States With No Sales Tax

Five states charge zero sales tax at the state level: Alaska, Delaware, Montana, New Hampshire, and Oregon. Collectively known as the NOMAD states, they represent a genuine financial advantage for everyday purchases, but the full tax picture is more complicated than the headline suggests.

The Five States With No Sales Tax

Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax. That covers everything from groceries to cars to clothing, with no percentage added at the register.

Alaska is the one exception worth flagging. The state has no statewide sales tax, but Alaska allows municipalities to impose their own. Juneau charges 5%, Sitka charges 6%, and Ketchikan charges 8%. If you live in a rural borough with no local government, you pay nothing. If you live in Anchorage, you also pay nothing, since Anchorage has no local sales tax. Location within the state matters significantly.

Delaware, Montana, New Hampshire, and Oregon have no state sales tax and do not permit local sales taxes either. What you see on the price tag is what you pay.

No Sales Tax Does Not Mean Low Taxes Overall

States without sales tax have to fund their governments somehow. Most shift the burden to income or property taxes.

New Hampshire has no sales tax and no income tax on wages, but it does tax interest and dividend income, and its property taxes are among the highest in the country. The effective property tax rate in New Hampshire is approximately 1.86%, which ranks it in the top five nationally. For homeowners, that adds up fast.

Oregon has no sales tax, but it has a progressive income tax that tops out at 9.9% for high earners, one of the steeper rates in the country. Delaware's top income tax rate is 6.6%. Montana's top rate is 6.75%. These states are not tax-free. They have simply chosen a different mechanism for collecting revenue.

Alaska is the outlier in the best possible way. It has no statewide sales tax, no state income tax, and it actually pays residents through the Permanent Fund Dividend. The 2023 dividend was $1,312 per eligible resident. The tradeoff is a high cost of living, particularly for groceries and utilities in remote areas.

If you want to see how your full state and local tax burden compares, the Live or Die Here tax calculator runs the numbers based on your income, home value, and spending.

What About Sales Tax on Cars and Clothes?

Two purchases drive a lot of the interest in sales-tax-free states: cars and clothing.

For a $40,000 car purchase, a 7% sales tax adds $2,800 to the price. In any of the five NOMAD states, that $2,800 stays in your pocket. That is a real and immediate savings, which is why some buyers specifically plan large purchases around state lines.

For clothing, the calculus is similar. A few other states, including Pennsylvania and New Jersey, exempt most clothing from sales tax even though they charge sales tax on other goods. But for a true zero-rate on all purchases, only the NOMAD states deliver.

Online purchases follow the shipping address, not the seller's location. If you live in Oregon and order from a retailer in California, you pay no sales tax. The 2018 Supreme Court ruling in South Dakota v. Wayfair requires out-of-state sellers to collect sales tax based on where the buyer is located. Living in a no-sales-tax state is a permanent advantage for online shopping.

Which No-Sales-Tax State Is Actually the Best Deal?

The answer depends on what you value and how you earn income.

For retirees living on investment income, New Hampshire's dividend tax (being phased out by 2026) and high property taxes make it less attractive than Oregon or Delaware. For high earners, Oregon's 9.9% top income tax rate is a significant cost. For younger buyers making large purchases like cars or home goods, any of the five states delivers immediate savings at checkout.

Alaska offers the most complete tax relief for people who can handle the cost of living and geographic tradeoffs. Montana offers a reasonable balance of low cost of living and no sales tax, though its income tax rate is not negligible.

For a broader comparison of how these states stack up on total tax burden, see our post on States With No Income Tax in 2026 and our breakdown of States With the Lowest Property Taxes.

Key Takeaways

• The five NOMAD states (Alaska, Delaware, Montana, New Hampshire, Oregon) are the only states with no statewide sales tax. Alaska allows local sales taxes up to 8% in some municipalities.
• Oregon's top income tax rate is 9.9% and New Hampshire's effective property tax rate is approximately 1.86%. No sales tax does not mean low overall taxes.
• On a $40,000 car purchase, avoiding a 7% sales tax saves $2,800. That savings applies to every major purchase, including online orders shipped to a no-sales-tax address.

Compare your total tax burden across all five NOMAD states and every other state at Live or Die Here.