Five states have no sales tax at all
Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge a statewide sales tax. If you live in one of these states, you will not pay sales tax when you buy most goods at a store or online. Some of these states do tax specific items — Alaska taxes alcohol and tobacco, New Hampshire taxes meals and rooms — but they do not tax general retail purchases the way other states do.
This does not mean everything is tax-free. Property tax, income tax, and other fees still apply in these states. The absence of sales tax is one piece of a state's overall tax structure, not a sign that the state has no taxes at all.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon collect no statewide sales tax on retail goods.
- Some of these states tax specific categories like food, alcohol, or hotel rooms, even though they have no general sales tax.
- No sales tax does not mean no other taxes — these states may charge income tax, property tax, or business taxes instead.
- If you buy something online from a no-sales-tax state and have it shipped to you, the tax you owe depends on where you live, not where the seller is located.
What each no-sales-tax state actually taxes
Alaska has no sales tax but does tax alcohol, tobacco, and marijuana. Some municipalities add their own local sales taxes on top of the state rate of zero, so a purchase in Anchorage or Juneau may be taxed even though the state does not tax it. Alaska also charges income tax on certain types of income, though the rate is lower than many states.
Delaware has no sales tax and no local sales tax anywhere in the state. It does charge income tax on wages and business income. Delaware is often used as a business address for this reason, though you must actually live or operate there to avoid sales tax on your purchases.
Montana has no sales tax but does tax groceries, prepared food, and certain services. It also charges income tax. The state taxes lodging and rental cars at a higher rate than other purchases.
New Hampshire has no sales tax but does tax meals at restaurants and hotel rooms. It also taxes rental cars. New Hampshire has no income tax on wages, which is unusual — most no-sales-tax states do tax income.
Oregon has no sales tax but does tax some services and specific goods. It charges income tax on wages and business income. Oregon also taxes marijuana sales at a higher rate than other states.
How sales tax works when you buy from out of state
If you live in a state with sales tax and buy something from a seller in Alaska, Delaware, Montana, New Hampshire, or Oregon, you still owe sales tax — but you owe it to your own state, not to the seller's state. This is called use tax. In practice, most online sellers now collect sales tax based on where you live, so the tax appears at checkout even if the seller is in a no-sales-tax state.
If you live in one of these five states and buy from a seller in a state that does charge sales tax, the seller will usually not charge you sales tax if you provide proof that you live in a no-sales-tax state. Some sellers ask for a tax exemption certificate or a copy of your ID showing your address.
Why some states have no sales tax
States without sales tax typically rely more heavily on income tax, property tax, or business taxes to fund government services. New Hampshire and Alaska have no income tax, so they depend on other revenue sources. Delaware has no sales tax partly because of its history as a business-friendly state, though it does tax income.
The choice to have no sales tax is a state policy decision made by the legislature. It does not mean the state has less tax overall — it means the tax burden is distributed differently. A state with no sales tax but high income tax may actually collect more total tax from residents than a state with both sales and income tax.
Local taxes in no-sales-tax states
Even though the state does not charge sales tax, some cities and counties in Alaska add their own local sales taxes. This means you might pay sales tax in Anchorage but not in another part of Alaska. Delaware and Oregon have no local sales taxes anywhere in the state. Montana and New Hampshire also do not allow local sales taxes.
If you are moving to or doing business in Alaska, check your specific city or borough, because local rates vary. In the other four states, you can assume no local sales tax will be added to your purchase.
What happens if you move to a no-sales-tax state
If you relocate to one of these states, you will not pay sales tax on purchases you make there. You will still owe income tax if the state charges it — New Hampshire and Alaska do not tax wages, but the other three do. You may also owe property tax on a home or land you own.
Some people move to these states partly for the sales tax savings, but the overall tax burden depends on your income, property value, and spending habits. A person with high income may pay more total tax in a no-income-tax state than in a state with both income and sales tax.
Frequently Asked Questions
If I buy something online from Amazon and live in Oregon, do I pay sales tax?
No. Amazon collects sales tax based on where you live. If you live in Oregon, no sales tax is charged. If you live in another state, Amazon charges that state's sales tax rate, regardless of where Amazon's warehouse is located.
Can I use a no-sales-tax state address to avoid paying sales tax?
No. Sales tax is based on where you live or where the item is delivered, not on the address you provide to a seller. Using a fake address to avoid sales tax is tax evasion. If you actually move to a no-sales-tax state and establish residency there, you will not owe sales tax on purchases made in that state.
Does New Hampshire really have no income tax?
New Hampshire has no tax on wages or salaries. It does tax interest and dividend income, and it taxes meals and hotel rooms. Most residents do not pay income tax on their paychecks, which is why New Hampshire is known as a no-income-tax state.
Are there any other states without sales tax?
No. Only these five states have no statewide sales tax. Some other states have very low sales tax rates — Colorado, Georgia, and Louisiana are around 4 percent — but they all charge at least some sales tax.