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.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.
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.Frequently Asked Questions
1. Is there no sales tax in Alaska?+
Alaska is one of five NOMAD states, along with Delaware, Montana, New Hampshire, and Oregon, that do not impose a statewide sales tax. However, some local jurisdictions in Alaska still charge local sales tax.
2. Is Delaware a tax haven state?+
Delaware is known as a domestic and international tax haven. Through the “Delaware loophole,” companies can reduce taxes by holding intangible assets—such as trademarks—in the state and avoiding state income tax on that income.
3. Does Montana have sales tax?+
Montana does not impose a sales tax. However, it applies a graduated individual income tax of 4.70% to 5.90% and a 6.75% corporate income tax.
4. How does New Hampshire make money without a sales tax?+
New Hampshire does not have a sales tax. Instead, the state relies on property taxes, business taxes, and other revenue sources to fund government operations.
5. Why does Oregon have no sales tax?+
Oregon does not impose a general sales tax. Instead, the state relies primarily on income and excise taxes, creating a consumer-friendly tax environment while businesses comply with other tax obligations.