States Without Sales Tax: The Five NOMAD States and the Catches

Five states have no statewide sales tax in 2026: New Hampshire, Oregon, Montana, Alaska, and Delaware. People remember the group by the acronym NOMAD, built from the first letter of each. That short list has held steady for years, and there’s no serious sign of it growing or shrinking in the near term, though Alaska keeps floating the idea of a statewide rate. For now, those are the five states without sales tax, and everywhere else charges something at the register. The other 45 states plus the District of Columbia all run a general sales tax of some kind, with combined state-and-local rates that can climb past 9% or even 10% in parts of Louisiana, Tennessee, and Arkansas.

The reason the list is so short comes down to revenue. Sales tax is one of the three big levers a state pulls to fund itself, alongside income tax and property tax. Most states pull all three to spread the load. The five states without sales tax simply lean harder on the other two levers. Oregon leans on income tax, with a top rate of 9.9% confirmed in the 2026 state income tax tables. New Hampshire leans on property tax and a narrow meals-and-rooms levy. Delaware leans on business gross receipts and incorporation fees. So while the sales-tax line on your receipt reads zero, the money is still being collected, just through a different door. There is no such thing as a state that funds itself on nothing.

It’s worth being precise about what “no sales tax” covers. In Delaware, Montana, New Hampshire, and Oregon, it means no sales tax at the state level and none at the local level either. You can shop in any town in those four states and the shelf price is the final price for general merchandise. Alaska is different and deserves its own caveat, which trips up a lot of people who assume all five states behave the same way. Alaska has no statewide rate, but local boroughs and cities run their own sales taxes, so the answer in Alaska is “it depends on the town.” That single exception is why careful writers say “no statewide sales tax” rather than the looser “no sales tax.”

Even in the four clean states, a handful of narrow taxes apply to specific transactions. New Hampshire’s 8.5% Meals and Rooms (Rentals) Tax, detailed by the New Hampshire Department of Revenue, hits restaurant meals, prepared food, hotel rooms, and car rentals. That isn’t a general sales tax, but to a tourist buying dinner it feels like one. Montana’s resort communities charge a local resort tax on lodging and some goods. So the honest version of the answer is that five states have no general sales tax, but every one of them taxes something, somewhere. Treating any of them as a true zero-tax zone misreads the system.

Here’s a quick worked example to show why the distinction matters. Imagine two shoppers, each buying $2,000 of furniture. In Delaware, both pay exactly $2,000, no tax line at all. In New Hampshire, the same furniture purchase is also tax-free, because furniture isn’t a meal or a room. But if those same two shoppers grab a $100 dinner in New Hampshire afterward, they each pay $8.50 in meals tax on top. The general goods escaped tax, the restaurant meal did not. That’s the texture you lose if you just memorize “five states without sales tax” and stop there. Now run the same $2,000 furniture purchase in California, where an 8% rate would add $160. Across a year of normal spending, the savings in a no-sales-tax state are real for someone who shops a lot.

A common mistake is assuming a no-sales-tax state is automatically a low-tax state. It is not. Oregon residents who earn good incomes often pay more in total state tax than residents of states that do charge sales tax, because the 9.9% income rate dwarfs what a few percent of sales tax would have cost them. The label describes one tax, not the whole bill. If total burden is what you care about, you have to look at income and property too. For the income side, our guide on states with no state income tax covers a different and only partly overlapping set of states. Very few states skip both sales and income tax, and those few make it up through property tax or resource revenue.

There’s also a timing angle people miss. The list of five states without sales tax is a snapshot, not a permanent fixture. States change their tax structures through legislation, and a budget shortfall can put any tax on the table. Alaska is the most watched case, because swings in oil revenue periodically push lawmakers to consider a statewide sales tax, which would knock it off the list entirely. New Hampshire occasionally debates broadening its tax base too. So while the five-state list is correct for 2026, treat it as current information rather than a fixed truth.

