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 zero sales tax everywhere in those states. Alaska allows municipalities to impose local sales taxes, and some cities and boroughs do. Delaware, Montana, New Hampshire, and Oregon have no local sales taxes either, making them the only four states with truly zero sales tax at every level of government.
The reason these states have no sales tax varies. Some rely more heavily on income tax or other revenue sources. Others, like Alaska, use oil revenue. New Hampshire specifically avoids sales tax but does tax meals and rooms (hotel stays), which is why you might see tax added in those categories even though there is no general sales tax.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though Alaska allows local taxes in some cities.
- Delaware, Montana, New Hampshire, and Oregon have no sales tax at any level — state or local.
- New Hampshire taxes prepared meals and hotel rooms even though it has no general sales tax.
- States without sales tax often rely on income tax, property tax, or other revenue sources instead.
How no sales tax affects your purchases
If you live in or move to one of these states, your out-of-pocket cost at the register is lower than in states with sales tax. A $100 purchase costs $100, not $107 or $108 as it would in a state with 7 or 8 percent sales tax. Over a year, this adds up — especially for large purchases like appliances, vehicles, or furniture.
The tradeoff is usually visible elsewhere in your taxes. States without sales tax typically charge higher income tax, property tax, or both. New Hampshire, for example, has no sales tax and no income tax on wages, but property taxes are among the highest in the nation. Alaska has no income tax and no sales tax in most places, but relies on oil revenue and other state taxes. You may pay less at the register but more through other tax channels.
Sales tax in neighboring states and online purchases
If you live near the border of a no-sales-tax state, you might be tempted to shop there to avoid tax. This works for in-person purchases — you genuinely pay no sales tax when you buy something in person in Delaware or Oregon. However, if you live in a state with sales tax and buy from an online retailer, the retailer is required to charge you your home state's sales tax, regardless of where the retailer is located.
This rule applies even if you order from a company based in a no-sales-tax state. The retailer collects tax based on your shipping address, not their location. The only exception is if the retailer has no physical presence in your state and no legal obligation to collect tax — a rare situation that has become rarer as tax laws have tightened.
Local taxes in Alaska
Alaska has no statewide sales tax, but the state allows cities and boroughs to impose their own. Juneau, Anchorage, Fairbanks, and other municipalities have local sales taxes ranging from about 5 to 7.5 percent. If you shop in Anchorage, you pay the local tax; if you shop in a borough without a local tax, you do not.
This means Alaska is not uniformly tax-free. The tax rate depends on which city or borough you are in. Before making a large purchase in Alaska, check whether your location has a local sales tax and what the rate is.
Special taxes in no-sales-tax states
Even though these states have no general sales tax, some impose taxes on specific items. New Hampshire taxes prepared meals (food served hot or ready to eat) and hotel rooms at rates between 8 and 9 percent. This is why a restaurant bill or hotel stay in New Hampshire includes tax, even though groceries and retail purchases do not.
Montana has no sales tax on most items, but does tax lodging. Alaska's local taxes, where they exist, typically apply to all purchases. Delaware and Oregon have no special taxes — they truly have zero sales tax on everything.
How to find the tax rate where you are
If you are moving to or visiting one of these states, or if you are shopping near a border, you can find the exact tax rate by checking your city or county's tax authority website. Most municipalities post their current sales tax rate online. You can also call the city or county assessor's office and ask directly.
For online purchases, your state's tax authority website will tell you whether you owe sales tax on remote purchases and how to report it. Most states require you to pay "use tax" — a tax on items you buy from out of state — though enforcement varies widely.
Frequently Asked Questions
Do I have to pay sales tax if I buy something online from a no-sales-tax state?
Not if you live in a no-sales-tax state. If you live in a state with sales tax, the online retailer should charge you your state's tax based on your shipping address. If they do not, you may owe use tax to your state, though most people do not report it.
Can I buy something in Oregon and bring it home to avoid sales tax?
Yes, for in-person purchases. If you buy something in Oregon and take it with you, you pay no sales tax. However, some states require you to report and pay use tax on items you bring in from out of state, though this is rarely enforced for personal purchases.
Why do some states have no sales tax?
States choose their tax structure based on revenue needs and policy. Alaska relies on oil revenue. New Hampshire avoids sales tax as a matter of state policy. Others use income tax or property tax instead. There is no single reason — it depends on each state's budget and priorities.
Is New Hampshire really tax-free?
New Hampshire has no sales tax and no income tax on wages, which is unusual. However, it taxes prepared meals, hotel rooms, and has high property taxes. So while you pay less at the register, you may pay more in property tax or when eating out.
Does Alaska's lack of sales tax apply everywhere in the state?
No. Alaska has no statewide sales tax, but cities like Anchorage and Juneau have local sales taxes of 5 to 7.5 percent. Check your specific city or borough to know the rate where you are shopping or living.