You're standing at the register. You saw the price tag said $99.99, so you pulled out a hundred-dollar bill. Then the cashier says, "That’ll be $108.24." It’s annoying. That extra chunk of change—the sales tax—is just a fact of life for most of us, but it doesn't have to be.
Actually, five states in the U.S. just don't do it. They’ve decided to skip the sales tax entirely. If you're looking into what US states have no sales tax, you’re probably either planning a big shopping trip, thinking about moving, or just tired of feeling nickel-and-dimed every time you buy a pack of gum.
Most people call these the "NOMAD" states. It’s a handy little acronym: New Hampshire, Oregon, Montana, Alaska, and Delaware.
But here is the thing. "No sales tax" isn't always as simple as a 0% receipt. Each of these places has a very different way of keeping the lights on without taxing your new shoes.
The NOMAD Club: Why These Five Are Different
Let's talk about Delaware first. It’s basically the corporate capital of the world. Because so many businesses are incorporated there, the state brings in a massive amount of revenue from franchise taxes and business filings. They don't need your 6% at the grocery store. It’s a huge draw for people in neighboring states like Pennsylvania or Maryland who drive across the border for "tax-free" holidays.
Montana is another beast entirely. It’s huge, rugged, and has a tiny population relative to its size. They rely heavily on natural resource taxes—think oil, gas, and coal. If you go to a place like Whitefish or West Yellowstone, you might see a "resort tax." This is where it gets tricky. While the state doesn't have a sales tax, specific high-tourist towns are allowed to tack on a small percentage to help pay for the infrastructure that millions of visitors use. It’s usually around 3%, but hey, it’s still not a state-wide sales tax.
New Hampshire is famous for its "Live Free or Die" motto. They take it seriously. No income tax and no sales tax. It sounds like paradise, right? Well, they have to get that money from somewhere. New Hampshire consistently has some of the highest property taxes in the entire country. You might save $500 a year on clothes and gadgets, but you'll probably pay it back—and then some—to the town where you live.
Then there’s Oregon.
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Oregonians love their lack of sales tax. It’s a point of pride. Instead, the state relies almost entirely on high personal income taxes. It’s a trade-off. You keep less of your paycheck every month, but when you go to buy a $40,000 truck, the price on the sticker is exactly what you pay. No surprises.
Alaska is the weirdest one of the bunch. There is no state-level sales tax, but the state allows local municipalities to set their own. So, if you’re in Anchorage, you’re golden—0%. But if you head over to Juneau, you might hit a 5% local tax. It’s a patchwork. Plus, Alaska has the Permanent Fund Dividend, which actually pays residents a share of the state's oil wealth every year. It’s basically the polar opposite of a tax.
What Most People Get Wrong About "Tax-Free" Living
A lot of people think that moving to a state with no sales tax is an automatic win for their bank account. It isn't always.
Taxation is a see-saw. If one side goes down, the other usually goes up. States need money for roads, schools, and police. If they aren't getting it from your shopping cart, they’re getting it from your paycheck (Oregon), your house (New Hampshire), or the companies that dig stuff out of the ground (Montana and Alaska).
The Use Tax Trap
Here is something nobody talks about: the "Use Tax."
Legally, most states that do have a sales tax require you to pay a "use tax" on items you bought out of state but brought back home. If you live in California and drive to Oregon to buy a laptop, California technically expects you to report that and pay the equivalent sales tax when you file your state returns.
Does everyone do this? No. Honestly, almost nobody does it for small items. But for "big ticket" stuff like cars or boats? You can't escape it. When you go to register that Oregon car in your home state, the DMV will see you haven't paid sales tax and they will charge you right then and there.
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Tourism and The Resort Fee Loophole
If you’re traveling to find what US states have no sales tax, keep an eye on "prepared food" taxes. Even in New Hampshire, which hates taxes, there is a 8.5% tax on meals and room rentals. They figure since tourists are the ones eating out and staying in hotels, they can tax that without upsetting the local voters too much.
So, your "tax-free" vacation might still include a hefty bill at the end of your dinner at the lobster shack.
The Real Cost of Doing Business
Businesses love these states for a reason. If you're a photographer buying $20,000 in camera gear every year, being in a state like Delaware or Oregon saves you thousands. That’s pure profit.
However, states like New Hampshire and Delaware have what’s called a "Business Enterprise Tax" or "Gross Receipts Tax." Instead of taxing the consumer at the register, they tax the business on its total revenue. Small business owners often find themselves in a tough spot because they have to pay this tax even if they aren't making a profit yet.
It’s a different kind of pressure.
Is It Actually Worth Moving?
If you spend a huge portion of your income on physical goods, then yes, these states are incredible. If you're a "minimalist" who spends more on services, rent, and digital assets, the high property or income taxes in these states might actually make you poorer.
Take a look at the "Total Tax Burden" statistics. WalletHub and the Tax Foundation put these out every year. Often, states with "no sales tax" end up in the middle of the pack because they find other ways to grab a piece of the pie.
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For example, Alaska often has the lowest overall tax burden in the U.S. when you combine everything. New Hampshire, despite having no sales or income tax, often has a higher overall burden than states with moderate taxes because their property taxes are so aggressive.
Why Amazon Changed Everything
It used to be that the only way to get a "no sales tax" deal was to drive across a border. Then came the internet.
For a long time, you could buy anything online tax-free if the seller didn't have a "physical presence" in your state. Those days are mostly gone. Thanks to the 2018 Supreme Court case South Dakota v. Wayfair, Inc., states can now require online retailers to collect sales tax based on where the buyer is located.
So, if you live in a state with sales tax, you’re paying it on Amazon regardless of where the warehouse is. The only way to truly utilize the "no sales tax" benefit now is to physically be in one of those five states when the transaction happens.
Practical Steps for Your Next Move
If you are serious about leveraging these tax-free zones, don't just look at the 0% sales tax. You have to look at the whole picture.
- Calculate your "Big Three": Look at your annual spending, your projected income, and the value of the home you want to buy. Compare the sales tax savings against the potential income tax or property tax hikes.
- Check for "Hidden" Local Taxes: If you're looking at Alaska or Montana, look at the specific city or county. A 0% state tax doesn't mean a 0% local tax.
- Consider the "Border Effect": Many people choose to live just across the border from a no-sales-tax state. You get the lower property taxes of one state and the 0% shopping of the other. It’s a classic move in places like Vancouver, Washington (right next to Portland, Oregon).
- Think About Registration: If you’re buying a vehicle, remember that the tax is usually based on where you register it, not where you buy it. Trying to "game" this by using a fake address is a quick way to get hit with tax evasion charges.
Understanding what US states have no sales tax is a great first step toward smarter financial planning, but it's rarely a "get out of taxes free" card. It’s just a different way for a state to balance its books. Whether that balance works in your favor depends entirely on how you earn and spend your money.
The "NOMAD" states offer a unique lifestyle, but as with everything in economics, there's no such thing as a free lunch. You just have to decide which bill you'd rather pay.