Looking ahead, the five states without sales tax are unlikely to change in the immediate term, but the pressure is real. If you’re making a long-term decision based on a state’s tax structure, treat the current list as accurate for 2026 but check the relevant department of revenue before you commit, because a structure that holds today can be reworked by a single budget cycle. And if your interest is in minimizing what you actually pay rather than chasing a label, map sales, income, and property tax together against your own spending and earning patterns instead of fixating on the one tax a state happens to skip.

One last practical note for residents of high-tax places like New York City. The five states without sales tax can look tempting on paper, but a relocation decision should never hinge on the sales tax alone, because your income tax, your property tax, your cost of living, and your actual spending patterns all move the needle far more than a few percentage points at the register. We see clients run the sales-tax math, get excited, and forget that Oregon would tax their salary at up to 9.9% or that New Hampshire would hand them a steep property bill. Treat the NOMAD list as one input among several, confirm the current rates with the relevant state department of revenue, and build the full picture before you let a single tax drive a life decision.

Alaska has no statewide sales tax, but you absolutely can still pay sales tax in Alaskan cities. This is the single most misunderstood point on the whole topic. When people list the five states without sales tax and include Alaska, they’re technically right about the state level and frequently wrong about what a real shopper experiences on the ground. More than 100 local jurisdictions in Alaska, boroughs and municipalities, levy their own sales taxes, with rates running as high as 7.5% in some places. That’s a wide spread, and it means the honest answer to “does Alaska have sales tax” is “the state doesn’t, but your town might.”

The way Alaska’s system works is the reverse of most states. In a typical state, the state sets a base sales tax rate and localities add a bit on top. In Alaska, there’s no state base at all, so each city or borough decides entirely on its own whether to charge sales tax and at what rate. Anchorage, the largest city, charges no general sales tax. But plenty of smaller communities do, including towns like Wrangell, Kodiak, Nome, Juneau, and many others. So whether you pay depends entirely on which Alaskan city you’re standing in. Two towns a short drive apart can have completely different answers.

This local patchwork got more organized for online shopping in recent years. Alaska municipalities banded together to form the Alaska Remote Sellers Sales Tax Commission, an intergovernmental cooperative established in 2019. The ARSSTC lets out-of-state online sellers register once and collect the correct local tax for every participating Alaska community through a single consolidated return. Remote sellers crossing $100,000 in annual Alaska sales are required to register. The practical result for a buyer: order something online, ship it to a participating Alaska town, and you may see local sales tax added at checkout, calculated from the destination ZIP code, even though “Alaska has no sales tax.” It’s a clean illustration of how the state-level label and the on-the-ground reality drift apart.

So the accurate statement is layered. Alaska has no state sales tax. Many Alaska localities do have sales tax. And for online purchases shipped into participating jurisdictions, that local tax now gets collected at checkout the same way it would in any other state. The five states without sales tax list includes Alaska because of the state-level fact, but Alaska is the one entry where the local reality diverges most sharply from the label. If you only remember one caveat about the NOMAD list, make it this one.

Here’s a worked example. Suppose you buy a $1,500 laptop. In Anchorage, which has no general sales tax, you pay $1,500 flat. Drive or ship that same purchase to a community charging a 5% local rate, and you’d pay $1,575, an extra $75 of local sales tax in a state famous for having none. Order it online to that same 5% town from a large remote seller registered with the ARSSTC, and the $75 shows up at checkout automatically. Three versions of the same purchase, two of them taxed, all inside one of the five states without sales tax. The variable that decides your bill is not the state, it’s the exact municipality where the goods land.

The common mistake is treating Alaska like Oregon or Delaware, where the no-sales-tax claim holds top to bottom. It doesn’t. A visitor who assumes every Alaska purchase is tax-free can be genuinely surprised at a register in a tax-collecting town. Worse, a business selling into Alaska can rack up an unexpected registration and collection obligation by crossing that $100,000 threshold without realizing Alaska’s “no sales tax” reputation never applied to local jurisdictions. If you run a business with Alaska customers, this is exactly the kind of nexus question worth raising with a CPA. Our state tax questions guide touches on multi-state collection issues like this one, and getting it wrong can mean back taxes plus penalties.

