Five states have no general sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. They’re sometimes grouped by the acronym NOMAD. In these states with no sales tax, the price on the tag is usually the price you pay at the register, but a zero percent state rate doesn’t guarantee tax-free shopping everywhere. Local governments in Alaska and a handful of Montana resort towns still collect their own sales taxes, and all five states apply excise taxes to specific goods like fuel, tobacco, cannabis, and prepared meals.
The Five States and How Each Handles It
Each state arrives at “no sales tax” a little differently, and the differences matter if you’re shopping, moving, or running a business.
Alaska has no state sales tax, but the state constitution gives cities and boroughs broad authority to impose their own. The statewide rate is zero; the local rate depends on where you are.1Division of Community and Regional Affairs. Alaska Sales Tax Information
Delaware taxes businesses through a gross receipts tax rather than taxing shoppers at checkout. The seller pays it, and it doesn’t appear on your receipt.2Justia. Delaware Code Title 30 – 2120 Computation of Gross Receipts
Montana charges no general sales tax on in-store or online purchases shipped to Montana addresses, though a small number of resort communities collect a local tax.3Montana Department of Revenue. Sales Tax Guidance for Montana Business and Residents
New Hampshire takes nothing on general retail purchases like clothing, electronics, or groceries. It funds itself mainly through property taxes and industry-specific taxes.
Oregon imposes no general sales or use tax. No Oregon retailer is required to collect sales tax on general merchandise.4Oregon Department of Revenue. Sales Tax in Oregon – Businesses
Where Local Taxes Still Apply
Alaska Municipalities
More than 100 Alaska cities and boroughs impose their own sales taxes, authorized by state statute.5Justia Law. Alaska Statutes 29.45.650 – Sales and Use Tax Rates run from 1 percent to 7 percent, with most falling between 2 and 5 percent.6Division of Community and Regional Affairs. Alaska Tax Facts Each jurisdiction sets its own rate and its own list of exemptions, so what you pay can change from one town to the next.
Montana Resort Communities
Montana permits certain resort communities to collect a local tax of up to 3 percent on lodging, restaurant and bar sales, and destination recreation.7Montana State Legislature. Montana Code 7-6-1503 Ten communities currently do so, including Whitefish, Big Sky, and West Yellowstone.8Montana Department of Revenue. Local Resort Tax Outside those areas, Montana is fully sales-tax-free.
Delaware, New Hampshire, and Oregon do not allow local sales taxes. In those three states, the tag price is the final price on general merchandise, consistently.
Excise Taxes You’ll Still Pay
All five states apply excise taxes to specific products. These aren’t broad retail taxes, but they can be substantial.
Meals and Lodging
New Hampshire charges 8.5 percent on restaurant meals, hotel rooms, and car rentals.9New Hampshire General Court. New Hampshire Revised Statutes 78-A:6 Visitors expecting a completely tax-free trip are often surprised. Dining out or booking a room in New Hampshire costs noticeably more than the menu or listed rate.
Fuel and Tobacco
Every NOMAD state taxes gasoline and diesel at the pump and applies a tobacco excise tax. Delaware charges 23 cents per gallon on motor fuel and $3.60 per pack on cigarettes following an increase that took effect in September 2025.10Delaware General Assembly. House Bill 215 The other four states set their own rates.
Cannabis
Oregon and Montana both tax recreational marijuana at rates that exceed most states’ general sales tax. Oregon charges 17 percent of retail price.11Oregon Department of Revenue. Marijuana Tax Distributions Montana charges 20 percent at the state level, plus up to another 3 percent locally.12Montana Department of Revenue. Cannabis Tax
Oregon’s Narrow Taxes
Oregon adds a $15 excise tax on new bicycles with wheels 26 inches or larger priced above $200,13Oregon Department of Revenue. Bicycle Excise Tax and a 2 percent tax on heavy equipment rentals collected from the renter at the time of the transaction.
Buying Online From a No-Sales-Tax State
If your shipping address is in Oregon, Montana, Delaware, or New Hampshire, online retailers generally don’t charge you sales tax. The 2018 Supreme Court decision in South Dakota v. Wayfair lets states require out-of-state sellers to collect sales tax, but only states that actually have a sales tax can use that authority.4Oregon Department of Revenue. Sales Tax in Oregon – Businesses3Montana Department of Revenue. Sales Tax Guidance for Montana Business and Residents
Alaska is the exception. Some Alaska municipalities have adopted economic nexus rules that require larger online sellers to collect local tax on deliveries within their jurisdictions. Whether you pay depends on the specific city or borough receiving the shipment.
Cross-Border Shopping and Use Tax
Driving into a NOMAD state to make a big purchase doesn’t always beat the tax. If you live in a state with a sales tax, that state almost certainly also has a use tax designed to catch exactly this situation. Use tax applies when you buy something without paying sales tax and then bring it home to use.
Vehicles are the clearest example. Buy a car in Delaware or Oregon, drive it home, and your state’s motor vehicle agency will typically collect the use tax when you title and register it. The rate usually matches your state’s sales tax rate, so the register-counter savings disappear at the DMV.
Use tax also applies to furniture, electronics, and other goods bought on a tax-free shopping trip. Most states expect you to self-report those purchases on your annual income tax return. Compliance is historically low, but the obligation is real, and audits can produce back taxes and penalties. A cross-border run saves you money only when your home state has no use tax or the items you buy are exempt.
How These States Pay for Government
No sales tax means the revenue comes from somewhere else, and each of the five states has picked a different mix.
Delaware leans heavily on its business gross receipts tax, a corporate income tax, and a personal income tax.2Justia. Delaware Code Title 30 – 2120 Computation of Gross Receipts Oregon collects personal income tax and imposes the Corporate Activity Tax on businesses with more than $1 million in Oregon commercial activity, at $250 plus 0.57 percent of taxable activity above that threshold.14Oregon Department of Revenue. Corporate Activity Tax (CAT) Montana uses personal income tax and property taxes.
New Hampshire has no general income tax and no general sales tax, and its interest and dividends tax was fully repealed effective January 1, 2025.15NH Department of Revenue Administration. Repeal of NH Interest and Dividends Tax Now in Effect Property taxes, among the highest in the country, do most of the work.
Alaska has no state income tax and no state sales tax. It funds itself largely through oil revenue and investment earnings from the Alaska Permanent Fund, and it’s the only state that pays residents an annual dividend from state investment income rather than collecting a broad tax from them.
Every state trades one tax for another. Oregon and Montana residents owe income taxes they wouldn’t pay in Alaska or New Hampshire. New Hampshire homeowners face some of the steepest property tax bills in the country. What’s absent at the register shows up elsewhere on the balance sheet.