No sales tax states are rare in the U.S., so it’s natural to ask what state has no? Understanding where sales tax doesn’t apply—and the exceptions that still might—helps shoppers save on big purchases and helps businesses plan compliance and logistics with fewer surprises.
Which No Sales Tax States Exist?
As of today, only five no sales tax states remain:
- Alaska – No statewide sales tax, but many municipalities charge local sales tax.
- Delaware – No state or local sales tax; popular for tax-free shopping and business registrations.
- Montana – No general sales tax; certain resort/industry-specific taxes may apply.
- New Hampshire – No sales tax; separate meals & rooms taxes can apply.
- Oregon – No state or local sales tax on most retail purchases.
Even in no sales tax states, specific taxes (lodging/meals/tourism) can still apply depending on the locality and activity.
Why No Sales Tax States Matter
Knowing the tax states can influence:
- Consumer savings on high-ticket items (electronics, jewelry, appliances).
- Business strategy for inventory placement and pricing.
- Compliance scope for eCommerce sellers (fewer states to collect in—though nexus rules still matter).
Online Shopping, Use Tax, and No Sales Tax States
Buying from a no-sales-tax state doesn’t always mean “tax-free.” Most states require use tax when residents buy out-of-state without sales tax and use the item at home. Many marketplaces/platforms now collect based on the buyer’s address, regardless of where the seller is located.
Nexus Still Rules the Day
Even if you operate in a no-tax state, you may still need to collect in other states if you have:
- Physical nexus (employees, office, inventory).
- Economic nexus (e.g., $100k in sales or 200+ transactions, threshold varies by state).
- Marketplace nexus (platform may collect for you, but you may still need to file).
Key Takeaways
- Only five no sales tax states: Alaska, Delaware, Montana, New Hampshire, Oregon.
- Local and activity-specific taxes can still apply.
- Use tax may be due in the buyer’s state.
- Nexus rules determine where businesses must collect, even if based in a no-tax state.
About JPTM Consulting
At JPTM Consulting, we help businesses from nexus analysis and state registrations to automation and filings, we keep you compliant and confident.
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