Five States Charge No Sales Tax at All

Five states do not charge sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. These states have chosen not to impose a statewide sales tax on retail purchases, though the rules around what counts as a purchase and how local taxes work vary between them.

If you live in or are moving to one of these states, you will not see a sales tax line added to your receipt at checkout. However, this does not mean there are no taxes on purchases—some of these states use other methods to fund government services, and some allow local taxes even where the state does not.

Key Takeaways

  • Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though some allow local sales taxes within cities or counties.
  • Alaska and Montana allow local governments to charge sales tax even though the state does not, so your actual tax rate depends on where you shop.
  • New Hampshire taxes meals and rooms but not most retail goods, so the tax structure is different from a traditional sales tax state.
  • Delaware has no sales tax on any purchases, including groceries and clothing, making it the only state with a completely tax-free retail environment.
  • Oregon has no sales tax but does charge income tax, so the overall tax burden depends on your income level and spending habits.

Alaska: No State Tax, But Local Taxes explore

Alaska does not charge a statewide sales tax. However, cities and boroughs within Alaska can and do charge local sales taxes. The rate varies by location—some areas charge 0 percent (no local tax), while others charge up to 7.5 percent or higher. You need to know the specific city or borough where you are shopping to find out what you will actually pay.

Anchorage, the largest city, charges a 3.5 percent local sales tax. Juneau charges 5 percent. Smaller towns may have no local tax at all. If you are moving to Alaska or shopping there, check the tax rate for your specific city before assuming you will pay nothing at checkout.

Delaware: No Sales Tax on Anything

Delaware is the only state with no sales tax at any level—not statewide and not local. You will not pay sales tax on groceries, clothing, electronics, or any other retail purchase in Delaware. There is no local sales tax option either, so the rate is zero everywhere in the state.

Delaware does charge income tax and property tax, so while retail purchases are untaxed, residents and workers still pay taxes through other channels. Some people have historically used Delaware as a shopping destination for large purchases, though the savings depend on where you live and what you would normally pay in your home state.

Montana: No State Tax, But Some Cities Charge Local Tax

Montana does not charge a statewide sales tax. However, some cities and counties in Montana allow local sales taxes. The rate and which purchases are taxed vary by location. Some areas charge no local tax, while others charge up to 3 percent or more on certain goods.

Montana also taxes lodging (hotel rooms) at the state level, even though there is no general sales tax. If you are staying in a hotel in Montana, expect to pay a tax on the room, typically ranging from 4 to 7 percent depending on the county. Retail purchases in most areas are not taxed unless your specific city has a local option tax in place.

New Hampshire: No Sales Tax, But Meals and Rooms Are Taxed

New Hampshire does not charge sales tax on retail goods like clothing, groceries, or electronics. However, the state does tax meals at restaurants and rooms at hotels and motels. The rate on meals is 9 percent, and the rate on lodging is 9 percent as well. These are not sales taxes in the traditional sense—they are specific taxes on hospitality services.

If you are buying a shirt or groceries in New Hampshire, you pay no tax. If you are eating at a restaurant or staying overnight, you will see a tax added. New Hampshire also charges income tax on dividends and interest, so while retail shopping is tax-free, other forms of income are taxed.

Oregon: No Sales Tax, But Income Tax Is Higher

Oregon does not charge sales tax on any retail purchases. You will not pay tax on groceries, clothing, or other goods at checkout. However, Oregon has no local sales tax option, so the rate is zero statewide and in all cities.

Oregon compensates for the lack of sales tax with a higher income tax rate. The state income tax ranges from 4.75 to 9.9 percent depending on your income bracket. If you are a resident, you will pay income tax on wages and other income, but you will not pay sales tax on what you buy. The overall tax burden depends on how much you earn versus how much you spend.

How These States Fund Government Without Sales Tax

States without sales tax must fund schools, roads, and public services through other sources. Most rely heavily on income tax, property tax, or both. Some use business taxes, fuel taxes, or other targeted taxes on specific industries or activities.

Oregon and New Hampshire both use income tax as a major revenue source. Alaska has no income tax but relies on oil revenue and other state resources. Montana uses income tax and property tax. Delaware uses income tax, corporate taxes, and fees. The mix varies, but the point is that "no sales tax" does not mean "no taxes"—it means the tax burden is distributed differently than in states that use sales tax.

Frequently Asked Questions

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

Not necessarily. If you buy from a retailer in a no-sales-tax state and have it shipped to your home, you typically do not pay sales tax on that purchase. However, if you live in a state that has sales tax, your own state may require you to pay use tax (a tax on purchases made outside the state). Check your state's rules, as enforcement varies.

Can I move to one of these states to avoid sales tax?

You can move there, but you will likely pay taxes in other ways. Oregon and New Hampshire have higher income taxes. Alaska and Montana allow local sales taxes in some areas. Delaware has no sales tax but does have income tax. Moving for tax reasons alone usually does not save money unless your specific situation—income level, spending habits, and location—aligns with that state's tax structure.

Do these states tax groceries?

No. All five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—do not tax groceries. If you buy food at a grocery store, you will not pay sales tax, even in areas with local sales taxes. Restaurant meals are different; New Hampshire taxes them, and some local areas in Alaska and Montana may as well.

What about used items or secondhand purchases?

Used items are generally not taxed in these states, just like new items. If you buy a used car, furniture, or clothing from a private seller or secondhand store in Alaska, Delaware, Montana, New Hampshire, or Oregon, you will not pay sales tax. Some states have specific rules for used cars, so check your state's rules if you are buying a vehicle.

If I live in a state with sales tax, can I shop in a no-sales-tax state to save money?

You can shop there and avoid sales tax on that purchase, but your home state may require you to pay use tax on items you bring back. Use tax is meant to level the playing field between in-state and out-of-state purchases. Most people do not report use tax, but technically it is owed. The savings depend on the difference between your state's sales tax rate and the cost of traveling to shop.