So you're wondering which states have no sales tax? Honestly, I get this question a lot from folks planning big purchases, considering a move, or just curious about tax policies. I remember when my buddy Dave saved nearly $2,000 buying his engagement ring in Oregon instead of California. That's real money walking out the door.
Let's cut straight to the chase. Only five states in the US truly have zero statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. But - and this is a big but - it's rarely that simple.
Why should you even care? Well, imagine saving 6-10% on every single purchase. Over a year, that adds up to thousands. For retirees living on fixed incomes, businesses buying equipment, or anyone making a major purchase, this is huge.
Still, I gotta tell you - living in one of these states isn't some tax-free paradise. They get their money elsewhere. Let me break down the real picture for you.
The Zero Sales Tax Club: States with No Sales Tax Explained
Here's the complete list of states without a statewide sales tax:
| State | Statewide Sales Tax | Local Taxes Exist? | Major Exceptions | How They Get Revenue |
|---|---|---|---|---|
| Alaska | 0% | Yes | Lodging, Fishing Licenses | Oil revenue, Property tax |
| Delaware | 0% | No | Lodging tax up to 3% | High income tax, Gross receipts tax |
| Montana | 0% | Yes (Resort areas) | Lodging, Car rentals | Income tax, Property tax |
| New Hampshire | 0% | No | Restaurant meals (9%), Rooms tax | High property tax, Business taxes |
| Oregon | 0% | No | Local lodging taxes | High income tax, Property tax |
See that "Local Taxes Exist?" column? That's where people get tripped up. You might pay nothing at Best Buy in Portland, but try booking a hotel room.
Alaska: The Complicated One
Alaska's the poster child for "it depends." No statewide sales tax, sure. But over 100 municipalities impose their own, some as high as 7.5% (looking at you, Homer). Juneau? 5%. Anchorage? 0% as of my last visit. Confusing? You bet.
Where they get you:
- Hotel rooms: Expect 8-12% in tourist areas
- Fishing licenses: 3% state fee
- Car rentals: Local taxes apply
Living there? I won't sugarcoat it - winter is brutal. But man, those PFD checks (oil money dividends) are nice.
Delaware: The Out-of-State Shopper's Dream
Delaware's my go-to for big purchases when visiting family back East. Zero sales tax statewide and no local additions. Their outlets? Packed with license plates from PA, NY, NJ.
But check this out:
- Hotels: Up to 3% local tax
- Businesses pay gross receipts tax (0.1%-2% on total sales)
Personal gripe? Their income tax hits 6.6% pretty quick. Plus property taxes in northern DE surprised me - not as low as folks claim.
Montana: Beware the Resort Towns
Montana feels truly tax-free... until you hit a resort area. Whitefish? Big Sky? Yeah, they tack on up to 3% local option tax.
Watch for:
- Lodging: 3-4% resort tax common
- Camping fees: Some localities tax these
- Rental cars: Local taxes apply
I actually find their resort tax super annoying. You drive through miles of nothing, buy gas tax-free, then get dinged on your hotel.
New Hampshire: Almost Perfect
New Hampshire proudly avoids both sales AND income tax. But their meals and rooms tax? A whopping 9%. Dinner out? Taxed. Hotel stay? Taxed. Theme park tickets? Taxed.
Key exceptions:
- Restaurant meals: 9% tax statewide
- Hotel rooms: 9% tax
- Short-term rentals: Same 9%
Live free or die? Their property taxes might kill your budget instead. Seriously high.
Oregon: The Consistent One
Oregon keeps it simple - no sales tax anywhere in the state. Period. But their income tax? Second highest nationally (9.9% top rate). Ouch.
Minor exceptions:
- Local lodging taxes up to 6% in tourist spots
- Cigarettes and alcohol still taxed
Portland's Pioneer Place Mall feels like shopping heaven. Bought my MacBook there last year - saved $130 instantly. But my paycheck? Smaller than in Washington.
Where People Get Confused: Sales Tax Myths Debunked
I've seen so much misinformation about states with no sales tax at all. Let's clear things up:
Does no sales tax mean no taxes on anything?
Not even close. Most states tax specific things like hotels, meals, alcohol, cigarettes, or gasoline. New Hampshire nails restaurant meals hard.
Are cars really tax-free in these states?
Mostly yes on sales tax! But Oregon charges 0.5% title fee, Montana has ownership taxes, and Alaska has local taxes in some areas. Registration fees still apply everywhere.
Is online shopping tax-free if I live there?
Generally yes for physical goods shipped to your no-tax state address. But digital goods? Varies by state. Some tax software or streaming.
Biggest shocker? Tourists often pay more taxes in "no sales tax" states than elsewhere. Those hotel taxes add up fast.
The Local Tax Trap
Alaska is the worst offender here. Check out these local variation:
| Alaska City | Sales Tax Rate | Applies To |
|---|---|---|
| Anchorage | 0% | Nothing |
| Fairbanks | 0% | Nothing |
| Juneau | 5% | Most goods |
| Homer | 7.5% | Goods + some services |
| Seward | 6% | Goods + lodging |
See why asking "which states have no sales tax" isn't enough? You need city-level data for Alaska.
Crossing Borders: Shopping Strategies for Savings
Living near a no-sales-tax state? You've got options. My cousin in Vancouver, WA shops in Portland weekly. Saves thousands annually.
