Published June 3, 2026
Which States Have No Sales Tax?
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You've probably seen the headlines: "Move to Oregon and never pay sales tax again!" or "Start your business in Delaware for tax-free bliss!" And sure, there are five states with no statewide sales tax. But here's what those articles usually leave out: having no sales tax doesn't mean having no tax obligations, and it almost certainly doesn't mean you can avoid collecting sales tax from your customers in other states.
The five states without a statewide sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon. Each one made this choice for different reasons, and each comes with its own set of trade-offs that rarely make the clickbait headlines.
In this guide, we'll walk you through exactly which states have no sales tax in 2025, why they chose to go that route, and what catches you should know about before making any big decisions. We'll also tackle the question business owners really want answered: does setting up shop in a no-tax state actually help your bottom line? For most multi-state sellers, the answer is more complicated than you'd hope.
This guide cuts through the noise to show you exactly what these tax-free states actually offer and what they don't.
Let's start with the basics. As of 2025, five states don't collect a statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. But "no statewide sales tax" doesn't tell the whole story. Each state has its own approach to generating revenue, and understanding those differences matters if you're thinking about relocating, expanding or just trying to understand your compliance obligations.
Let's look at how each state handles its revenue. Notice how none of them actually let you off the hook completely:
Alaska stands alone as the only state on this list that allows local governments to impose their own sales taxes. So while there's no state-level sales tax, you might still encounter local sales taxes ranging from 1% to over 7% depending on the municipality.
Delaware has no sales tax at any level, but it does have a gross receipts tax that businesses pay on their total revenue. This gets passed along to consumers in the form of higher prices, even if it's not itemized on a receipt.
Montana keeps things simple with no state or local sales tax, though it does allow certain resort communities to charge a local option tax on specific goods and services.
New Hampshire has no general sales tax, but it does tax prepared meals, room rentals and vehicle rentals. So if you're eating out or staying in a hotel, you're still paying something.
Oregon has no sales tax at the state or local level, making it one of the most straightforward options on this list. The state relies heavily on income taxes instead.
The common thread? Each of these states found alternative ways to fund government services. States have to pay for roads and schools somehow. When sales tax is missing, another tax fills the gap.
The decision to forgo sales tax wasn't random. Each of these five states made deliberate choices based on their political history, economic structure and what their residents were willing to accept.
Oregon has rejected sales tax proposals at the ballot box 10 times since 1933. Oregonians have consistently voted against implementing a sales tax, viewing it as regressive and preferring to fund state services through income taxes. It's become part of the state's identity at this point.
New Hampshire built its brand around low taxes. The state constitution actually prohibits a general income tax or sales tax, and the "Live Free or Die" motto extends to fiscal policy. New Hampshire relies on property taxes, business taxes and targeted taxes on things like meals and lodging.
Delaware took a different approach. By eliminating sales tax and offering business-friendly incorporation laws, the state became a magnet for corporations. Over 60% of Fortune 500 companies are incorporated in Delaware, and the gross receipts tax on businesses generates substantial revenue without appearing on consumer receipts.
Montana has a small, spread-out population that would make sales tax collection logistically challenging and relatively low-yield. The state relies on income taxes and property taxes instead, with some targeted taxes in tourist-heavy areas.
Alaska benefits from oil revenue that other states simply don't have. The Alaska Permanent Fund, funded by oil money, actually pays residents an annual dividend rather than taxing them. But the state also gives local municipalities the power to levy their own sales taxes, creating a patchwork system.
These origin stories show why each state taxes the way it does. They also reveal a hard truth. No sales tax doesn't mean no taxes at all. It just means the tax burden shows up somewhere else.
Before you start packing boxes for a sales-tax-free state, let's talk about what you're actually signing up for. Every state needs revenue, and if it's not coming from sales tax, it's coming from somewhere else.
