Five states do not charge sales tax on most purchases
Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax. That means when you buy something in these states, you pay only the price on the tag — no additional percentage added at checkout. However, the full picture is more complicated. Alaska allows cities and boroughs to charge local sales tax even though the state does not. Some of these local taxes are as high as 7.5 percent. Delaware, Montana, New Hampshire, and Oregon have no local sales tax either, making them the only truly sales-tax-free states in the country.
If you live in one of these states or are planning to move, understanding how the absence of sales tax affects your budget matters. It also matters if you order items online from out of state, because your home state's tax rules still apply to your purchase — not the rules of the state where the seller is located.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, but Alaska residents may still pay local sales tax depending on their city or borough.
- Delaware, Montana, New Hampshire, and Oregon have no sales tax at any level — state or local.
- Buying something online from a seller in a no-sales-tax state does not mean you avoid tax; your home state's tax rules apply instead.
- Some of these states tax other things instead, such as income or property, so the overall tax burden varies by state.
Alaska: No state tax, but local taxes vary by location
Alaska has no statewide sales tax, but this does not mean Alaskans pay nothing at the register. Cities and boroughs throughout Alaska can and do charge local sales tax. Anchorage charges 3.7 percent. Juneau charges 5 percent. Fairbanks charges 6 percent. Some smaller towns charge as much as 7.5 percent. If you live in an unincorporated area of Alaska, you may pay no local tax at all.
The tax rate you pay depends entirely on where you live within the state. Before moving to Alaska or making a large purchase, check with your city or borough's tax assessor's office to find out the exact rate in your area. The rate can also change, so it is worth confirming the current number rather than relying on an older figure.
Delaware, Montana, New Hampshire, and Oregon: Completely tax-free at checkout
These four states have no sales tax at the state level and no local sales tax either. When you buy something in Delaware, Montana, New Hampshire, or Oregon, you pay exactly what the price tag says. There is no additional percentage added at the register, and no local government adds a tax on top.
This does not mean these states collect no tax revenue. Delaware has a corporate income tax and a gross receipts tax on certain businesses. Montana and Oregon tax income. New Hampshire taxes income from dividends and interest (though not wages). All four states also collect property tax. The absence of sales tax simply means they fund state and local government through other means.
How online purchases work in no-sales-tax states
If you order something online from a company located in Alaska, Delaware, Montana, New Hampshire, or Oregon, you might assume you avoid sales tax. You do not. The tax rule that applies is based on where you live, not where the seller is located. If you live in a state that charges sales tax, you owe that tax on your purchase — even if you bought from a seller in a no-sales-tax state.
Most online retailers now collect sales tax based on the buyer's address. If you live in a state with sales tax and order from a no-sales-tax state, the retailer will likely add your home state's tax to your bill. If you live in one of the five no-sales-tax states and order from anywhere, you typically pay no sales tax (though you should verify this with the retailer, since rules can vary by company and product type).
Comparing total tax burden across these states
The absence of sales tax does not automatically mean you pay less tax overall. Each state funds itself differently, and the total amount you pay in state and local taxes depends on income tax, property tax, and other fees.
| State | Sales Tax | Income Tax | Property Tax |
|---|---|---|---|
| Alaska | None (local varies) | None | Low to moderate |
| Delaware | None | Yes | Low |
| Montana | None | Yes | Low to moderate |
| New Hampshire | None | Limited (interest/dividends only) | High |
| Oregon | None | Yes | Low to moderate |
New Hampshire, for example, has no sales tax and very limited income tax, but property taxes are among the highest in the nation. Alaska has no income tax and no statewide sales tax, but property tax varies widely by borough. If you are considering a move based on tax burden, look at all three categories — sales, income, and property — not just sales tax alone.
What to know if you are moving to a no-sales-tax state
If you are relocating to one of these states, the absence of sales tax will show up immediately in your everyday purchases. Groceries, clothing, gas, and restaurant meals will cost less at the register than they would in a sales-tax state. However, you should also research the income tax and property tax rates in your specific location, because those will affect your overall tax bill.
If you are moving to Alaska, find out the local sales tax rate for your city or borough before you arrive. If you are moving to Delaware, Montana, New Hampshire, or Oregon, you can count on no sales tax anywhere in the state, but confirm the income and property tax situation for your specific circumstances. Speaking with a tax professional or your state's revenue department can help you understand the full picture.
Frequently Asked Questions
Do I pay sales tax if I order online from a no-sales-tax state?
No. The tax that applies is based on where you live, not where the seller is. If you live in a state with sales tax, you owe that tax on your purchase. If you live in a no-sales-tax state, you typically do not pay sales tax on the order.
Does Alaska have sales tax?
Alaska has no statewide sales tax, but many cities and boroughs charge local sales tax ranging from 0 to 7.5 percent. Your rate depends on where you live within the state. Check with your local tax assessor to find out the exact rate in your area.
Which no-sales-tax state has the lowest overall taxes?
That depends on your income and property situation. Alaska has no income tax and no statewide sales tax, making it attractive for high earners. New Hampshire has no sales tax and no income tax on wages, but property taxes are very high. Compare all three tax types for your specific situation.
Can I avoid sales tax by moving to one of these states?
You can avoid sales tax, but you may pay more in income or property tax instead. These states fund government through other means. Calculate your total tax burden — sales, income, and property combined — before deciding to move based on tax considerations.
Do these states tax groceries or medicine?
Since these states have no sales tax, groceries and medicine are not taxed at all. In states that do have sales tax, groceries and medicine are often taxed at a lower rate or exempted entirely, but the rules vary by state.