Legally skipping sales tax on online purchases is possible, but the situations are narrower than most shoppers expect. Since 2018, nearly every online retailer has been required to collect sales tax based on where an order ships, and the platforms that host smaller sellers collect it too. That leaves four honest paths to a tax-free order: shipping to a state without a sales tax, buying products that are exempt by law, timing your purchase during a sales tax holiday, or qualifying for an organizational or resale exemption.
Why Online Orders Are Almost Always Taxed Now
Before 2018, out-of-state online sellers only had to collect sales tax where they had a warehouse, office, or employees. The Supreme Court’s decision in South Dakota v. Wayfair, Inc. allowed states to require collection from any seller with significant economic activity in the state, and nearly every state with a sales tax adopted rules based on the South Dakota model within a few years.1Legal Information Institute. South Dakota v. Wayfair, Inc.
On top of that, almost every state with a sales tax has marketplace facilitator laws that push the collection duty onto the platform itself. Amazon, eBay, Walmart.com, and Etsy handle sales tax on behalf of their third-party sellers, so even buying from a small independent shop through a marketplace doesn’t get you around it. Finding an online purchase where tax simply isn’t charged is now the exception.
The Use Tax That Follows You Home
Before you plan a workaround, know this: if a retailer doesn’t collect sales tax on your purchase, you almost certainly owe use tax to your home state. Use tax exists specifically to close the gap when sales tax isn’t collected at checkout. It applies at the same rate as your state’s sales tax, and reporting it is your responsibility.
Most states with a sales tax include a use tax line on the individual income tax return. If you bought something online and weren’t charged sales tax, you’re supposed to add up those purchases and pay the equivalent when you file. Compliance is low because states have limited ability to audit personal purchases, but the obligation is real, and ignoring it is tax evasion.
That matters for a strategy you’ll see suggested online: shipping to a friend or mailbox in a no-tax state to dodge the charge at checkout. It doesn’t eliminate the tax. If you live in a taxing state and use the goods there, you still owe use tax on them regardless of where the package was first addressed.
Shipping to a State Without a Sales Tax
Five states don’t impose a statewide sales tax: Delaware, Montana, New Hampshire, Oregon, and Alaska. If you live in one of these states and ship items to your home address, retailers won’t add sales tax at checkout, and there’s generally no separate use tax to worry about.
Alaska comes with an asterisk. The state itself charges no sales tax, but roughly 110 of its 162 municipalities impose their own local sales taxes at rates ranging from 1% to 7%.2State of Alaska Department of Commerce. Sales Tax Anchorage has no local sales tax; Juneau charges 5%. Whether an online retailer collects the local tax depends on whether the retailer has enough activity in the borough to trigger collection.
For residents of Delaware, Montana, New Hampshire, and Oregon, the zero-rate advantage is straightforward. But renting a shipping address in one of these states to dodge tax on items you’ll actually use back home doesn’t eliminate the obligation. It just moves it to your use tax return.
Products Exempt by Law
Some product categories are exempt from sales tax by law in many states, regardless of who’s buying. The exemptions are built into the tax codes retailers use at checkout, so you don’t need paperwork. The tax simply doesn’t appear.
- Prescription medications are exempt in nearly every state. Only a couple still tax them.
- Unprepared groceries (food bought for home preparation) are exempt at the state level in over three dozen states, though a handful still tax them at a reduced or full rate.
- Clothing is permanently exempt in Minnesota, New Jersey, Pennsylvania, and Vermont. Massachusetts, New York, and Rhode Island exempt clothing up to a per-item cap, typically between $110 and $250.
- Durable medical equipment like wheelchairs, prosthetics, hearing aids, and oxygen equipment is exempt in most states, generally when prescribed or recommended by a medical provider.
Retailers apply these exemptions through product classification codes, so it happens automatically at checkout. If you were charged tax on something that should have been exempt, check your shipping address first (exemptions depend on the destination state) and then contact customer service for a correction.
Timing Purchases for a Sales Tax Holiday
More than 20 states hold sales tax holidays each year, temporarily suspending sales tax on specific categories. These apply to online orders shipped to addresses in participating states, not just in-store shopping. Timing a large purchase to fall inside one of these windows is one of the simplest legal ways to save.
Common holiday categories include:
- Back-to-school holidays, typically held in late July or August. Qualifying items usually include clothing and footwear (often capped at $100 per item), school supplies ($50 or less in many states), and sometimes computers and accessories (with caps between $750 and $1,500).