Oregon has one of the highest state income tax rates in the country, topping out at 9.9%. New Hampshire doesn't have a general income tax, but it does tax interest and dividends at 3% (though this is being phased out). If you're earning a solid income, you might end up paying more in state income tax than you would have paid in sales tax elsewhere.
New Hampshire consistently ranks among the highest states for property taxes. Without sales or income tax revenue, property owners shoulder a bigger share of funding schools and local services. If you're buying a home, this can add up quickly.
Delaware's gross receipts tax applies to businesses based on their total revenue, not their profits. This means businesses pay tax even if they're operating at a loss. The rates vary by industry, but they range from 0.0945% to 1.9914%. It's not visible to consumers the way sales tax is, but it affects pricing and business decisions.
Alaska is the wildcard. While there's no state sales tax, over 100 local jurisdictions impose their own sales taxes. If you're doing business in Juneau, you're dealing with a 5% local sales tax. In Anchorage, there's no local sales tax. This creates compliance complexity for businesses operating across multiple Alaska municipalities.
Montana allows certain resort communities to impose local option taxes. If you're in a tourist area like Big Sky or Whitefish, you might encounter taxes on accommodations, restaurant meals and other tourist-oriented purchases.
The reality is that sales-tax-free states aren't tax-free states. The money has to come from somewhere, and understanding where it comes from helps you make informed decisions about where to live or do business.
Alaska deserves its own section because it's genuinely different from the other four states. While Oregon, Delaware, Montana and New Hampshire have relatively straightforward "no sales tax" policies, Alaska has created something more complicated.
At the state level, Alaska collects no sales tax. But the state constitution gives local governments broad authority to levy their own taxes, and many of them do. As of 2025, over 100 boroughs and municipalities in Alaska impose local sales taxes, with rates ranging from 1% to 7.5%.
Here's what this means in practice:
For businesses selling into Alaska, this creates real compliance challenges. You can't just say "Alaska has no sales tax" and move on. You need to know which specific localities have sales tax, what the rates are and whether your products or services are taxable in each jurisdiction.
The good news? Alaska is part of the Streamlined Sales Tax governing board as an associate member, which means some standardization is happening. But if you're selling into multiple Alaska locations, you'll want to map out your obligations carefully.
For businesses based in Alaska, the local tax landscape dictates whether you price a $100 jacket at $105 in Juneau or keep it flat in Anchorage. It might even convince you to open your warehouse in Fairbanks just to avoid dealing with local tax collection entirely.
Here's the question we hear all the time: "If I incorporate in Delaware or set up my business in Oregon, can I avoid collecting sales tax?"
The short answer: probably not.
Here's why. Think of sales tax like a speed limit. You have to follow the rules of the state you're driving in, not the state where your car is registered. Sales tax obligations are based on where your customers are located, not where your business is incorporated or headquartered. This concept is called nexus, and it's the foundation of sales tax compliance.
Let's say you incorporate in Delaware and run an e-commerce business from your home in Delaware. You have no Delaware sales tax obligations because Delaware has no sales tax.
But the moment you start selling to customers in Texas, California, New York or any of the other 45 states with sales tax, you start creating nexus in those states. Once you cross their economic nexus thresholds (typically $100,000 in sales or 200 transactions), you're required to register, collect and remit sales tax in those states.
Your Delaware incorporation doesn't shield you from these obligations. Neither would incorporating in Oregon, Montana, New Hampshire or Alaska.
There are some legitimate reasons businesses choose to incorporate in no-tax states:
But if your goal is to avoid collecting sales tax from your customers across the country, incorporating in a no-tax state won't accomplish that. Economic nexus rules apply based on where you're selling, not where you're based.
This might sound counterintuitive, but even states without sales tax can create compliance obligations for out-of-state sellers. Here's how.
Remember those 100+ local jurisdictions in Alaska with their own sales taxes? Many of them have adopted economic nexus rules. If you're selling into Juneau and you exceed their local thresholds, you may need to register and collect local sales tax, even though there's no state-level tax.
