Among the 50 states, only 5 states has no sales tax. Compared to the income tax, it falls behind but there are good reasons why these five states have no sales tax. So what states have no sales tax on purchased goods and services? In alphabetical order; Alaska, Delaware, Montana, New Hampshire, and Oregon has no sales tax.
However, there is a state sales tax. Alaska and Montana allow local government to tax. So in reality, saying that Alaska and Montana have no sales tax is quite misleading. Other than these two—Delaware, New Hampshire, and Oregon is free of sales tax. One thing to know is Delaware has no state or local sales tax but charges gross receipts tax on businesses.
Although no sales tax brings the costs of purchases and services down, the cost of living in that particular state is what you should keep in mind. For example, the following states have the lowest sales tax of any but the cost of living is a lot cheaper than Alaska, New Hampshire and Oregon.
- Alabama 4% sales tax
- Colorado 2.9% sales tax
- Georgia 4% sales tax
- Hawaii 4% sales tax
- Louisiana 4.45% sales tax
- Missouri 4.23% sales tax
- New York 4% sales tax
- North Carolina 4.75% sales tax
- North Dakota 5% sales tax
- Oklahoma 4.5% sales tax
- South Dakota 4.5% sales tax
- Wisconsin 5% sales tax
- Wyoming 4% sales tax
Sure, added with the local sales tax, the above percentages are going to be higher but not all states have around 4% sales tax. Whether the sales tax is something important to you when considering the costs in a state, you should take into account the cost of living, not the actual sales tax rate. For that, visit our article where explain the cost of living in the United States.