There’s a planning nuance for residents too. Because Alaska’s local taxes are set town by town, the choice of where to live inside the state can change your sales-tax exposure meaningfully. A family in a no-sales-tax borough pays nothing at the register, while neighbors one jurisdiction over pay several percent on everyday purchases. Stack that on top of the Permanent Fund Dividend, which pays residents a share of oil revenue, and Alaska’s overall tax picture for individuals gets genuinely unusual compared to the lower 48. It’s not a place where simple labels do the situation justice.

Going forward, watch Alaska closely. The state debates adopting a statewide sales tax in most legislative sessions, driven by swings in oil revenue. If that ever passes, Alaska would drop off the five states without sales tax entirely, and the local taxes would likely stack on top of a new state rate. For now, the correct mental model is: no state tax, real local taxes in many towns, and online purchases increasingly caught at checkout. Treat any Alaska purchase as potentially taxable until you know the specific jurisdiction, and if you’re a business, confirm your ARSSTC obligations before you assume the no-sales-tax reputation protects you.

If you are running a business that ships goods or sells services into Alaska, the takeaway is to stop thinking of it as a no-sales-tax state and start treating it like any other state with collection obligations, because for remote sellers crossing the threshold it effectively is one. Track your Alaska sales, register with the ARSSTC if you cross $100,000, and let your bookkeeping capture the destination jurisdiction on every order so you collect the right local rate. Getting this wrong is the kind of quiet liability that compounds. A few years of uncollected local sales tax across dozens of Alaska municipalities can turn into a five-figure assessment with penalties, and the fact that Alaska has no statewide rate gives you no defense at all once you have crossed into the remote-seller rules. The simplest discipline is to capture the destination city on every Alaska order from day one, so that if your volume ever crosses the threshold you already have the data you need to file accurately rather than scrambling to reconstruct it after the fact.

No. Buying a car in one of the five states without sales tax does not let you avoid tax if you live somewhere that charges it. Cars are taxed where you register them, not where you buy them. This catches people constantly, because the no-sales-tax shopping trip feels like a loophole and isn’t. The moment you register that vehicle in your home state, your home state’s sales or use tax applies based on your local rate, and the out-of-state purchase is irrelevant to the calculation. The dealer’s location does not change what your state collects.

New York is a clear example of how this works. According to the New York DMV, when you register a vehicle in New York, the state charges sales tax based on the rate for the locality where you, the buyer, live. Buy a car in Delaware, one of the states without sales tax, and drive it to Brooklyn, and New York City’s combined rate of 8.875% applies at registration. The Delaware purchase saved you nothing on the tax itself. You may even get hit with a fair-market-value assessment if the DMV thinks your reported purchase price is too low, which is a guard against people writing fake low numbers on the paperwork to shrink the tax.

The mechanism at work is use tax. Use tax is the twin of sales tax. When you buy something tax-free and bring it into a state that would have charged sales tax, that state imposes use tax to make up the difference, so people can’t simply shop across the border to dodge the rate. New York explains this on its use tax for individuals bulletin. Cars are the purchase where use tax is hardest to escape, because registration creates an official record. You can’t drive a car legally without registering it, and registration is the trigger that applies the tax. There’s no quiet way around a process that requires the state’s stamp.

If you did pay sales tax to another state on the purchase, you usually get a credit for it against your home-state liability, so you’re not double-taxed. But the states without sales tax charge nothing, so there’s no credit to claim, and your home state collects its full rate. Buying in a no-sales-tax state and registering in a tax state is the worst of both worlds for the savings-seeker, because you pay your home rate in full with no offsetting credit. Compare that to buying in a 6% state and registering in an 8% state, where you’d at least get credit for the 6% already paid and owe only the 2% difference.