The Alaska Remote Seller Sales Tax Commission was created to help simplify this. It allows remote sellers to register once and remit local sales taxes through a single filing. But you still need to track your sales into Alaska localities and determine whether you've triggered nexus.
Even in states without sales tax, there are sometimes use tax considerations for businesses. Use tax is typically paid by the buyer when sales tax wasn't collected at the point of sale. While this is more of a concern for business-to-business (B2B) transactions and large purchases, it's worth understanding that "no sales tax" doesn't always mean "no tax on purchases."
Selling into a no-sales-tax state can still create nexus for other types of taxes. If you have employees, inventory or significant business activity in Oregon, you might trigger income tax nexus even though there's no sales tax to worry about. Delaware's gross receipts tax applies to businesses with nexus in the state.
Never assume that a sales-tax-free state is a compliance-free state. The rules are different, but they still exist.
If you're a multi-state seller, here's the practical guidance you need for each of the five states with no statewide sales tax.
Selling to Oregonians is straightforward since there is zero state or local sales tax to collect. Keep an eye on your physical presence, though. Hiring an employee or storing inventory in Portland could trigger income tax obligations.
You won't collect sales tax on standard retail goods sold to New Hampshire customers. However, things change if you operate in the hospitality sector. Prepared meals, room rentals and vehicle rentals are all taxable, so you need to know exactly how the state classifies your offerings.
Shipping products to buyers in Delaware requires no sales tax collection. But if your business operations actually take place within the state, you might owe the gross receipts tax. Remember that this is a tax on your business revenue, not a line item you pass directly to the consumer.
Most transactions in Montana remain untaxed. The exception happens when you sell specific goods or services into resort communities that enforce local option taxes.
Here is where you have to do your homework. You need to identify the specific localities you sell into, check if they levy a local tax and monitor whether your sales volume crosses their economic nexus thresholds. If you have significant sales volume across the state, consider centralized registration through the Alaska Remote Seller Sales Tax Commission.
Even though these five states don't require sales tax collection (or have limited requirements), they represent a small fraction of your potential customer base. The other 45 states have sales tax, and that's where most of your compliance effort will be focused.
Understanding your nexus footprint across all 50 states is the foundation of effective sales tax compliance. Starting with nexus helps you know where you have obligations, what you need to collect and how to stay compliant as your business grows.
Understanding which states have no sales tax is useful background knowledge. But for most businesses selling across state lines, the real question isn't "where can I avoid sales tax?" It's "where do I actually have obligations right now?"
The five sales-tax-free states represent a small slice of the US market. The other 45 states have sales tax, and if you're selling into them, you likely have nexus in more places than you realize. Economic nexus thresholds are lower than most business owners expect. Getting it wrong doesn't just mean paying back taxes. You could face late fees, compounding interest and mandatory audits that drain your operational budget.
Here's what we see all the time: a business owner learns about no-tax states and starts wondering if there's a way to restructure things to reduce their burden. They spend time researching Delaware incorporation or considering a move to Oregon. Meanwhile, they've already crossed nexus thresholds in a dozen states and have growing liability they don't even know about.
The smarter move? Start with what you can actually control. Get clear on your current nexus footprint. Understand which states you're already obligated to collect in. Then make informed decisions about registration, voluntary disclosure agreements and ongoing compliance.
That is what we help businesses figure out every day. Our "What's Next" call is a conversation with a specialist who will assess your situation, answer your questions and give you a clear picture of where you stand.
The next time you see a headline promising tax-free bliss in Delaware or Oregon, ask yourself: are you optimizing for the state where you incorporated, or are you actually managing the states where your customers live?👉 Schedule your free What's Next consultation and find out exactly where your business stands today.
