You can legally avoid sales tax on some online purchases, but the situations are narrower than they used to be. The practical routes are shipping to a state with no sales tax, buying product categories your state exempts, timing purchases to a sales tax holiday, and qualifying for a nonprofit or resale exemption. Everything else is either taxed at checkout or triggers a use tax obligation you’re supposed to report yourself. Here is how to avoid sales tax online where the law actually allows it, and where the common workarounds fall apart.
Why Most Online Orders Get Taxed Now
Before 2018, a retailer needed a physical presence in your state before your state could require it to collect sales tax. The Supreme Court changed that in South Dakota v. Wayfair, Inc., replacing the physical-presence rule with economic nexus: once a seller exceeds a sales threshold in your state, it must collect and remit tax regardless of where it operates.1Tax Foundation. South Dakota v. Wayfair – Tax Glossary The most common trigger is $100,000 in annual sales into a state.
Nearly every state with a sales tax has also passed marketplace facilitator laws, which shift collection responsibility onto platforms like Amazon, eBay, Etsy, and Walmart Marketplace. Even a small third-party seller who has never thought about tax nexus doesn’t matter to you as a shopper: the platform handles the calculation based on your shipping address. So “buy from a small seller to skip tax” no longer works on any major marketplace.
Ship to a State with No Sales Tax
Five states impose no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.2Tax Foundation. State and Local Sales Tax Rates, 2026 Because online tax is calculated on the delivery address, shipping an order to one of these states generally produces a zero tax line at checkout. Shoppers with family in these states, or who keep a second address there, sometimes route purchases accordingly.
Alaska is the exception you have to watch. It’s the only one of the five that allows local governments to impose their own sales taxes, and many municipalities do.2Tax Foundation. State and Local Sales Tax Rates, 2026 A package sent to certain Alaskan cities may carry a local charge even with no state tax involved. Delaware, Montana, New Hampshire, and Oregon have no local sales taxes either, so they’re genuinely tax-free for most consumer goods.
One honest caveat: if you live in a state with sales tax and ship the item to a no-tax state only to bring it home and use it, you legally owe use tax to your home state. More on that at the end.
Buy Products Your State Exempts
Every state with a sales tax carves out exemptions for specific product categories, and those exemptions apply online exactly as they do in stores. The main categories are groceries, prescription drugs, clothing, and durable medical equipment.
Groceries and Prescription Medications
Most states exempt unprepared grocery food, and prescription medications are exempt in virtually every state that collects sales tax. Order through an online grocery service or a mail-order pharmacy and the exemption applies automatically based on how the retailer classifies the item. Over-the-counter medications and prepared foods usually don’t get the same treatment and remain taxable.
Clothing
Eight states give clothing some form of sales tax relief.3Tax Foundation. Map: State Sales Taxes and Clothing Exemptions Four exempt clothing entirely. The other four impose a per-item price cap running anywhere from $50 to $250; a garment above the cap becomes taxable, or in some states only the amount above the cap is taxed. If you live in one of these states, the tax line at checkout on everyday clothing should read zero for qualifying items.
Medical Equipment
Durable medical equipment such as wheelchairs, oxygen concentrators, nebulizers, and prosthetic devices is exempt in many states when purchased with a prescription. The exemption typically requires the equipment to be prescribed by a licensed physician for the named patient. Online retailers usually ask you to upload the prescription before applying the exemption.
Time Purchases to a Sales Tax Holiday
More than a dozen states run temporary tax-free windows each year, most often in late July or August for back-to-school shopping. They typically last two to seven days and cover clothing, school supplies, and computers.
Price caps are the catch. Clothing caps are frequently $100 per item; computer and electronics caps run higher, often $1,000 to $1,500. A $90 jacket during the holiday is tax-free. A $250 jacket, where the cap is $100, gets taxed on the full amount in most states, or on just the excess in a few.
Holidays apply to online orders based on the delivery address, not the seller’s location. Major retailers update their tax engines automatically, but smaller sellers sometimes don’t. If you order during a holiday window and the exemption doesn’t show up at checkout, it’s worth pausing to check whether the retailer’s system has been updated before finishing the purchase.
Digital Goods Get Taxed Unevenly
Digital purchases follow their own patchwork of rules. Roughly 30 states tax at least some digital goods, and they disagree sharply on what counts.4National Conference of State Legislatures. Taxation of Digital Products Some tax downloads (ebooks, music files, movie files) but not streaming subscriptions. Others tax both. On cloud-based software subscriptions the split is roughly even: about half of sales-tax states treat them as taxable and half don’t.
The same Netflix or Spotify subscription, Kindle ebook, or cloud storage plan can be taxed in one state and untaxed in another based on your registered address. Because the taxable event is tied to where you use or access the product, you can’t “ship” a digital purchase to a tax-free jurisdiction the way you can a physical one. If you move, expect your billing to change.
Exemptions for Nonprofits, Government, and Resellers
Nonprofits and Government Agencies
Organizations with federal tax-exempt status under section 501(c)(3) can generally buy tax-free when the items are used for the exempt purpose. Government agencies hold a similar exemption on purchases tied to public operations. Both need to document their status with the seller. Major online platforms now run dedicated portals where an organization can upload its exemption certificate once and have a tax-free flag applied to future orders on that account.
Resale Certificates
If you’re buying inventory to resell rather than use, you can avoid paying sales tax on the purchase by giving the seller a resale certificate. The logic is that sales tax should be collected only once, from the final consumer; you’ll charge tax to your customers when you sell to them.
Getting a resale certificate starts with obtaining a sales tax permit from your state’s tax authority. Once issued, you present the certificate to the seller (usually by uploading it to your account on the platform). Not every seller is required to accept resale certificates, and some decline because they bear liability if the certificate turns out to be invalid.
International Orders Are No Longer a Shortcut
Buying from overseas retailers used to sidestep sales tax, and packages under $800 in value typically avoided customs duties as well. That’s over. The federal government suspended the $800 duty-free de minimis threshold in late 2025 for most imported goods,5U.S. Customs and Border Protection. Factsheet Suspension of Duty-Free De Minimis Treatment and a February 2026 executive order continued the suspension indefinitely, so all international shipments are now subject to applicable duties, taxes, and fees regardless of value.6The White House. Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries
Duty rates depend on the item. Many consumer electronics and common goods fall between 0% and 10%, while categories like textiles and footwear run higher. You may also see a merchandise processing fee from Customs and a brokerage fee from the shipping carrier that clears the package,7U.S. Customs and Border Protection. Internet Purchases often adding $10 to $30 to a small parcel. Low-cost international orders are no longer the deal they were.
Use Tax: The Limit on Tax-Free Shipping Tricks
When a seller doesn’t collect sales tax on a purchase, that doesn’t automatically mean you owe nothing. Nearly every state with a sales tax also imposes a use tax, a self-reported levy that mirrors the state’s sales tax rate.8Legal Information Institute. Use Tax It applies when you buy something without paying sales tax and then store, use, or consume it in a state that would have taxed the sale.
Most state income tax returns include a line for use tax on untaxed purchases. You tally the purchases and multiply by your local combined rate. Compliance on small consumer purchases is low in practice, which is exactly why states pushed marketplace facilitator laws to move collection onto sellers. But the obligation is real, and unreported use tax can produce penalties and interest if the state audits you.
This is why shipping a package to a friend in Oregon or Delaware and then carrying it home doesn’t legally erase the tax. If you use the item where you live, your state expects the equivalent of its sales tax. Some states now receive transaction data from large online platforms, narrowing the gap between what residents buy and what they report.