Here’s a worked example with real numbers. You buy a $50,000 SUV in Delaware, a state without sales tax, planning to register it in New York City. Delaware charges no sales tax, so the purchase itself is clean. But when you register in NYC, the 8.875% combined rate applies as use tax, which is about $4,438. You owe that to New York regardless of where you bought the vehicle. Now flip it: a New Hampshire resident buys the same $50,000 SUV in Delaware and registers it in New Hampshire, which charges no sales or use tax on the vehicle. That buyer genuinely pays $0. Same car, same Delaware dealer, $4,438 difference, driven entirely by where each person registers.

The common mistake is the cross-border car-buying scheme. Someone in a high-tax state hears that a neighbor saved money buying in a no-sales-tax state and assumes they can too. They drive home, register the car, and get the use tax bill anyway, having wasted a day and a tank of gas. The scheme only works if you actually become a resident of the no-tax state and register there, which involves far more than a shopping trip and carries its own legal and tax consequences. Trying to register a car in a state where you don’t really live, sometimes by using a relative’s address or setting up a shell entity, is a good way to invite an audit and potential fraud exposure. States have gotten aggressive about chasing these arrangements, especially for expensive vehicles.

If you’re weighing a genuine residency move, that’s a real planning conversation worth having with our tax strategy team rather than something to improvise around a single purchase. A true change of domicile affects far more than one car, including income tax, voter registration, driver’s license, and where you spend your days, and the savings on a vehicle are rarely the reason to do it. People who try to fake a domicile to save a few thousand on a car often end up paying far more once the state catches the discrepancy.

The same logic extends to boats, RVs, trailers, and aircraft, anything that gets titled or registered. The tax follows the registration. Some states even tax vessels and aircraft based on where they’re primarily moored or hangared, not just where they’re titled, which adds another layer for high-value purchases. So before anyone plans a big titled-property purchase around the states without sales tax, the question to answer first is where the item will be registered and used, because that combination decides the tax bill far more than where the sale happens.

For anyone genuinely shopping for a big-ticket vehicle, the cleaner play is to focus on price and financing rather than chasing a sales-tax dodge across state lines, because the registration rule almost always erases the supposed savings. Negotiate the out-the-door number, confirm what your home locality will charge at registration, and budget for that use tax up front so it is not a surprise at the DMV counter. If you truly are relocating to one of the states without sales tax for reasons that have nothing to do with one car, then yes, the vehicle becomes part of the broader tax picture of that move. But buying the car first and inventing a reason to register it out of state afterward is the path that gets people audited, and the math rarely justifies the risk.

They’re two completely different things, and mixing them up leads to bad decisions. A state without sales tax charges nothing when you spend. A state with no income tax charges nothing when you earn. Those are separate taxes funding the same government, and a state can run any combination. The five states without sales tax are New Hampshire, Oregon, Montana, Alaska, and Delaware. The states with no broad income tax are a different and only partly overlapping group, including Texas, Florida, Tennessee, Nevada, Washington, Wyoming, South Dakota, and a couple of others. Notice that most states appear on one list or the other, not both.

The reason this matters is that the two taxes hit different people differently. Sales tax is regressive in the sense that it falls on consumption, so people who spend most of what they make feel it more. Income tax falls on earnings, so high earners feel it more. A state without sales tax is friendliest to someone who spends a lot relative to their income, like a retiree drawing down savings. A state with no income tax is friendliest to a high earner who can control how much they spend. Picking a state for its tax structure means knowing which of those two profiles you fit, because the wrong label can cost you thousands.

Only a small number of states skip both. New Hampshire and Alaska are the standout cases, charging no general sales tax and no broad wage income tax. That’s why they get romanticized as the ultimate tax havens. But even they collect plenty through other channels. New Hampshire runs some of the highest property taxes in the country, which the Tax Foundation tracks alongside income rates. Alaska’s local jurisdictions charge their own sales taxes, as covered earlier, and the state relies heavily on oil and resource revenue. The “no income, no sales” states found another lever, and for both of them, property and resource money carry the load.