Five states have no statewide sales tax in 2026: Alaska, Delaware, Montana, New Hampshire, and Oregon. These are sometimes referred to as the NOMAD states — an acronym formed from their initials. Together they represent the only jurisdictions in the U.S. where residents and businesses are not subject to a statewide sales tax on most goods and services. However, each of these states has its own nuances — Alaska allows local municipalities to impose their own sales taxes, Delaware has a gross receipts tax, and each of the five states levies excise taxes on specific products like alcohol, tobacco, and gasoline. No sales tax at the state level does not mean no tax obligations at all.
NOMAD is an acronym used to remember the five U.S. states that have no statewide sales tax: New Hampshire, Oregon, Montana, Alaska, and Delaware. The acronym is widely used by tax professionals, accountants, and business advisors as a quick reference for the no-sales-tax states. It has gained broader recognition as remote work and business registration across state lines has made the question of state tax exposure more relevant to a wider range of businesses and individuals. While the acronym is a helpful memory device, it is worth noting that NOMAD does not mean these states are entirely tax-free — each has other tax mechanisms that replace or supplement the revenue that sales tax would otherwise generate.
Alaska has no statewide sales tax, but it is the only NOMAD state that allows local governments to impose their own sales taxes. More than 100 municipalities and boroughs in Alaska levy local sales taxes, with rates reaching as high as 7.5% in some areas. This means the sales tax experience in Alaska varies significantly depending on where you are — shopping in Anchorage is different from shopping in a small borough with a high local rate. For businesses selling into Alaska, this creates nexus and compliance considerations that do not exist in the other four no-sales-tax states, where there is no sales tax at any level of government.
You can make the purchase tax-free at the point of sale, but you may still owe tax in your home state. Most states with a sales tax also have a use tax — a complementary tax that applies when you purchase goods in another state without paying sales tax and then bring or use those goods in your home state. Use tax is owed at the same rate as your home state's sales tax, and it is your legal responsibility to self-report and pay it. While use tax enforcement is notoriously difficult and largely self-reported, states are increasingly cross-referencing data to identify large purchases made across state lines. For consumers making very large purchases, the savings may still be meaningful — but it is not a legal tax avoidance strategy.
States without a sales tax still generate revenue through other mechanisms. New Hampshire relies heavily on property taxes and has a tax on interest and dividend income. Oregon has one of the highest state income tax rates in the country, reaching 9.9% at the top bracket, and no sales tax whatsoever. Montana uses income and property taxes as its primary revenue sources. Delaware levies a gross receipts tax on businesses — a tax on total revenue rather than profit — as well as income and property taxes. Alaska is the most tax-light of the five, with no state income tax and no state sales tax, relying primarily on oil revenues and local taxes. In each case, the absence of a sales tax is offset by other tax structures, making a full comparison of tax burden more complex than simply looking at the sales tax rate.
For Delaware, Montana, New Hampshire, and Oregon — no. These states have no statewide sales tax and no local sales tax, so there is no sales tax to collect on shipments to customers in those states regardless of where the seller is located or how much they sell there. Alaska is the exception — because local municipalities in Alaska can impose their own sales taxes, online sellers may have collection obligations in specific Alaskan jurisdictions depending on the local rules and their sales volume in those areas. The Alaska Remote Seller Sales Tax Commission has established a simplified system for remote sellers to register and comply with Alaska local sales taxes, which is worth reviewing for businesses with meaningful sales into the state.
Registering in a no-sales-tax state does not eliminate your sales tax obligations in other states. Sales tax nexus is determined by where your business activities occur — where your employees work, where your inventory is stored, where you make sales — not where your business is legally registered. A company incorporated in Delaware but operating in California, Texas, and New York still owes sales tax in those states based on its physical presence and economic activity there. Delaware's popularity as a state of incorporation is driven by its business-friendly corporate law, not by any sales tax advantage that transfers to operations in other states. Businesses that choose a NOMAD state as their primary operating base may benefit from the absence of sales tax locally, but it does not reduce multi-state obligations.
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