States With No Sales Tax 2026
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States With No Sales Tax 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Five states do not impose a statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. This means residents make everyday purchases without adding a percentage to the price at the register, and businesses avoid the administrative burden of collecting and remitting sales tax. However, some of these states compensate with higher income taxes, property taxes, or other revenue mechanisms. This guide examines each no-sales-tax state in detail and helps you understand the trade-offs.
The 5 States With No Sales Tax (2026)
| State | State Sales Tax | Local Sales Tax | Income Tax | Avg. Property Tax Rate |
|---|---|---|---|---|
| Alaska | None | Up to ~7.50% (some localities) | None | ~1.04% |
| Delaware | None | None | ~2.20% — ~6.60% | ~0.53% |
| Montana | None | None (resort tax in some areas) | ~1.00% — ~6.75% | ~0.74% |
| New Hampshire | None | None | None | ~1.57% |
| Oregon | None | None | ~4.75% — ~9.90% | ~0.87% |
Detailed State Profiles
Alaska
Alaska has no statewide sales tax and no individual income tax, making it unique among all 50 states. However, Alaska allows local governments to impose their own sales taxes, and approximately ~100 municipalities do so at rates ranging from ~1.00% to ~7.50%. Juneau’s rate is approximately ~5.00%, and Kodiak charges ~7.00%.
Alaska funds its government primarily through oil production revenue and federal grants. The Alaska Permanent Fund distributes an annual dividend to every eligible resident, typically ranging from ~$1,300 to ~$3,200 per year. Property taxes average ~1.04%, which is near the national average.
Delaware
Delaware has no sales tax at any level — neither state nor local. This has made it a popular shopping destination for residents of neighboring states (particularly Pennsylvania, Maryland, and New Jersey). Delaware compensates with a graduated income tax reaching ~6.60% on income over ~$60,000 and a corporate income tax of ~8.70%. Property taxes are relatively low at ~0.53%.
Delaware also collects significant revenue through its corporate franchise tax, as more than half of all publicly traded U.S. companies are incorporated there. Additionally, Delaware imposes a gross receipts tax on businesses, which functions similarly to a sales tax but is paid by the business rather than the consumer.
Montana
Montana has no statewide sales tax but does allow a limited “resort tax” of up to ~3.00% in certain tourist-heavy communities such as Big Sky and West Yellowstone. The state has a graduated income tax with seven brackets ranging from ~1.00% to ~6.75%. Property taxes average ~0.74%, which is below the national average.
Montana generates additional revenue through natural resource severance taxes on coal, oil, and gas production, as well as gaming taxes. The state’s relatively small population and low cost of living make the overall tax burden moderate.
New Hampshire
New Hampshire has no sales tax and no individual income tax on wages. It previously taxed interest and dividend income at ~5.00% (the Hall-like interest and dividends tax), but that tax was fully repealed effective January 1, 2025. New Hampshire compensates primarily through property taxes, which average ~1.57% — among the highest in the nation. A ~$400,000 home in New Hampshire incurs approximately ~$6,280 in annual property taxes.
The state also generates revenue through business taxes: the Business Profits Tax (~7.50% of net income) and the Business Enterprise Tax (~0.55% of enterprise value). These taxes mean that while individuals pay no income or sales tax, business owners face a significant tax burden.
Oregon
Oregon has no sales tax but imposes some of the highest income tax rates in the nation, with a top rate of ~9.90% on income over ~$125,000 (single filers). Portland-area residents face additional local income taxes of up to ~2.50% through the Multnomah County Preschool for All tax and the Metro Supportive Housing Services tax. Property taxes average ~0.87%.
Oregon funds its government almost entirely through income taxes, which creates revenue volatility during economic downturns. Several ballot measures to institute a sales tax have been rejected by Oregon voters over the decades.
Comparison: No-Sales-Tax States vs. High-Sales-Tax States
| Metric | No-Sales-Tax State Avg. | Top 5 Highest Sales Tax States Avg. |
|---|---|---|
| Average combined sales tax | ~0.00% — ~2.00% (with local) | ~9.30% |
| Average income tax rate (top) | ~5.85% | ~3.80% |
| Average property tax rate | ~0.95% | ~0.90% |
| Overall tax burden | ~8.20% | ~8.90% |
No-sales-tax states tend to have higher income taxes but similar property tax rates, resulting in a slightly lower overall burden on average.
Impact on Consumers and Businesses
Consumer Benefits
- Everyday purchases cost less at the register
- No need to track taxable vs. nontaxable items
- Large purchases (vehicles, appliances, electronics) save hundreds to thousands in tax
- Cross-border shopping advantages for residents near state lines
Business Considerations
- No sales tax collection, remittance, or audit compliance
- Simplified pricing (listed price equals final price)
- Oregon and Delaware still impose other business taxes (gross receipts, corporate income)
- E-commerce businesses selling into sales-tax states still must collect and remit to those states
Tips for Leveraging No-Sales-Tax States
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Plan major purchases strategically. If you live near a no-sales-tax state, making large purchases there can yield meaningful savings.
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Understand use tax obligations. Many states require residents to pay “use tax” on out-of-state purchases brought into their home state, even if no sales tax was charged.
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Consider the total tax picture. Oregon’s lack of sales tax is offset by income tax rates up to ~9.90%. Evaluate all tax types together.
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Factor in local taxes. Alaska allows local sales taxes that can reach ~7.50%, and Montana’s resort tax applies in tourism areas.
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Evaluate business costs. Delaware’s gross receipts tax and New Hampshire’s business taxes can be significant. No sales tax does not mean no business tax.
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Monitor legislative proposals. Some no-sales-tax states periodically consider implementing sales taxes. Stay informed about ballot measures and legislative activity.
Key Takeaways
- Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.
- Alaska allows local sales taxes up to ~7.50%, and Montana permits a limited resort tax.
- Oregon compensates with income tax rates up to ~9.90%, while New Hampshire relies heavily on property taxes (~1.57% average).
- Delaware’s absence of both sales and local sales tax makes it unique for consumers and shoppers.
- No-sales-tax states generate revenue through income taxes, property taxes, natural resource taxes, or business-specific taxes.
- The overall tax burden in no-sales-tax states is slightly lower on average than in high-sales-tax states.
Next Steps
- Federal Income Tax Guide 2026 — Federal taxes apply regardless of state sales tax policy.
- State Income Tax Rates Comparison 2026 — See how income taxes compare across all states.
- Tax Bracket Calculator — Model your total tax burden with and without sales tax.
- Self-Employment Tax Guide — Business taxes in no-sales-tax states.
- Find a CPA Near You — Get advice on optimizing your state tax situation.