Among the five states without sales tax, the income-tax treatment varies wildly. Oregon has no sales tax but one of the highest income tax rates in the nation at 9.9%. Montana has no statewide sales tax and a moderate income tax. Delaware has no sales tax and a graduated income tax topping out in the mid-6% range. So three of the five states without sales tax make up the lost revenue substantially through income tax. Only New Hampshire and Alaska genuinely skip both, and they do it by taxing property and, in Alaska’s case, by relying on resource revenue and local sales taxes. The point is that “no sales tax” tells you almost nothing about the income side.

Here’s a worked example showing why the distinction changes the math. Take someone earning $200,000 a year who spends $80,000. In Oregon, a state without sales tax, they pay no sales tax on that $80,000 of spending, saving maybe $6,000 versus an 8% sales-tax state. But Oregon’s income tax on $200,000 could run well over $15,000. Now take that same person to Texas, a no-income-tax state with about 8.25% sales tax. They pay roughly $6,600 in sales tax on their spending but zero state income tax. For this high earner, the no-income-tax state wins by a wide margin, even though it does charge sales tax. The label “tax-free” would have pointed them the wrong way if they only looked at sales tax.

Now flip the profile. Take a retiree spending $60,000 a year out of savings with very little taxable income. In a no-income-tax state, the lack of income tax barely helps, because they have little income to tax. But the 8% sales tax on $60,000 of spending costs them about $4,800 a year. Move that same retiree to Oregon, a state without sales tax, and that $4,800 disappears, while Oregon’s income tax touches almost none of their drawn-down savings. For this profile, the no-sales-tax state is the clear winner. Same two states, opposite conclusions, driven entirely by whether the person earns a lot or spends a lot.

The common mistake is treating “no sales tax” and “no income tax” as interchangeable shorthand for “low tax.” They’re not. They benefit opposite profiles, and several no-sales-tax states are genuinely high-tax states overall because of their income rates. Before anyone uses a tax structure to justify a move, they should map all three taxes, sales, income, and property, against their actual financial life. Our companion guide on states with no state income tax walks through that other half, and the lowest property tax guide covers the third leg. No single list answers the whole question.

Going forward, treat the two lists as answers to two different questions. If your concern is what you pay when you spend, the five states without sales tax are your list. If your concern is what you pay when you earn, that’s a separate set of states. And if you’re trying to minimize total burden, neither list alone gets you there, because the real answer depends on your income, your spending, your property, and how a given state balances all three. The cleanest way to decide is to run your own numbers across the candidate states rather than trust a one-word reputation.

The cleanest way to think about all of this is to stop asking which state is tax-free and start asking which tax matters most to you, because that question has a real answer for your situation even though the label does not. Pull your last tax return, look at how much went to state income tax versus how much you spent on taxable goods, and weigh that against typical property tax for the kind of home you would buy. Run those three numbers for each state you are considering. The state that wins on total burden is frequently not the one with the catchiest no-sales-tax or no-income-tax headline, and a CPA who does this comparison for clients regularly can usually spot the right answer faster than a search engine can. The headline number on a listicle is a starting point for the conversation, never the end of it, and the gap between the two can easily run into thousands of dollars a year for a household with meaningful income and spending.

Where the seller is located barely matters for online sales tax. What matters is where the item ships. So ordering from a retailer based in one of the states without sales tax, like a company headquartered in Delaware or Oregon, does not make your purchase tax-free if you live in a state that charges sales tax. The tax is determined by the destination, your shipping address, not by the seller’s home state. This is the single biggest misunderstanding about online sales tax and the states without sales tax, and it costs people who think they’ve found a loophole.

This destination-based rule became near-universal after the Supreme Court’s 2018 South Dakota v. Wayfair decision, which let states require out-of-state sellers to collect sales tax once they cross certain thresholds of sales into the state. Every state that has sales tax now has economic nexus rules, so a seller in Oregon shipping to a customer in New York has to collect New York sales tax, even though Oregon itself is one of the states without sales tax. The seller’s tax-free home state is irrelevant to the New York buyer. New York’s own rules on this appear in its use tax guidance, which covers what happens when sales tax wasn’t collected at checkout. Before Wayfair, a seller had to have a physical presence in a state to be forced to collect, which is why the old days of tax-free online shopping ended.

