What States Have No Sales Tax?

When making big-ticket item purchases or when planning a place to retire, you may want to consider making those decisions in a state that does not have a sales tax. As of June 2011, there are five states that don't levy sales taxes: Delaware, Montana, New Hampshire, Oregon and Alaska. Even if you don’t live in any of these states, you can take advantage of the no sales tax status by having purchases shipped to friends or relatives who live there or have them make the purchases for you.

Alaska

Because Alaska collects tax revenue from oil production, the state has not mandated a state sales tax. However, the state allows local jurisdictions to levy their own sales taxes. For example, the capital city of Juneau levies a 5 percent sales tax on all goods and services within its jurisdiction.

Delaware

Delaware levies a gross receipts tax on all businesses that sell goods or services. The gross receipts tax rate varies, depending on the type of business, but range between .1037 percent and 2.0736 percent. Although consumers are not charged a direct sales tax, businesses most often pass on the gross receipts tax onto the consumers through price increases.    

Montana

With fairly high excise taxes levied on tobacco and gasoline and other taxes levied on businesses, property and income, Montana does not mandate a state sales tax. However, some communities and resort areas in Montana have the option to levy a tax that is used to fund various services within resort areas. The maximum resort tax is 3 percent, with at least 5 percent of the tax revenue offset by property taxes.

New Hampshire

New Hampshire is unique in that it also is one of nine states that do not levy a state income tax. The state; however, levies significant taxes on property and businesses. So before you plan to retire “tax free” in New Hampshire, make sure you will be able to financially handle property taxes.

Oregon

Oregon relies on significant tax revenues levied against businesses, corporations and state income to allow it to forgo a mandated state sales tax for consumers.