Which States Don't Charge Sales Tax

Five states have no statewide sales tax

Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge a statewide sales tax. This means when you buy something in these states, you pay only the price on the tag — no additional percentage is added at checkout.

However, "no statewide sales tax" does not mean zero sales tax everywhere in those states. Alaska allows cities and boroughs to charge local sales taxes, and some do. Delaware, Montana, New Hampshire, and Oregon prohibit local sales taxes entirely, so residents and visitors pay no sales tax at any level in those states.

The other 45 states and Washington, D.C. charge statewide sales tax. The rate varies by state, ranging from 2.9% to 7.25% at the state level alone, and many states allow counties or cities to add local taxes on top of that.

Key Takeaways

• Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though Alaska permits local jurisdictions to charge their own.
• In Delaware, Montana, New Hampshire, and Oregon, you pay no sales tax at the state or local level on most purchases.
• Some states with no sales tax still tax specific items like groceries, gasoline, or alcohol differently than other states do.
• If you live in a state with sales tax and buy from a seller in a no-sales-tax state online, you may still owe sales tax to your own state depending on state law and the seller's location.

How Alaska's local sales tax works

Alaska is the only state without a statewide sales tax that allows local governments to impose their own. About 100 cities and boroughs in Alaska charge local sales tax, while others do not. The rate varies by location — some charge 0%, others charge up to 7.5%.

If you buy something in Anchorage, you pay Anchorage's local sales tax. If you buy the same item in Juneau, you pay Juneau's rate. A purchase in an unincorporated area of Alaska may have no sales tax at all. You need to know which city or borough you are in to know what tax rate applies.

States that tax groceries or specific items differently

Even among the five no-sales-tax states, some tax certain items that other states do not. These differences matter if you buy groceries, fuel, or prepared food regularly.

Alaska taxes groceries at the state level in some jurisdictions and does not in others, depending on local rules. Montana taxes groceries at 0% but taxes other items. New Hampshire taxes groceries at 0% but taxes prepared food and restaurant meals. Oregon taxes groceries at 0% but taxes some services. Delaware taxes groceries at 0% but taxes some services and prepared food.

If you are moving to or frequently shopping in one of these states, check what specific items are taxed, because the rate on everyday purchases may differ from the headline "no sales tax" claim.

How online purchases work if you live in a sales tax state

If you live in a state that charges sales tax and you buy from an online seller located in a no-sales-tax state, you do not automatically avoid sales tax. Your own state may require you to pay sales tax on that purchase.

Most states with sales tax now require online sellers to collect and send sales tax to the state, regardless of where the seller is located. This is called economic nexus — the seller has enough business in your state that they must collect tax. If the seller does not collect it, your state may expect you to report and pay the tax yourself on your state tax return, though few individuals do.

The safest assumption is that you will pay sales tax on online purchases to your home state if your state has sales tax, even if you are buying from a seller in Alaska, Delaware, Montana, New Hampshire, or Oregon.

Why these five states have no sales tax

Each of these states funds government differently. Alaska has oil revenue and uses it to fund state operations without relying on sales tax. Delaware has historically attracted corporations and uses corporate taxes and other revenue sources. Montana, New Hampshire, and Oregon made policy choices to avoid sales tax and instead rely on income tax, property tax, or other sources.

These funding models mean the tax burden falls differently in each state. A state with no sales tax may have higher income tax or property tax to make up the difference. When comparing the total tax burden across states, looking only at sales tax gives an incomplete picture.

Comparing total tax burden across states

No sales tax does not mean the lowest overall taxes. A state with no sales tax might charge higher income tax or property tax, resulting in a higher total tax burden than a state with moderate sales tax and lower income tax.

For example, New Hampshire has no sales tax but charges income tax on interest and dividends. Oregon has no sales tax but charges income tax on all income. Alaska has no state income tax and no statewide sales tax, but some cities charge local sales tax and property taxes vary by location.

If you are considering moving or comparing the cost of living across states, research the full tax picture — income tax, property tax, local taxes, and what items are taxed — rather than focusing on sales tax alone.

Frequently Asked Questions

Do I pay sales tax on groceries in these five states?

In Delaware, Montana, New Hampshire, and Oregon, groceries are not taxed. In Alaska, groceries may or may not be taxed depending on which city or borough you are in. Check your local jurisdiction's rules if you live in or are visiting Alaska.

Can I avoid sales tax by ordering online from a no-sales-tax state?

Not if you live in a state with sales tax. Your state likely requires the seller to collect sales tax on the purchase, or you may owe it yourself. The seller's location does not override your home state's tax rules.

Does Alaska have any sales tax at all?

Alaska has no statewide sales tax, but about 100 cities and boroughs charge local sales tax ranging from 0% to 7.5%. You pay the local rate where you make the purchase. Check which city or borough you are in to know the rate.

Which no-sales-tax state has the lowest overall taxes?

That depends on your income, property ownership, and spending habits. Alaska has no state income tax and no statewide sales tax, but property taxes and local sales taxes vary. New Hampshire has no sales tax but taxes investment income. Compare all taxes — income, property, and local — not just sales tax.

If I move to one of these states, will I pay less in taxes?

Not necessarily. These states fund government through other taxes like income tax or property tax. Your total tax burden depends on your income level, whether you own property, and local rates. Calculate your full tax liability in both states before moving.