The flip side is what happens when you ship into one of the states without sales tax. Order something online and ship it to Delaware, Montana, New Hampshire, or Oregon, and there’s generally no sales tax to collect, because the destination has none. Ship it to Alaska, and it depends on the town, because of Alaska’s local sales taxes. The Alaska Remote Sellers Sales Tax Commission, the ARSSTC, coordinates collection of those local taxes from large online sellers, so a delivery to a participating Alaska community can carry local sales tax at checkout even though the state has none. That’s the one state where shipping to a no-state-sales-tax destination still produces a tax line, which surprises people who lump all five NOMAD states together.

If you live in a sales-tax state and order from a small out-of-state seller that doesn’t meet the economic nexus threshold, the seller might not collect tax. That doesn’t mean you owe nothing. You technically owe use tax to your home state on the untaxed purchase, and many state income tax returns include a line for self-reporting it. Most individuals ignore that line, but the obligation is real, and large purchases are where states pay attention. Buying from a seller in one of the states without sales tax doesn’t erase the use tax obligation, it just shifts the reporting burden from the seller to you. States increasingly cross-check large untaxed purchases, so the casual assumption that nobody tracks it is getting riskier.

Here’s a worked example. You live in Manhattan and order a $3,000 sofa online. If the retailer is a large company with New York nexus, it collects roughly $266 in New York sales tax at checkout (8.875%), regardless of whether the company is based in Oregon, Delaware, or anywhere else. If instead you order from a tiny Oregon workshop below the nexus threshold that doesn’t collect, you pay $3,000 with no tax line, but you technically owe that same $266 as use tax on your New York return. Now reverse it: you live in Portland, Oregon, a state without sales tax, and order the same sofa from a New York retailer. You pay $3,000 flat, no tax, because Oregon, your destination, has no sales tax for the seller to collect. Destination decides everything.

The common mistake is thinking you can shop from out-of-state online retailers to dodge your home-state sales tax. After Wayfair, that strategy mostly died for purchases from any sizable seller, because they’re required to collect based on your address. The only purchases that slip through are from small sellers below the nexus threshold, and even those leave you with a use tax obligation you’re supposed to report. Buying from a company in a no-sales-tax state changes nothing about what you owe at home. The era of treating the internet as a tax-free shopping mall is over for anything bought from a real retailer.

For businesses, the picture is more involved, because if you’re the seller, you may have to register and collect in dozens of states once you cross their thresholds, and Alaska’s local-jurisdiction system adds its own wrinkle through the ARSSTC. Thresholds vary by state, often set at $100,000 in sales or 200 transactions, and the moment you cross one you take on a filing and remittance duty in that state. That’s a compliance question worth getting right early, because back taxes and penalties for uncollected sales tax add up fast and can surface years later in an audit. If you sell across state lines, our business management service helps sort out where you have nexus and what you need to collect.

Looking ahead, expect destination-based collection to stay the norm, so plan around where your customers are, not where you or your suppliers happen to sit. The states without sales tax remain genuinely tax-free destinations for shipped goods, with Alaska’s local exception, but they offer no online-shopping advantage to buyers who live elsewhere. For sellers, the takeaway is to track your sales by state and watch the thresholds, because the obligation to collect can switch on quietly the moment your volume into a given state crosses the line.

For the everyday shopper, the bottom line is simple even if the rules are not. You cannot reliably escape your home-state sales tax by ordering from a retailer in one of the states without sales tax, because any sizable seller collects based on where the package goes, and the small sellers who do not collect still leave you owing use tax. The places where the no-sales-tax states genuinely help are when you live there, shop there, and take delivery there. Everywhere else, the destination rule quietly follows you home. If you are a seller rather than a buyer, treat multi-state collection as a standing compliance obligation rather than an afterthought, and revisit your nexus footprint every year as your sales grow into new states.