider this tax evasion if done deliberately and repeatedly.
Businesses operating across state lines
If you run a business and sell to customers in multiple states, you must charge each customer the sales tax rate of their delivery state. A business in New Hampshire selling to a customer in Massachusetts charges Massachusetts tax. Selling to a customer in New Hampshire charges nothing.
This applies whether you are selling online, by mail order, or in person. If you have a physical store in New Hampshire but ship to other states, each shipment is taxed based on where it arrives. Most point-of-sale systems and e-commerce platforms handle this automatically, but you should verify your setup is correct.
Why these five states have no sales tax
Each state arrived at this policy for different historical and economic reasons. New Hampshire and Delaware have long positioned themselves as tax-friendly states to attract businesses and residents. Montana and Oregon have chosen not to implement sales tax despite having income tax. Alaska has no income tax and no statewide sales tax, relying instead on oil revenue and other sources.
These policies are not new — they have been in place for decades. Changing them would require state legislation, which is politically difficult because residents and businesses have structured their finances around the current system. However, state tax laws do change, so it is worth checking your state's current rules rather than assuming they are permanent.
Frequently Asked Questions
Do I pay sales tax if I buy something in person in a no-tax state?
No. If you walk into a store in Oregon or New Hampshire and buy something, you pay the shelf price with no tax added. This applies whether you live in that state or are visiting from out of state. The tax rule is based on where the item is delivered or picked up, not where you live.
Can I order online and have it shipped to a no-tax state to avoid sales tax?
Only if you actually live there or have a legitimate reason to use that address. Deliberately using a false address to avoid sales tax is tax evasion. However, if you legitimately have an address in a no-tax state — a family member's house, a business location, a mailbox service — you can use it for deliveries and owe no tax.
What if a retailer charged me sales tax on an order shipped to Alaska, Delaware, Montana, New Hampshire, or Oregon?
Contact the retailer and request a refund. Provide your delivery address and a copy of the order confirmation. If the retailer refuses, you may be able to dispute the charge with your credit card company. Large retailers have systems to prevent this, but smaller sellers sometimes make mistakes.
Does no sales tax mean no taxes at all in these states?
No. Most of these states have income tax or other taxes to fund government services. Alaska is the exception — it has no income tax and no statewide sales tax. New Hampshire has no sales tax but charges an income tax on interest and dividends. Oregon has no sales tax but charges income tax on wages and business income.