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, you pay only the price on the tag — no additional percentage added at checkout.

However, the absence of a statewide tax does not mean these states are tax-free. Some allow local sales taxes, others tax specific goods like groceries or fuel differently, and most rely on other revenue sources like income tax or property tax to fund services.

If you live in or are moving to one of these states, understanding how the tax structure works matters for budgeting and knowing what you actually pay for everyday purchases.

Key Takeaways

  • Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though some allow local sales taxes on certain items.
  • Alaska and Montana allow local sales taxes in some cities and counties, so your actual tax rate depends on where you shop.
  • Delaware, New Hampshire, and Oregon have no sales tax anywhere in the state, including local taxes.
  • Most no-sales-tax states fund government services through income tax, property tax, or other sources instead.

How each no-sales-tax state handles local taxes

Alaska has no statewide sales tax, but cities and boroughs can impose local sales taxes. Anchorage charges 3.5 percent, Juneau charges 5 percent, and some smaller communities charge between 1 and 7.5 percent. If you live in an unincorporated area, you may pay no local tax at all. The rate depends entirely on where you are shopping.

Montana has no statewide sales tax, but some cities and counties charge local taxes ranging from 0 to 3 percent. Missoula, for example, charges 3 percent, while other areas charge nothing. Like Alaska, your actual tax burden depends on your location.

Delaware, New Hampshire, and Oregon have no sales tax at any level — not statewide and not local. When you buy something in these states, there is no sales tax added, period.

What these states tax instead

States without sales tax still need revenue to pay for schools, roads, and services. They use different methods:

New Hampshire relies heavily on property tax and a tax on business profits. It has no income tax on wages, which is why it attracts residents from neighboring states.

Oregon has no sales tax but charges income tax on wages and business income. The income tax rate ranges from 4.75 to 9.9 percent depending on your earnings.

Delaware has no sales tax but charges income tax on wages (ranging from 2.2 to 5.75 percent) and corporate income tax. It is also known for corporate-friendly tax laws, which is why many companies incorporate there.

Alaska has no income tax and no statewide sales tax. It funds services through oil revenue, property taxes, and other sources. This combination makes Alaska one of the lowest-tax states overall.

Montana has no sales tax but charges income tax on wages (ranging from 1 to 6.9 percent) and property tax. Some goods like groceries are taxed differently or not at all in certain contexts.

Special items taxed or exempt in no-sales-tax states

Even in states with no sales tax, certain items may be taxed or treated differently. For example, some states tax groceries, fuel, or prepared food at a different rate than other goods, or tax them not at all.

In Montana, groceries are generally not subject to sales tax (though there is no statewide sales tax anyway). Fuel is often taxed through excise taxes rather than sales tax.

In Alaska, local sales taxes may apply to groceries and fuel depending on the city or borough. Anchorage, for instance, taxes groceries at the same rate as other goods.

In Oregon, Delaware, and New Hampshire, the absence of sales tax means these distinctions matter less, though other taxes (like fuel excise taxes) still apply.

How to find your exact tax rate if you live in Alaska or Montana

If you live in Alaska or Montana, your sales tax rate depends on your city or county. You can find this information by contacting your local tax assessor's office or checking your city or county government website.

When you move to a new city within these states, your tax rate may change. If you are relocating for work or housing, ask your new employer or landlord what the local sales tax rate is — it affects your actual cost of living.

Online retailers sometimes calculate tax based on your shipping address, so knowing your local rate helps you understand what you will pay at checkout.

Why some people move to no-sales-tax states

The absence of sales tax attracts people who want to keep more of their money on everyday purchases. However, this benefit is often offset by other taxes. Someone moving to Oregon saves on sales tax but pays income tax. Someone moving to New Hampshire saves on sales tax and income tax but may pay higher property tax.

The real tax burden depends on your personal situation — how much you earn, what you own, and where you shop. A retiree living on investment income might benefit from New Hampshire's lack of income tax. A high earner might pay more in Oregon's income tax than they save on sales tax. Comparing total tax burden across states requires looking at your specific circumstances, not just sales tax alone.

Frequently Asked Questions

Do I pay sales tax online if I buy from a no-sales-tax state?

Not necessarily. If you live in a state with sales tax and order from a retailer in Oregon or Delaware, you typically do not pay sales tax. However, if the retailer has a physical presence in your state, they may charge your state's sales tax. The rule depends on the retailer's location and your state's laws, not where the seller is based.

Can I save money by shopping in Alaska or Montana to avoid sales tax?

Only if you live in an area with no local sales tax. In Anchorage, Alaska, you still pay 3.5 percent tax. In Missoula, Montana, you pay 3 percent. If you live in an unincorporated area of Alaska or a low-tax county in Montana, you may save money, but the benefit varies by location.

Do these states have income tax?

Alaska has no income tax. Montana, Oregon, and Delaware all have income tax. New Hampshire has no income tax on wages but taxes business profits and investment income. The absence of sales tax does not mean the state has no taxes overall.

What about groceries — are they taxed in no-sales-tax states?

In states with no sales tax, groceries are not subject to sales tax either. However, some local taxes in Alaska and Montana may apply to groceries depending on your city or county. Check with your local government to know for certain.

If I move to one of these states, will my cost of living go down?

Not automatically. While you save on sales tax, you may pay more in income tax, property tax, or other fees. The total tax burden depends on your income, what you own, and where you live within the state. Compare your full tax picture before moving based on your personal finances.