- Severe weather and disaster preparedness holidays, exempting generators, batteries, flashlights, and emergency supplies for a weekend, usually in late winter or early spring.
- Energy-efficient product holidays, covering Energy Star appliances and related products, sometimes with per-item caps around $1,500.
- Hunting and Second Amendment holidays in a handful of states, exempting firearms, ammunition, and hunting supplies for a designated weekend.
For 2026, states with announced holidays include Alabama, Arkansas, Connecticut, Florida, Iowa, Maryland, Massachusetts, Mississippi, Missouri, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia, among others. Dates and qualifying items change annually, so check your state’s Department of Revenue site before planning around one.
Watch the per-item price cap carefully. If a single item exceeds the threshold (say, a $120 jacket during a holiday capped at $100 for clothing), the entire item is usually taxable, not just the amount over the cap.
Exemption Certificates for Nonprofits, Schools, and Government Buyers
If you’re purchasing on behalf of a nonprofit, school, religious organization, or government agency, the organization may qualify for a sales tax exemption. This isn’t available to individual consumers for personal shopping. It applies to purchases made for the exempt organization’s operations.
The organization applies for tax-exempt status with the state’s Department of Revenue and receives an exemption number or certificate. You then present that certificate to retailers, or upload it to their online portals, so they know not to charge tax on qualifying purchases. The certificate typically includes the organization’s legal name, address, the state-issued exemption number, and a description of why the purchase qualifies.
Federal 501(c)(3) status is a starting point, but it doesn’t automatically grant a state sales tax exemption.3Internal Revenue Service. Exemption Requirements – 501(c)(3) Organizations Each state has its own application, and some require you to demonstrate the charitable nature of the organization independently. An IRS Employer Identification Number is usually part of the application, but not enough on its own.
Certificates don’t last forever in every state. Some have no formal expiration date; others require renewal every one to five years. If your certificate lapses, retailers start charging tax again at checkout. Keep a digital copy of the current certificate ready for new vendors or reverification requests.
Resale Certificates for Business Inventory
If you run a business that buys products to resell, a resale certificate lets you purchase inventory without paying sales tax. The tax gets collected later, when you sell the item to the final customer. The certificate shifts the obligation down the chain rather than eliminating it.
To get one, register for a sales tax permit with your state’s revenue agency. Most states charge no fee for the permit. You then give the certificate to your suppliers, certifying that the goods are for resale in the ordinary course of business. The Multistate Tax Commission publishes a Uniform Sales and Use Tax Resale Certificate that many states accept, which simplifies things if you buy from suppliers across state lines.4Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate – Multijurisdiction
Validity periods vary by state. Some certificates never expire, others require annual renewal, and some run two to five years. If your supplier doesn’t have a valid certificate on file, they must collect sales tax from you regardless of your intent to resell.
Don’t Use a Resale Certificate for Personal Shopping
Using a resale certificate to buy things for personal use is fraud, and states pursue it. Penalties vary, but commonly include the unpaid tax plus a percentage-based penalty. Some states impose a flat penalty of 50% of the tax due for each improper use, assessed even without proof of intentional evasion. Others add flat per-certificate fines on top of back taxes and interest. In substantial cases, criminal prosecution is possible, with felony charges, heavy fines, and revocation of your sales tax permit on the table. Keep records that clearly connect each tax-free purchase to inventory intended for resale.
Registering Your Exemption With Online Retailers
Having a valid exemption or resale certificate is only half the job. You also need to register it with each online retailer where you shop. Most major platforms have dedicated portals. Amazon’s Tax Exemption Program, for example, lets qualifying organizations and businesses upload their certificates for review and linking to the account.5U.S. General Services Administration. Amazon.com Tax Exemption Procedures
You typically upload a scanned copy of your signed certificate, enter your organization’s details, and wait for verification, which usually takes a day or two. Once approved, the exempt profile becomes available during checkout, though you often have to actively select it for each qualifying order. The system doesn’t assume every purchase qualifies.
If you buy something before verification finishes, or forget to select the exempt profile, you’ll be charged tax. Most retailers will refund the tax portion, but you’ll usually need to request it through customer service. Some also require you to link the exemption to a specific shipping address or payment method, so check each platform’s requirements when you set up the account. There’s no universal portal, so if you shop across a dozen sites, plan to upload your certificate a dozen times.