Alaska, Delaware, Montana, New Hampshire, and Oregon are the current five states without a state sales tax. These states do not impose state-level sales taxes, preventing additional fees for purchasing retail goods or services.
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States With No Sales Tax
States in the United States are free to set their own base sales tax rates, and federal regulation does not apply to sales tax laws. Retail purchases and specific services are subject to sales taxes.
Excise taxes and surtaxes may be imposed by local governments and counties regardless of whether a state has a state sales tax. For instance, the sales tax rate in New York City is 8.875% due to additional levies, on top of the 4% state sales tax.
Alaska, Delaware, Montana, New Hampshire, and Oregon are among the five states that will have a 0.000% sales tax as of 2023. However, individual towns in each of these states may levy income taxes, excise taxes, and taxes on tourist attractions.
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The five US states without a sales tax are as follows:
- Alaska
- Montana
- Oregon
- Delaware
- New Hampshire
Alaska State With No Sales Tax
Although Alaska permits local sales taxes, there is no state sales tax in the state. In the Last Frontier, a local sales tax is applied to certain transactions by more than 100 boroughs or local governments.
In the town of North Pole, Alaska, there is presently a 5.5% municipal sales tax; however, neither Anchorage nor the town of Chicken, Alaska, has local sales taxes.
In Alaska, sales tax rates differ depending on the region and season. For example, Ketchikan has an 8% sales tax rate from April to October, whereas Nome has a 5.5% sales tax rate in the winter. Yet there is no sales tax in Alaska.
Montana State With No Sales Tax
Montana does not have a state sales tax; however, certain towns do impose a resort and municipal option tax, which is presently restricted at 3%.
The resort tax is a local choice sales tax that is applied to the retail value of products and services that are sold by specific businesses.
These businesses include restaurants, housing and camping establishments, and destination recreational facilities such as ski resorts.
The resort tax is further applied to luxury goods. Big Sky, Whitefish, and West Yellowstone are among the jurisdictions that have a local resort tax.
Tobacco, gasoline, housing, and alcohol are among the products on which Montana imposes excise taxes. A sales tax that is specific to a product is known as an excise tax.
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Oregon State With No Sales Tax
In Oregon, state and local governments do not impose a sales tax; nevertheless, people are subject to an income tax. The rate of individual income tax is 9.90% in 2022.
Furthermore, certain jurisdictions in Oregon are responsible for collecting local income taxes. Oregon levies corporate taxes at rates ranging from 6.60% to 7.60%.
Oregon has a bicycle excise tax even though there isn’t a general state sales tax in place. The store collects the flat $15 bicycle excise tax at the moment of sale, making it feel like a sales tax. In Oregon, car taxes also exist.
Delaware State With No Sales Tax
State and municipal sales taxes do not apply in Delaware. Remarkably, in reaction, New Jersey slashed its sales tax in Delaware’s neighbouring Salem County by half.
Income Tax Range lower than 2.2% (on $2,001 to $5,000 in taxable income). Excessive 6.6% (for taxable income over $60,000).
When compared to other states, the top rate is in the middle. A 1.25% city tax is further levied on wages in Wilmington. Property Taxes range from $1,570 is the typical property tax amount for Delaware homeowners.
Furthermore, Delaware does not have any jurisdictions that implement sales tax policies. Delaware does, however, impose a gross seller tax on companies based on the entire amount of sales of products and services.
New Hampshire State With No Sales Tax
New Hampshire has one of the highest expenses of living in the country, ranking ninth overall, and about 5% higher than the national average, so think twice before relocating there.
Happily, there is no sales tax to be paid by New Hampshire residents. Though the Granite State has one of the highest personal income per capita in the country averaging $74,663, it helps counterbalance that.
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