Everything You Need to Know About States With No Sales Tax

Have you ever paid more than the item’s actual price when shopping online? If you don’t live in one of the five states with 0% sales tax: Alaska, Delaware, Montana, Oregon, and New Hampshire – chances are, you have. The additional cost consumers pay beyond the item’s price is sales tax.

Paying sales tax is always hard for consumers, but it is the state’s lifeblood. On the other hand, businesses find sales tax to be both an obligation and a headache. Fortunately, in states without sales tax, purchasers are exempt from paying additional sales tax when buying goods or services.

Before getting into the nitty-gritty of states with no sales tax, you should also ensure you understand ecommerce sales tax. 

Let’s learn about the US states with no sales tax.

Which States Do Not Have Sales Tax?

Five of the 50 states in the USA do not impose a state sales tax. Four states do not have state or local sales tax, while one has local tax impositions. Here are the details of these states.

NOTE: Residing in a NOMAD state does not exempt you from collecting tax for sales made into taxing states (like New York or California) if you hit their economic nexus thresholds.

Alaska

Alaska does not impose a statewide general sales tax on goods and services. However, it is unique because it is the only NOMAD state that allows local governments and municipalities to levy their own sales taxes. Alaska Taxable is an annual publication that details all municipalities and the specific taxes they impose. In addition to the Alaska Taxable publication, an interactive report with select tax and revenue data is available here.

Local Sales Tax Rates in Alaska

Local sales tax rates vary across cities, with more than 100 municipalities imposing their own rates ranging from 1% to 7.5%.

The City of Utqiagvik, for example, has suspended its sales and use tax effective July 1, 2025. While the tax is suspended until June 30, 2026, the importation of alcohol remains taxable. Sales tax rates in other cities, such as Seldovia, Sitka, and Skagway, can change throughout the year.

Utilize Alaska’s Mapping, Analytics, and Data Resources to find detailed information on various local tax rates.

ARSSTC Rule Change on Economic Nexus

As of 2026, the Alaska Remote Seller Sales Tax Commission (ARSSTC) will no longer use transaction counts to determine economic nexus. Businesses need to register with the ARSSTC only if:

• Their gross sales, including marketplace sales, exceed $100,000 in the current or previous calendar year.

Sellers with gross sales below $100,000 in 2024 may cancel their registrations after this date, but they must continue collecting and remitting taxes until the cancellation is formally processed.

Taxpayers currently registered should review their gross sales and transaction counts to determine eligibility for cancellation, and complete the process using the ARSSTC Remote Seller Account Closure Form.

Compliance Alert: Alaska’s Temporary Sales Tax

As of early 2026, Senate Bill 227 was introduced to establish a temporary statewide sales tax. The measure proposes, among other provisions, a temporary sales and use tax on tangible personal property and certain services.

If passed, SB 227 would not only impose a sales tax but also revise several of Alaska’s existing tax rules. These changes include adopting market-based sourcing, broadening the types of income subject to apportionment in Alaska, and gradually eliminating the corporate income tax by 2031.

Delaware

Delaware does not impose a state or local sales tax; therefore, the Delaware sales tax rate is 0%.

While consumers may be exempt from paying sales tax in Delaware, business owners are subject to a gross receipts tax. This tax is levied only on businesses, not on consumers. The gross receipts tax rate varies by business activity.

Delaware Gross Receipts Tax vs. Sales Tax

Delaware’s GRT is a tax on the total seller’s receipts from goods sold and services rendered in the state. Unlike a sales tax, it is not collected from the customer at checkout; it is paid directly by the business.

• Rates: Generally range from 0.0945% to 1.9914% depending on the industry.
• Retailers: Most general retailers face a rate of 0.7468%.
• The Exemption: Most businesses receive a monthly exclusion (typically $100,000), so the tax applies only to higher-volume entities.

Why It Matters for E-commerce

Remote sellers without a physical presence in Delaware (a warehouse, office, or employees) are generally exempt from GRT. This makes Delaware a true 0% state for out-of-state digital brands selling to Delaware residents.

Montana

Although Montana, known as the “Treasure State,” is subject to various types of taxes, it has no state or local sales tax. However, residents may still have to pay some local option taxes on goods and services. As a popular tourist destination, Montana also imposes resort and property taxes. Montana also imposes resort and property taxes. Montana imposes a 4% Lodging Sales Tax and a 4% Lodging Facility Use Tax statewide.

Oregon

Oregon does not impose sales tax on goods and services. This makes Oregon a no-sales-tax state, with a sales tax rate of 0%. This means $50 will cost you at most $50 in Oregon (what a treat!). Moreover, there is no local sales tax.

Taxes for High-Volume Sellers: Corporate Activity Tax (CAT)

The Oregon Corporate Activity Tax (CAT) is separate from the state’s income tax and applies to most types of businesses. A business establishes nexus for CAT purposes once it has at least $750,000 in Oregon-sourced receipts.

As of 2026, HB 2039 increased the CAT exemption and filing threshold from $1 million to $10 million. As a result, businesses with less than $10 million in commercial activity are no longer required to file or pay the tax. However, the current $750,000 registration requirement remains the primary trigger for new businesses to enter the system. If you don’t pay under $10 million, you must still register once you hit $750,000.

New Hampshire

The New Hampshire state tax rate is 0%, with no sales tax levied by the state or local government. Consumers can purchase without paying the additional cost.

As of 2026, the state remains among the most tax-friendly in the country, having recently completed a major tax repeal, such as the Interest & Dividends (I&D) Tax, which was fully repealed effective Jan 1, 2025. Consumers can purchase without paying the additional cost.

Since there is no sales tax, the government imposes a high property tax to make up for the revenue. The state also imposes other taxes, such as excise, real estate, corporate, and personal state income taxes.

States with No Local Sales Tax

In addition to Delaware, Montana, New Hampshire, and Oregon, some other states do not levy a local sales tax. However, they have state sales tax requirements. The following is a list of states with a 0% local sales tax rate.

• Connecticut
• District of Columbia
• Indiana
• Kentucky
• Maine
• Maryland
• Massachusetts
• Michigan
• New Jersey
• Rhode Island

States with Low General Sales Tax Rates

Not a resident of the states with zero sales tax? You can still have an edge with low sales tax rates. The following are the top states with the lowest state-wide tax rates.

Learn More About NOMAD States With TaxHero

Understanding how tax works in NOMAD states is essential for staying compliant and avoiding costly mistakes. If you operate in or sell into NOMAD states, our team can help you navigate the rules with clarity and confidence.

Let TaxHero handle everything about sales tax compliance. Book a consultation now.