You know that feeling when you buy something for $100 and suddenly it's $108 at the register? Yeah, me too. That's why I went down this rabbit hole researching states without sales tax in the US. Turns out, only five states let you avoid that altogether. But here's what nobody tells you upfront - it's not always as straightforward as it seems.
Here's the deal: Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax. But before you start planning your shopping spree, you've got to understand the fine print. Some have local taxes, others make up for it elsewhere, and a few have tricks up their sleeves.
Meet the Five States Without Sales Tax in America
Let's cut to the chase - these are the places where you won't pay state sales tax:
| State | State Sales Tax | Local Sales Taxes? | Tax Trade-Offs | Real Impact |
|---|---|---|---|---|
| Alaska | None | Yes (1%-7%) | High fuel taxes | Juneau: 5% tax, Anchorage: 0% |
| Delaware | None | None | High corporate taxes | True 0% tax at register |
| Montana | None | Resort areas only | Tourist taxes | Regular stores: 0%, Ski resorts: 3-4% |
| New Hampshire | None | None | High property taxes | Full 0% savings |
| Oregon | None | None | High income taxes | Consistent 0% tax |
The Alaska Experience: Not Quite Tax-Free
I learned this the hard way during my trip to Fairbanks last winter. Bought a $500 winter coat, got to the register expecting $500, and bam - $535. Turns out Fairbanks charges 7% sales tax despite Alaska being one of the states without sales tax in the US at the state level.
Here's what you need to know:
- Where taxes hit: Juneau (5%), Homer (6%), Sitka (5%)
- Tax-free zones: Anchorage, Kodiak, Unalaska
- Hidden costs: Gas is $1/gallon more than national avg
Delaware: The Shopping Paradise
Christiana Mall near Newark became my personal playground last Black Friday. Zero sales tax on electronics? Yes please. What surprised me though was how tiny this state is - you can hit every major store in one day.
- Top tax-free spots: Christiana Mall, Tanger Outlets, Dover Downs
- Best deals: Electronics, designer clothing (no clothing tax either!)
- Local trick: Hotels charge 8% occupancy tax though
Fun fact: Delaware doesn't tax clothing at all - not even shoes or accessories. That makes it a double win for fashion shoppers.
Montana's Tax Twist
My ski trip to Big Sky taught me about "resort taxes" - that 4% extra charge on everything from lift tickets to burgers. Regular stores in Billings? Tax-free. Tourist areas? Not so much.
Key locations with local taxes:
- Big Sky Resort: 4%
- Red Lodge: 3%
- West Yellowstone: 4%
- Whitefish: 3%
New Hampshire: The Real Deal
This is the holy grail of states without sales tax in the US. I bought a laptop in Nashua and actually paid the sticker price. Their "Live Free or Die" motto applies to shopping too. But man, their property taxes will make your eyes water.
| City | Sales Tax | Big Ticket Savings | Best Buys |
|---|---|---|---|
| Nashua | 0% | $150 savings on $1500 laptop | Electronics, appliances |
| Portsmouth | 0% | $400 savings on $8k furniture | Home goods, outdoor gear |
| Salem | 0% | $200 savings on $4k watch | Luxury goods, jewelry |
Oregon: The West Coast Winner
Living in Portland for two years showed me the real picture. That $0 tax at Powell's Books feels magical. But come April? My state income tax return was brutal. They get their money somehow.
What everyone asks about Oregon:
- Yes - Absolutely no sales tax on anything
- But - 9.9% income tax if you earn over $125k
- Bonus - No self-service gas (they pump for you)
Where Does the Money Come From?
So how do these states without sales tax in the US fund everything? They're not running charity operations. Here's the real breakdown:
Alaska: Oil revenues cover almost everything (thank you, North Slope). They actually pay residents yearly dividends instead of taxing them.
Delaware: Corporate taxes - over 60% of Fortune 500 companies are incorporated there. Those filing fees add up.
Montana: Coal and oil royalties, plus they tax tourists heavily in resort areas.
New Hampshire: Property taxes are insane ($6k/yr avg vs $3k nationally). Also taxes dividends and interest heavily.
Oregon: High income taxes (9.9% top rate) and corporate taxes. Plus they tax beer and wine heavily.