Smart shopper tips:
- Vehicle purchases: Oregon residents buying in CA? Pay use tax back home. Know the rules.
- Major purchases: Appliances, electronics, jewelry worth driving for? Absolutely.
- Destination shopping: Delaware's Christiana Mall is built for PA/NJ shoppers. Oregon's Woodburn outlets attract Washingtonians.
Woodburn Premium Outlets specifics:
- Address: 1001 Arney Rd, Woodburn, OR 97071
- Hours: Mon-Sat 10am-9pm, Sun 10am-7pm
- Stores: 120+ including Nike, Coach, Columbia
- Parking: Free and massive
Just bought running shoes there last month. $120 shoes, $0 tax. Same shoes in Seattle? $128.40. Worth the drive.
The Fine Print on Big-Ticket Buys
Thinking of buying a car in Oregon to save? Beware:
- Oregon charges 0.5% title fee upfront
- California residents pay use tax when registering back home
- Montana requires annual "ownership tax" based on vehicle value
My advice? Call your home state DMV first. I learned this the hard way.
Living the Dream? What Residents Actually Pay
Thinking of moving just to escape sales tax? Slow down. Let's compare overall tax burdens:
| State | Avg Property Tax Rate | Top Income Tax Rate | Other Taxes | Overall Tax Burden Rank |
|---|---|---|---|---|
| Alaska | 1.02% | 0% | Local sales taxes, Fuel taxes | 46th (lowest) |
| Delaware | 0.57% | 6.6% | Gross receipts tax | 34th |
| Montana | 0.83% | 6.75% | Resort taxes | 22nd |
| New Hampshire | 1.93% | 5% (dividends/interest only) | Meals & rooms tax | 41st |
| Oregon | 0.97% | 9.9% | Local lodging taxes | 14th (highest) |
See why Oregonians complain? That income tax bites hard. New Hampshire's property taxes are no joke either.
The Lifestyle Factor
Beyond taxes, consider:
- Alaska: Isolation, extreme weather, high shipping costs
- Delaware: Small state vibe, beach access, but crowded summers
- Montana: Outdoor paradise, limited healthcare in rural areas
- New Hampshire: Four seasons, near Boston, brutal winters
- Oregon: Rainy winters, high homelessness in cities, amazing nature
I lasted two winters in New Hampshire before moving south. That cold isn't for everyone.
Your Burning Questions Answered
Let's tackle your specific questions about states with no sales tax:
Which state has absolutely no sales tax whatsoever?
Delaware and Oregon come closest. No statewide sales tax and no local sales taxes either. New Hampshire has no sales tax but hits restaurants and hotels hard.
Do I pay sales tax when ordering online to a no-tax state?
Generally no on tangible goods shipped to your address in Alaska, Delaware, Montana, New Hampshire, or Oregon. But some states tax digital products. Check state rules.
Are cars genuinely tax-free in no sales tax states?
Mostly yes! But Oregon charges a 0.5% title fee. Alaska has local taxes in cities like Juneau. New Hampshire has registration fees based on vehicle age/weight. Still, typically huge savings.
What about groceries? Are they taxed?
In truly no sales tax states? No tax on groceries anywhere. Even in states with sales tax, groceries are often exempt or taxed lower.
Is it worth relocating solely to avoid sales tax?
Probably not. Unless you're spending six figures yearly on taxable goods, other taxes will likely offset savings. Visit first. I moved to Oregon for work, not taxes - the rain takes getting used to.
Smart Shopper's Field Guide
Whether you're road-tripping or relocating, here's your cheat sheet:
For Vacationers
- Lodging: Expect taxes everywhere except private home rentals in most places
- Rental Cars: Often taxed even in no-sales-tax states
- Souvenirs: Tax-free! Buy that Oregon Ducks gear guilt-free
- Big Purchases: Worth planning - bought my camera in Portland during a trip
For Potential Movers
Consider:
- Property taxes vs. income taxes tradeoffs
- Cost of living differences beyond tax
- Access to services (rural Alaska lacks specialists)
- Climate preferences
Rent before you buy. I learned Montana winters aren't my thing after one season.
For Business Owners
Key considerations:
- Delaware's corporate laws are business-friendly
- Oregon's high income tax affects payroll
- New Hampshire has no income tax but high business taxes
- Montana offers incentives for certain industries
A client moved his e-commerce biz to Oregon. Saved on inventory taxes but paid more in payroll taxes. Net positive for him.
The Real Bottom Line on States with Zero Sales Tax
So, which states have no sales tax? Officially: Alaska, Delaware, Montana, New Hampshire, Oregon. But reality is messier.
Alaska lets localities tax. Montana taxes resorts. New Hampshire slams restaurants. Only Delaware and Oregon offer near-true retail tax freedom.
Is living tax-free worth it? Depends entirely on your spending habits and tolerance for other taxes. High earner? Oregon's income tax hurts. Homeowner? New Hampshire property taxes sting. Big spender? Delaware or Oregon could save you thousands.
My take? Don't move just for sales tax savings. Visit first. Calculate your actual tax burden. Talk to locals. That perfect postcard town in Montana might have brutal winters and spotty internet.
But for shopping? Absolutely plan those trips to sales-tax-free states for major purchases. My Oregon shopping runs have saved me enough for a nice vacation. Just don't book a hotel in Astoria without checking their lodging tax first.
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