5 States With No Sales Tax: What You Should Know

There are five U.S. states with no statewide sales taxes, meaning the price listed for an item is generally the price you’ll pay at checkout.

That said, even some states that don’t have a retail sales tax at the state level may impose taxes on particular items or services, like lodging or marijuana sales.

Living in one of the five states with no sales tax may seem appealing because you won’t have to pay tax when shopping for goods or services, but these states usually still collect a variety of other taxes, including income and property taxes.

States with no sales tax

The five states with no sales tax are:

• Alaska
• Delaware
• Montana
• New Hampshire
• Oregon

Even though these states don’t have a general sales tax, there are caveats to consider. In Alaska, for example, several local municipalities impose a sales tax, while Montana allows resort and local taxes in special designated areas. And all the states with no sales tax do levy other taxes on specific businesses or services.

What is sales tax?

A sales tax is a type of tax applied to goods and services at the time of purchase. Consumers pay the sales tax on the goods or services they purchase, which makes it a type of consumption tax because people are taxed when they spend money.

The businesses selling the goods and services that are taxed collect the taxes and remit that money to the appropriate government entity. Because sales tax isn’t paid directly to the government by the consumer, it’s considered an indirect tax.

There are 45 states that have a sales tax, and in those states that rate is applied to the sale of all goods and services in the state, though there may be some exceptions for specific products and services. Also, 38 of those states allow local governments to impose additional sales taxes, according to the Tax Foundation.

While paying sales taxes can be a burden, you may qualify for the sales tax deduction when you file your taxes.

That is, as part of the broader state and local tax (SALT) deduction, you can claim either the sales tax deduction or the state income tax deduction — but not both — and reduce your taxable income by as much as $10,000 if you itemize your taxes.

Keep in mind that the $10,000 cap on the SALT deduction may change as Congress looks to extend the expiring Tax Cuts and Jobs Act (TCJA).

States with no sales tax still impose some taxes

While there’s no general sales tax in Alaska, Delaware, Montana, New Hampshire or Oregon, these states may still impose taxes on specific goods and services.

Alaska: Allows local municipalities to levy a sales tax. Items subject to local taxes include: raw fish, hotel or motel accommodations, severance, liquor and tobacco and gaming. Here’s Alaska’s sales tax page.

Delaware: Doesn’t allow local municipalities to levy a sales tax. Imposes a gross receipts tax on the seller of goods or provider of services. Here’s more on Delaware’s gross receipts tax. Imposes excise taxes, including on gasoline and cigarettes, as well as some local taxes, such as on hotel or motel accommodations.

Montana: Allows resort and local option taxes in three special designated areas. Items subject to taxes include: liquor and tobacco, cannabis, health care facilities, telecommunications and hotel or motel accommodations. See Montana’s miscellaneous taxes and fees.

New Hampshire: Doesn’t allow local municipalities to levy a sales tax. Items subject to tax include: meals and hotel or motel accommodations, tobacco and communications services. Read more about New Hampshire’s meal and room rental tax.

Oregon: Doesn’t allow local municipalities to levy a sales tax. Items subject to tax include: new vehicles purchased outside of the state, tobacco, marijuana, hotel or motel accommodations and heavy equipment rental.

States with the highest sales tax rates

Sales tax rates vary widely from state to state. At one extreme, five states have no general sales tax while the statewide sales tax in California is the highest in the country, at 7.25 percent. With local sales taxes factored in, the total sales tax in some places in California is as high as 10.75 percent (as of January 2025).

While California ranks high for its sales tax rates, it’s edged out by several states that have a higher average combined state and local sales tax rate, according to the Tax Foundation. California’s average combined state and local sales tax rate is 8.8 percent. The states with the highest average sales tax rates are below.

States with highest average combined state and local sales tax rates

Bottom line

Sales taxes affect your finances, and they’re important to keep in mind because you must pay them on many goods and services. But making a major life decision about where you live based on sales tax alone is probably not a good idea. Rather, it’s important to remember that, depending on where you live, you may also be required to pay income tax, property tax, capital gains tax and other taxes. See each state’s income tax rates.