Five states in the US collect no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. You can remember them with the mnemonic NOMAD — New Hampshire, Oregon, Montana, Alaska, Delaware. It sounds like a tax haven. It is not.
The quick list
- Alaska — No state sales tax, but cities and boroughs can levy local sales taxes up to about 7%. Anchorage has none; Juneau has 5%.
- Delaware — No state or local sales tax. Instead, a gross receipts tax on businesses (0.1% to 2.07% depending on industry) that is often passed through in prices.
- Montana — No general sales tax, but resort and local-option taxes apply in tourist towns like Big Sky and Whitefish (up to 3%).
- New Hampshire — No sales tax. But an 8.5% tax on restaurant meals and prepared food, plus a rental car tax.
- Oregon — No state or local sales tax, period. This is the cleanest “no sales tax” state in the country.
What those states tax instead
Every state needs revenue. The five no-sales-tax states raise it through other channels, and in some cases the total tax burden is higher than in sales-tax states.
Alaska: oil, and very little else
Alaska is the exception — it taxes residents less than almost any other state. No state sales tax, no state income tax, and in fact the state pays every resident an annual dividend (the Permanent Fund Dividend, around $1,500 per person in recent years) funded by oil royalties. This is only sustainable because Alaska has abundant petroleum and fewer than 750,000 residents. You cannot move there and replicate the system elsewhere.
Delaware: income tax and corporate fees
Delaware has a state income tax that tops out at 6.6%. It also hosts more than 1.5 million corporations (including more than half of all publicly traded US companies) because of its permissive corporate law, and the fees those companies pay — annual franchise tax, registered agent fees, incorporation fees — fund about a third of state revenue. This is why residents do not pay sales tax: the corporations carry the load.
Montana: property tax
Montana relies heavily on property tax, particularly on homes and ranchland. Personal income is also taxed, with a top bracket of 5.9%. The absence of sales tax is partly a lifestyle choice by residents who have repeatedly rejected it at the ballot box.
New Hampshire: property tax (a lot of it)
New Hampshire has some of the highest property taxes in the country, averaging around 1.9% of home value annually — more than double the national average. A $400,000 home carries about $7,600 per year in property tax. The state also has an interest and dividends tax (being phased out by 2027) and a business profits tax. For retirees on fixed incomes who already own their homes, New Hampshire is heaven. For first-time buyers, it is a trap.
Oregon: income tax
Oregon has one of the highest state income tax rates in the country, topping out at 9.9% on income over about $125,000. Portland additionally imposes local taxes. A high earner in Oregon pays more in state income tax than a similar earner in California pays in state income tax plus sales tax combined — in some cases significantly more.
Does “no sales tax” actually save money?
Depends entirely on your income, consumption, and housing choices.
- High earner, modest consumer: You get hit by income tax (Oregon, Delaware) or property tax (New Hampshire) and save only a little on sales tax. Probably a wash or a loss.
- Low-to-middle earner, high consumer: Sales tax is regressive (it takes a larger share of income from lower earners). No-sales-tax states tend to be friendlier here. Oregon is a real win for this profile if you can avoid the income tax bracket jump.
- Retiree on pension/SS, owns home: New Hampshire hurts (property tax). Oregon helps (no sales tax on fixed expenses). Montana varies by county.
- Small business owner: Delaware’s gross receipts tax can be surprisingly steep. Oregon’s Corporate Activity Tax applies to businesses with over $1 million in commercial activity.
Border shopping: real but smaller than you think
People who live near no-sales-tax state borders do cross to make big purchases. Massachusetts residents drive to New Hampshire for appliances and furniture. Washington residents cross to Oregon for electronics. California residents visit Portland for tax-free shopping.
But every state requires residents to self-report out-of-state purchases and pay “use tax” (effectively sales tax for items you bought elsewhere). Almost nobody does. Enforcement is rare for individuals but common for high-value items like cars — most states will bill you when you register an out-of-state vehicle.
The math works only for items where the savings exceed the round-trip cost and your time. A $2,000 TV at 7% sales tax saves you $140. That is worth a short drive, not an overnight trip.
What about states with the highest sales tax?
The highest combined state + local sales tax rates are in Louisiana (around 9.5% on average), Tennessee (~9.5%), Arkansas (~9.4%), Washington (~9.4%), and Alabama (~9.3%). Some cities push above 10% combined — Chicago tops 10.25%.
Tennessee is especially brutal because it also taxes groceries (most states exempt them) at 4% state plus local. Washington and Tennessee both pair high sales tax with no income tax, so the overall burden for most residents is comparable to lower-sales-tax states.
How to use this in practice
If you are making a relocation decision, compare total tax burden: state income tax + property tax + sales tax + vehicle and excise taxes + local add-ons. Use the Tax Foundation’s state-by-state burden tables as a starting point. “No sales tax” is a marketing line; it means very different things in Alaska (subsidy paradise) than in New Hampshire (property tax bomb).
If you are a tourist or visiting family, the difference is real and immediate — the tag price is what you pay at the register in Oregon, which is a genuine pleasure. But do not mistake a single receipt for a tax strategy.
For any purchase where you need to know exact tax — whether you are comparing quotes across states, calculating business expenses, or figuring a tip on a pre-tax subtotal — our sales tax calculator handles it in one click.