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 or buy something from a retailer there, you will not pay sales tax at checkout. This is the simplest tax situation in the country — no state levy, no local add-ons, no exceptions for certain goods.
That said, Alaska and Montana allow individual cities and boroughs to collect local sales taxes even though the state does not. So if you shop in Anchorage, Alaska or Missoula, Montana, you may still see a sales tax line on your receipt. Delaware, New Hampshire, and Oregon have no local sales tax either, making them truly tax-free for most purchases.
The other 45 states all charge some form of sales tax, though the rate and what items are taxed varies widely. Some states exempt groceries, clothing, or prescription drugs. Others tax nearly everything. If you are comparing the true cost of living between states, sales tax is one piece of the picture — but not the only one, since states without sales tax often have higher income tax or property tax to fund schools and services.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though Alaska and Montana allow local sales taxes in some cities.
- Delaware, New Hampshire, and Oregon have neither state nor local sales tax on any purchase.
- States without sales tax often fund services through income tax, property tax, or other levies, so the overall tax burden may not be lower.
- If you shop online from a no-sales-tax state, you may still owe sales tax in your home state depending on where the seller is located and your state's rules.
How local sales tax works in Alaska and Montana
Alaska has no state sales tax, but cities and boroughs can impose their own. Juneau charges 5 percent, Anchorage charges 3.5 percent, and Fairbanks charges 0 percent. The rate depends entirely on where you are shopping, not where you live. If you buy something in Juneau, you pay Juneau's rate; if you buy the same item in Fairbanks, you pay nothing.
Montana works the same way. The state has no sales tax, but cities can levy one. Missoula charges 3 percent, Billings charges 0 percent, and other towns fall in between or have no local tax. Again, the rate is determined by the city where the transaction happens.
This means residents of these states do not have a uniform shopping experience. Your receipt will look different depending on which town you are in. If you are moving to Alaska or Montana or planning a large purchase, check the specific city's rate before you assume you will pay nothing.
Why some states chose not to tax sales
The five no-sales-tax states arrived at that policy through different histories and choices. New Hampshire and Delaware have long marketed themselves as tax havens and have built their economies partly around that reputation — New Hampshire in particular has made low taxes a core part of its identity. Oregon voters have repeatedly rejected sales tax proposals, preferring to fund the state through income tax instead. Alaska uses oil revenue to fund much of its government, reducing the need for sales tax. Montana has historically relied on property and income taxes.
These choices mean each state funds schools, roads, and services differently. New Hampshire and Delaware rely heavily on income tax and business taxes. Oregon has one of the highest income tax rates in the country. Alaska has no state income tax but uses oil dividends. Montana uses property tax and income tax. The absence of sales tax does not mean lower overall taxes — it means the burden is shifted to other sources.
Sales tax on online purchases from no-sales-tax states
If you order something online from a retailer in Alaska, Delaware, Montana, New Hampshire, or Oregon, whether you pay sales tax depends on two things: where the seller is located and where you live.
If the online retailer has a physical presence (a warehouse, office, or store) in your state, they must charge your state's sales tax, even if they are shipping from a no-sales-tax state. If the retailer has no physical presence in your state, they are not required to charge sales tax in most cases — though your state may require you to pay "use tax" on your own tax return, which is rarely enforced for individual purchases.
Large retailers like Amazon now charge sales tax in most states regardless of where they ship from, because they have warehouses in many places. But smaller sellers may not. The rule is: you owe tax based on where you live, not where the seller is. If you do not pay it at checkout, you may owe it when you file your state taxes, though enforcement is uncommon for individual shoppers.
Comparing the true cost of living in no-sales-tax states
A lower or zero sales tax does not automatically mean cheaper living. You have to look at the whole tax picture. New Hampshire has no sales tax and no income tax, which sounds ideal — but property taxes are high, and the state funds schools partly through property tax, so homeowners pay more. Delaware has no sales tax but does charge income tax on wages and investments. Oregon has no sales tax but charges income tax at rates up to 9.9 percent on higher earners.
Alaska has no sales tax and no income tax, which is genuinely unusual. However, the cost of living in Alaska is high for other reasons: shipping costs, limited competition, and the expense of living in a remote state. A gallon of milk or a pair of shoes may cost more in Anchorage than in a neighboring state, even without sales tax.
If you are considering moving to one of these states for tax reasons, research the full picture: income tax, property tax, corporate tax, and the actual prices of goods and services. Sales tax is one line item, not the whole story.
What items are taxed in states that do have sales tax
In the 45 states that charge sales tax, the items subject to tax vary. Most states exempt groceries (unprepared food you cook at home), but some tax them. Most states exempt prescription drugs and medical devices, but a few do not. Clothing is exempt in some states and taxed in others. Prepared food (restaurant meals, takeout) is almost always taxed.
The variation is significant. If you live near a state border, you might cross it to buy clothing or groceries to avoid tax. Some states have "tax-free shopping days" for back-to-school items or other categories, usually lasting a week in late summer. These are state-specific and change year to year.
The point: sales tax is not a flat percentage on everything. What you actually pay depends on what you buy, where you buy it, and what your state and local government have decided to tax. If you are budgeting for a large purchase, check your state's rules for that specific item.
How to find the sales tax rate where you shop
If you live in one of the 45 states with sales tax, you can find your local rate by searching "[your city] sales tax rate" or visiting your state's department of revenue website. Most states list rates by county or city. Some states have a single statewide rate; others layer state tax plus local tax, and the total varies by location.
If you are shopping online, the retailer's website will show the tax before you complete your purchase. If you are shopping in a store, the tax is added at checkout. If you are buying something expensive — a car, furniture, or equipment — ask the seller what the total tax will be before you commit, because the amount can be substantial.
For mail-order or online purchases from out of state, the rules are more complex. As mentioned above, the retailer must charge tax if they have a physical presence in your state. If they do not, you technically owe use tax, but it is rarely collected. Your state's department of revenue website will explain the rules for your specific situation.
Frequently Asked Questions
Do I have to pay sales tax if I buy something in a no-sales-tax state and bring it home?
No. Once you have purchased an item in a state with no sales tax, you do not owe sales tax to your home state. Sales tax is paid where the purchase happens, not where you live. If you buy a coat in New Hampshire and bring it to Massachusetts, you do not pay Massachusetts sales tax on it.
Can I order online from a no-sales-tax state to avoid my state's sales tax?
Not reliably. If the online retailer has a warehouse or office in your state, they must charge your state's sales tax. Most large retailers now do this. Smaller sellers may not, but you technically owe use tax on your state return. Enforcement is rare for individual purchases, but the tax is legally owed.
Does Alaska really have no taxes at all?
Alaska has no state sales tax and no state income tax, which is unusual. However, it does charge property tax, and some cities charge local sales tax. Additionally, the cost of living in Alaska is high for reasons unrelated to taxes, such as shipping costs and limited retail competition.
Why does New Hampshire not have sales tax or income tax?
New Hampshire has chosen to fund state services through other sources, primarily property tax and business taxes. The state has marketed itself as a low-tax destination for decades, and voters have consistently rejected sales tax proposals. This means property owners in New Hampshire pay higher property taxes than in many neighboring states.
If I move to a no-sales-tax state, will my taxes be lower overall?
Not necessarily. States without sales tax fund services through income tax, property tax, or other levies. New Hampshire has high property taxes. Oregon has high income tax. Alaska is expensive to live in for non-tax reasons. Compare the full tax burden — income, property, and sales — before deciding that a no-sales-tax state will save you money.