5 States That Don’t Have Sales Tax

When traveling throughout the United States, you’re likely to pick up a few souvenirs along the way. Maybe it’s a mug from your favorite national park or a T-shirt from a delightful local eatery. However, the list price you see typically isn’t what you’ll end up paying — when you go up to the cash register, you’ll be charged a state sales tax (and other local taxes) on top of that. This can range anywhere from an additional 2.9% in Colorado to 7.25% in California — the state with the highest sales tax in the country. But the good news is that there are five U.S. states that don’t have a statewide sales tax.

Delaware

America’s “First State” is also one of the last few holdouts without any state sales tax. But unlike the other states without any statewide tax, there are no local sales taxes in Delaware, either. Whether you’re in Wilmington buying a ticket to the storied Delaware Art Museum or patronizing shops in the 17th-century-era settlement of New Castle, you won’t pay a penny above list price for goods and services.

The only exception applies to Delaware-based business owners, who are subject to a gross tax based on total sales. But for the average visitor, there’s no better state for affordable souvenirs than Delaware. (In all five sales tax-free states, however, be aware that if you travel there to purchase expensive goods such as a car sans sales tax, you may be subject to a use tax back in your home state.)

Alaska

Whether you’re perusing the gift shop at Denali National Park or enjoying delicious locally sourced salmon, you won’t have to worry about paying state sales tax in America’s largest state. However, while there’s no statewide sales tax, there are a few local tax rules travelers should be aware of. 

For example, 107 of the 165 municipalities in Alaska levy a general sales tax between 1% and 7% on purchases such as seafood, hotels, liquor, and fuel. In Alaska’s capital city, Juneau, a 5% sales tax is charged on goods purchased within the city limits. Other cities such as Anchorage, however, pride themselves on their lack of any sales tax, and encourage visitors to shop for Indigenous crafts, tasty fare, and other local wares without paying extra in taxes.

Montana

While there’s no statewide sales tax in Montana, many popular resort areas charge local sales taxes within their jurisdiction. Notable examples include the 4% resort tax levied within the Big Sky Resort Area District, a popular ski destination in the southern part of the state. There’s also a 3% fee levied by the town Whitefish, which lies next to the Whitefish Mountain Resort and is a short drive to the stunning Glacier National Park.

Similarly, a 4% local tax is imposed in the town West Yellowstone, which sits on the western boundary of Yellowstone National Park. So, keep in mind that if you plan to visit these popular Montana tourist areas, you may be subject to small taxes on goods. Statewide, you may also be subject to a services or use tax of 4% on accommodations, campgrounds, and rental vehicles.

New Hampshire

If you’re considering a move to New Hampshire, be aware of the fact that their 2.09% average property tax rate is one of the highest in the country. But if you’re just traveling through the Granite State, then you likely won’t need to spend a single dime on taxes, as there’s no state sales tax or even a general sales tax in local municipalities. There are, however, a few select goods that are subject to taxes: a 23.83 cent tax on each gallon of gasoline and a $1.78 tax if you’re purchasing cigarettes. Other than that, you can shop for souvenirs ’til you drop without paying taxes on the majority of goods sold statewide.

Oregon

The fifth and final state without a statewide sales tax is Oregon, the Beaver State. As you travel throughout Oregon, you might notice that there’s one municipality in the state that levies a local tax: the city of Ashland. Here, expect to pay a small tax if you buy any food or beverages. Outside of that example, there’s no sales tax levied on any item sold in Oregon.

However, there’s a specific tax law to be aware of if you purchase a vehicle out of state and plan to register it in Oregon — expect to pay 0.5% on the retail price as part of a vehicle use tax. Otherwise, the state makes up for the sales tax revenue it misses out on by collecting sizable personal income and property taxes instead.