Which States Have No Sales Tax and How That Affects Your Shopping

Five states have no statewide sales tax at all

Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge a statewide sales tax. If you live in or buy from one of these states, you will not pay a state-level sales tax on most purchases. However, this does not mean shopping there is completely tax-free — the details depend on where you live, what you are buying, and whether local taxes explore.

Alaska allows cities and boroughs to set their own local sales taxes, so some areas within the state do charge tax even though Alaska itself does not. Delaware, Montana, New Hampshire, and Oregon have no local sales taxes either, making them the only states with zero sales tax at any level for most goods.

The absence of a statewide sales tax does not mean these states collect no sales revenue. Some fund state operations through other taxes — New Hampshire and Delaware rely heavily on income taxes, for example, while Alaska uses oil revenue. Understanding how your state funds itself can help explain why sales tax rules differ from state to state.

Key Takeaways

• Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though Alaska allows local taxes in some cities.
• Even in no-sales-tax states, certain items like groceries, prescription drugs, or services may be taxed differently than in other states.
• If you buy online from a no-sales-tax state and have it shipped to a state that does charge sales tax, you typically owe tax in your home state, not the seller's state.
• Moving to or shopping in a no-sales-tax state does not eliminate all taxes — these states use other revenue sources like income tax or property tax.

How local taxes work in Alaska

Alaska has no statewide sales tax, but that does not mean the entire state is tax-free. Municipalities — cities, boroughs, and other local governments — can set their own sales tax rates. Juneau, Anchorage, Fairbanks, and many smaller towns charge local sales taxes that range from about 5 percent to 7.5 percent.

If you live in or visit an Alaskan city with a local sales tax, you will pay it just as you would in any other state. The difference is that there is no additional state layer on top. Before shopping in Alaska or ordering something shipped there, check whether your specific city or borough charges a local tax.

What items are taxed differently in no-sales-tax states

Even though these five states have no sales tax, they may tax specific categories of goods or services. For example, some states exempt groceries or prescription medications from sales tax in other states, but the rules vary widely.

Montana taxes most goods but exempts groceries and prescription drugs. New Hampshire taxes most items but exempts groceries and clothing. Oregon and Delaware have similar carve-outs for certain necessities. Alaska's local taxes (where they exist) typically follow the same pattern. If you are buying something specific — medicine, food, clothing — check your state's rules rather than assuming no sales tax means no tax on that item.

Online purchases and sales tax in no-sales-tax states

If you order something online from a seller in Alaska, Delaware, Montana, New Hampshire, or Oregon and have it shipped to your home state, you do not automatically avoid sales tax. The rule is based on where you live, not where the seller is located. If your state charges sales tax, you owe it on the purchase — either the seller collects it at checkout, or you are responsible for reporting it when you file taxes (though most people do not).

The only exception is if you live in one of these five states and order from a seller anywhere in the country. Then the tax owed depends on your state's rules. If you live in Oregon and order from a seller in California, you owe Oregon tax (or no tax, depending on what you bought), not California tax.

Why these states have no sales tax

Each of these five states chose a different path to fund government without a statewide sales tax. Alaska uses oil revenue and a sovereign wealth fund. New Hampshire and Delaware rely on income taxes and corporate taxes. Montana and Oregon use income tax and property tax. Understanding why a state has no sales tax can help explain what other taxes might be higher.

For example, New Hampshire has no sales tax but charges a 5 percent tax on interest and dividends — a tax that most other states do not have. Delaware has no sales tax but charges corporate income tax and a gross receipts tax on businesses. These trade-offs mean that living in a no-sales-tax state does not necessarily mean paying less tax overall.

How to find the tax rate where you live

If you live in one of these five states, your local tax rate depends on your city or county. The easiest way to find your rate is to check your state's Department of Revenue website or search "[your city] sales tax rate." Many tax software programs and online retailers also display the rate at checkout based on your address.

If you are moving to one of these states or planning a major purchase, knowing your local rate (or confirming there is none) can help you budget. Some online retailers do not automatically calculate tax for these states, so double-check before assuming a price is final.

Frequently Asked Questions

Do I pay sales tax if I buy something online in a no-sales-tax state?

Not necessarily. If you live in a state with sales tax and order from a seller in Alaska, Delaware, Montana, New Hampshire, or Oregon, you still owe tax in your home state. The seller's location does not determine whether you pay tax — your location does. If you live in one of these five states, you owe tax only if your local area charges it.

Is everything tax-free in these five states?

No. These states have no sales tax, but they tax other things — income, property, gasoline, or specific goods like alcohol and tobacco. Additionally, some items within these states may be taxed differently. Check your state's rules for the specific item you are buying.

Can I avoid sales tax by having something shipped to Alaska or Oregon?

No. The sales tax you owe is based on where you live and where you receive the item, not where you have it shipped from. If you live in a state with sales tax, you owe it regardless of the seller's location. Using a no-sales-tax state address to avoid tax is not legal.

Do Alaska cities all charge the same local sales tax?

No. Each Alaskan city and borough sets its own rate. Anchorage, Juneau, and Fairbanks all charge different amounts, and some smaller towns charge nothing. Check your specific city's rate before shopping.