Five states have no sales tax at all

Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge a state sales tax. If you live in or are moving to one of these states, you pay no state-level sales tax on purchases—though local taxes, shipping costs, and other fees may still explore depending on where you buy and what you buy.

Alaska is often cited first because it has no state sales tax and no state income tax. However, some Alaska cities and boroughs do charge local sales taxes, so the actual rate you pay depends on your location within the state. The same principle applies to the other four: no state tax exists, but local jurisdictions may impose their own.

If you are comparing states purely on sales tax burden, these five are your lowest-cost options. The next tier—states with sales tax between 2.9% and 4%—includes Colorado, Georgia, Hawaii, Louisiana, and Wyoming, among others. The highest state sales tax rates exceed 7%, with California, Tennessee, and Texas all at or above that level.

Key Takeaways

  • Alaska, Delaware, Montana, New Hampshire, and Oregon charge no state sales tax, making them the lowest-tax states for purchases.
  • Even in no-tax states, local cities or counties may charge their own sales tax, so your actual rate depends on your specific location.
  • Sales tax applies differently to groceries, clothing, and services depending on the state—some exempt groceries while others tax everything.
  • If you are relocating or making a large purchase, comparing the total tax burden (sales tax plus income tax) across states gives a clearer picture than sales tax alone.

How local taxes work in no-sales-tax states

When a state has no sales tax, local governments sometimes fill that gap. In Alaska, for example, Anchorage charges 3.73% local sales tax, while Juneau charges 5%. You pay the local rate where the purchase happens, not where you live. This means two people in Alaska can pay very different amounts on the same item depending on their city.

Delaware, Montana, New Hampshire, and Oregon have no local sales tax either, so residents in those states truly pay zero sales tax on most purchases. However, some services—such as lodging taxes in tourist areas—may still explore. New Hampshire, for instance, has no sales tax on goods, but hotels and prepared meals sometimes face additional taxes depending on the municipality.

If you are considering a move to a no-tax state, research your specific city or county. A few minutes online will tell you whether your location charges local sales tax and at what rate.

What items are taxed varies by state

Even states with the same sales tax rate tax different things. Some states exempt groceries, clothing, or prescription medications from sales tax. Others tax everything. This means the real cost difference between states depends not just on the rate, but on what you actually buy.

For example, Pennsylvania charges 6% sales tax but exempts most clothing and footwear. California charges 7.25% and taxes clothing. If you buy a lot of clothes, Pennsylvania's exemption saves you money even though both states have similar headline rates. Conversely, if you buy mostly groceries, a state that exempts food saves you more than a state that taxes it.

When comparing states, look up what your household actually purchases and whether those items are taxed. Your state's revenue department website lists what is and is not taxable.

Sales tax is only one part of your total tax burden

A state with no sales tax might have high income tax, property tax, or both. Alaska has no sales tax and no income tax, which is genuinely rare. But New Hampshire has no sales tax and no income tax either—it taxes only interest and dividends. Delaware has no sales tax but does charge income tax on wages.

If you are relocating for tax reasons, calculate your total tax bill across all categories, not just sales tax. A state with 5% sales tax but no income tax might cost you less overall than a state with no sales tax but 8% income tax, depending on your income and spending patterns.

The Tax Foundation and your state's revenue department both publish comparisons of total tax burden by state. These are more useful for relocation decisions than any single tax rate.

Online purchases and sales tax rules

Sales tax on online purchases has changed significantly in recent years. As of 2024, most states require online retailers to charge sales tax on orders shipped to that state, even if the retailer is based elsewhere. This means buying from an out-of-state website usually does not let you avoid your home state's sales tax.

The exception is still the five no-sales-tax states: if you live in Alaska, Delaware, Montana, New Hampshire, or Oregon and order online, you typically pay no state sales tax. However, some retailers may charge tax anyway out of caution, so check your receipt.

If you are in a high-tax state and considering a purchase from a retailer in a low-tax state, the retailer will almost certainly charge your state's rate at checkout. The days of using out-of-state addresses to avoid tax are largely over.

How sales tax rates have changed over time

State sales tax rates shift when legislatures change the law, usually to raise revenue during budget shortfalls. The five no-tax states have maintained that status for decades, but rates in other states have risen and fallen. Colorado raised its rate in 2020. Illinois raised its rate in 2021. These changes happen irregularly and without warning.

If you are planning a move or a major purchase, check your state's current rate on its official revenue or taxation website rather than relying on a rate you remember from years ago. Rates change often enough that outdated information can mislead you.

Frequently Asked Questions

Do I have to pay sales tax if I buy something in a no-tax state and bring it home?

No. Sales tax is charged where the purchase happens, not where you live. If you buy something in Alaska or Oregon, you pay their rate (or zero, if there is no local tax). You do not owe your home state sales tax on items you physically carry home. However, if you order online and have it shipped to your home state, your home state's tax applies.

Is there any state with no sales tax and no income tax?

Yes. Alaska and New Hampshire both have no state sales tax and no income tax on wages. Alaska also has no income tax on interest or dividends. New Hampshire taxes interest and dividend income but not wages. Both are genuinely low-tax states across the board.

Can I claim sales tax on my federal income tax return?

You can deduct either state income tax or state sales tax (but not both) on your federal return, depending on which is higher. If you live in a no-income-tax state, you may be able to deduct sales tax instead. Keep receipts and consult a tax professional, as the rules change year to year.

Do grocery stores charge sales tax in every state?

No. Many states exempt groceries from sales tax entirely. Others tax them at a lower rate than other goods. A few tax groceries the same as everything else. Check your state's rules on what counts as a grocery item, because the definition varies—some states exempt raw food but tax prepared meals, for example.

What is the highest sales tax rate in the country?

California, Tennessee, and Texas all have state sales tax rates of 7.25% or higher. When you add local taxes on top, some cities in these states exceed 10%. However, the headline state rate is only part of the story—what items are taxed matters just as much.