What Visitors Need to Know
Planning a shopping trip to these states without sales tax in the US? Smart move. But learn from my mistakes:
- Big ticket items: That $5,000 engagement ring saves you $350-500 in Oregon vs California
- Electronics: Dell outlet in North Sioux City, SD? Better drive 40 mins to Sioux Falls, SD where tax is 0%
- Car purchases: Oregon dealers get folks from Washington daily saving 6.5-10%
The Border Town Phenomenon
Ever wonder why there are so many malls right on state borders? Here's the shopping advantage:
| Tax-Free State | Bordering Tax State | Border Town Hotspots | Typical Savings |
|---|---|---|---|
| New Hampshire | Massachusetts | Salem, Nashua | 6.25% on all purchases |
| Oregon | Washington | Portland, Vancouver WA | 6.5-10.1% depending on WA county |
| Delaware | Maryland | Christiana | 6% sales tax difference |
| Montana | Idaho | Missoula | 6% difference |
What Residents Actually Pay
Living in these states without sales tax in the US isn't free money. Here's what real residents face:
- Oregon: Median property tax $3,500/yr + 8-10% income tax
- New Hampshire: Highest property taxes in US ($6,400 avg)
- Delaware: High corporate taxes keep wages lower
- Alaska: Everything costs 30% more due to shipping
- Montana: Low wages offset tax savings
My Portland neighbor bought a $60k car tax-free saving $5k. Then paid $4,800 in extra income tax that year. Net savings? $200. Not nothing, but not life-changing.
Tourist Impact: What to Expect
Visiting these states without sales tax in the US? Beyond shopping, here's the real travel info:
Oregon Highlights
- Powell's City of Books (Portland): World's largest indie bookstore. Open 9am-9pm daily. No sales tax on $100 book = $8 savings
- Nike Employee Store (Beaverton): Tax-free discounts if you get a pass
New Hampshire Must-Sees
- Merrimack Premium Outlets: 100+ stores, open 10am-9pm. Saved $42 on $700 purchase vs Massachusetts
- Tax-free liquor stores: State-run, cheaper than neighboring states
Delaware's Shopping Havens
- Christiana Mall: Open 10am-9pm Mon-Sat, 11am-7pm Sun. Apple Store savings: $70 on $1000 MacBook
- Rehoboth Beach boardwalk: Tax-free souvenirs and beach gear
The Fine Print: What's Really Taxed
Don't assume everything escapes taxation in these states without sales tax in the US:
- Cigarettes: All states tax these heavily ($2-3/pack)
- Alcohol: State-controlled systems with built-in markup
- Hotel stays: Most charge occupancy taxes (5-10%)
- Car rentals: Special taxes up to 10%
- Prepared food: Some states have restaurant taxes
Frequently Asked Questions About States Without Sales Tax in the US
Can I buy a car tax-free in these states?
Yes, but only if you register it there. If you buy in Oregon but live in California, CA will charge you tax when you register it. I tried this with a motorcycle - saved nothing.
Do online purchases get taxed?
Technically yes if the retailer has physical presence in your state. Amazon charges tax everywhere now. But smaller retailers might not.
Are there expiration dates on these tax policies?
Oregon has voted on sales tax 9 times since 1930. Always fails. New Hampshire would riot if proposed. These are deeply ingrained policies.
Which state saves the most money?
For shoppers: Delaware or New Hampshire (true 0%). For residents: Alaska (they PAY you via oil dividends).
Can I ship purchases home tax-free?
Legally, no. You owe "use tax" in your home state. But honestly? Almost no one pays it for small purchases. Would you self-report a $50 shirt?
The Bottom Line
Searching for states without sales tax in the US reveals five options, but with major differences. Alaska taxes locally, Montana hits tourists, Oregon taxes incomes instead. For shoppers, Delaware and New Hampshire deliver true tax-free experiences. But living there? You'll pay one way or another - property taxes, income taxes, or higher costs elsewhere.
My take? If you're making a big purchase, road-tripping to these states makes financial sense. But choosing where to live based solely on sales tax is shortsighted. I'll take Oregon's no-sales-tax life despite the income hit - not worrying about tax calculations every purchase is worth something. Plus, those Powell's Books receipts look beautiful with that round $0.00 tax line.
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