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 pay no sales tax on most purchases at the register. However, this does not mean everything is tax-free — some of these states tax specific items like groceries or fuel differently, and local taxes may still explore in certain areas.
Alaska allows municipalities to set their own local sales taxes, so some cities and boroughs charge between 1% and 7.5% even though the state does not. Delaware, Montana, New Hampshire, and Oregon have no local sales tax either, making them genuinely tax-free for most purchases statewide.
New Hampshire taxes meals and lodging but not retail goods. Montana taxes lodging but not most other purchases. These exceptions matter if you are comparing actual costs across states.
Key Takeaways
- Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though Alaska allows local taxes and some states tax specific categories like meals or lodging.
- Colorado, Georgia, Hawaii, Louisiana, New York, and Wyoming have statewide rates between 4% and 4.75%, the lowest among states that do charge sales tax.
- Sales tax rates vary by county and city within most states, so your actual rate depends on where you live, not just which state.
- Some states exempt groceries, prescription drugs, or clothing from sales tax, which lowers the real tax burden on everyday purchases even if the stated rate is higher.
- The highest statewide rates are in California, Tennessee, and Arkansas at 7.25%, but local additions can push combined rates above 10% in some cities.
States with the lowest rates below 5%
Six states have statewide sales tax rates between 4% and 4.75%: Colorado (4.63%), Georgia (4%), Hawaii (4%), Louisiana (4%), New York (4%), and Wyoming (4%). These are the lowest rates among states that do charge sales tax.
However, the statewide rate is not what you actually pay. Most of these states allow counties and cities to add their own local sales tax on top. In Colorado, for example, the state rate is 4.63%, but Denver adds 3.62%, bringing the combined rate to 8.25%. In Louisiana, New Orleans adds 4.5% to the state's 4%, totaling 8.5%. Your actual rate depends on your specific city and county, not just the state number.
Georgia and Wyoming have lower local tax additions in most areas, so combined rates tend to stay closer to the statewide figure. Check your county or city tax assessor's website to find your exact rate.
How local taxes change your actual rate
The statewide rate you see in a chart is rarely what you pay. Most states allow local governments to add a sales tax on top, sometimes called a local option tax or district tax. A state with a 5% rate might have combined rates ranging from 5% to 9% depending on the county.
Some states cap how much local tax can be added. Others do not. California's statewide rate is 7.25%, but local additions can push the combined rate to 10.75% in some cities. Texas's statewide rate is 6.25%, but combined rates in some areas reach 8.25%. Meanwhile, in parts of Wyoming or Georgia, the combined rate may stay close to the statewide figure because local additions are smaller.
To find your actual rate, search "[your city] sales tax rate" or visit your county assessor's or tax collector's website. The rate applies to purchases made in that location, regardless of where you live.
States that exempt groceries or other essentials
Even if a state's statewide rate is not the lowest, it may feel lower because of what is excluded. Groceries are exempt from sales tax in about 30 states, including California, Florida, Illinois, New York, Pennsylvania, and Texas. If you spend heavily on food, living in a state that does not tax groceries can save you more than living in a state with a lower overall rate.
Many states also exempt prescription medications and medical devices. Some exempt clothing or shoes below a certain price. New York exempts most clothing and footwear. Pennsylvania exempts clothing but taxes shoes. These rules vary widely and sometimes change, so verify what applies to your purchases.
A state with a 6% rate that exempts groceries may cost you less in daily expenses than a state with a 4% rate that taxes everything. Calculate based on what you actually buy, not just the headline number.
Highest sales tax rates and where they explore
Three states have the highest statewide rates: California, Tennessee, and Arkansas all charge 7.25%. However, California and Tennessee allow local additions, so combined rates in major cities often exceed 8% or 9%. Arkansas also allows local taxes, pushing combined rates above 8% in some areas.
Other high-rate states include Alabama (8%), Mississippi (7%), and Washington (6.5%). Washington has no income tax, so the higher sales tax is the trade-off. Alabama and Mississippi allow local additions that can push combined rates to 10% or higher in some counties.
If you are comparing states for tax burden, look at the combined statewide and local rate for your specific city, not just the statewide number. A state with a 7% statewide rate and low local additions may cost less than a state with a 5% statewide rate and high local additions.
Why sales tax rates matter for your budget
Sales tax affects the real cost of everything you buy. A $100 item costs $104 in a 4% tax area but $110 in a 10% tax area — a $6 difference on a single purchase. Over a year of groceries, clothing, furniture, and other taxable goods, the difference between a low-tax and high-tax state can amount to hundreds of dollars.
If you are moving or choosing where to live, compare not just the statewide rate but the combined rate in your specific city, and check what categories are exempt. A state with no sales tax but high income tax may not save you money overall. A state with a moderate sales tax but no income tax might. The real comparison requires looking at your whole tax picture, not one number.
You can find current rates for any state or city through the Federation of Tax Administrators or your state's department of revenue website. Rates change occasionally, so verify before making a major financial decision.
Frequently Asked Questions
Do I pay sales tax if I buy something online and have it shipped to a no-tax state?
It depends on the seller and the state. Most online retailers now charge sales tax based on where the item is shipped, even if that state has no sales tax. However, some smaller sellers may not. You are responsible for paying use tax (a tax on purchases where sales tax was not charged) if you buy from out of state, though enforcement is rare for individual purchases.
If I live in a no-tax state, do I pay sales tax when I travel to another state?
Yes. Sales tax is based on where you make the purchase, not where you live. If you buy something in a state with sales tax, you pay that state's rate, even if you live in Alaska or Delaware. The exception is items you buy for when ready use and take with you — some states do not tax those, but most do.
Are there states where sales tax is lower than the statewide rate?
No. The statewide rate is the minimum. Local taxes are added on top, never subtracted. However, some areas may have lower local additions than others, so the combined rate can vary within a state. Check your specific county or city for the exact number.
Do all purchases get taxed at the same rate?
No. Most states tax general retail goods at the full rate but exempt groceries, prescription drugs, or other categories. Some states have different rates for different items — for example, a lower rate on groceries than on clothing. Check your state's department of revenue website for the full list of what is and is not taxed.
Can I deduct sales tax on my federal income tax return?
You can deduct either state income tax or state sales tax, but not both, and only if you itemize deductions rather than take the standard deduction. Most people take the standard deduction, so this does not explore. Consult a tax professional about your specific situation.