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States without Sales Tax 2024
Sales tax is a type of levy imposed by the government at the point of sale for goods or services. To simplify, when you make a purchase, the sales tax is added to the cost of your purchase. For example, if a state has a 5% sales tax and you purchase an item that costs ten dollars, you will pay $10.50 at the register.
The amount of sales tax varies from state to state. Some states – 38 as of November 2018 – also have local sales taxes. The highest average combined state and local tax rates are in Tennessee, Louisiana, Arkansas, and Washington, each of which has combined taxes of over 9%. At the state level, California has the highest tax rate at 7.25%. Four states fall only slightly behind with state sales tax rates of 7%. Those states are Tennessee, Indiana, Mississippi, and Rhode Island.
Forty-five states plus Washington, D.C., have statewide sales tax. The states that do not have state sales taxes are: Alaska, Delaware, Montana, New Hampshire, and Oregon. Even though Alaska does not have a state sales tax, localities can charge local sales taxes.
State | No Sales Tax | Additional Details |
|---|---|---|
| Alaska | No state sales tax | Still permits local sales tax |
| New Hampshire | No state sales tax | Still levies Meals and Rooms Tax on lodging, car rentals, and dining out |
| Oregon | No state sales tax | Levies a Vehicle Use Tax on buyers and Vehicle Privilege Tax on sellers of motor vehicles, as well as a flat $15 excise tax on bicycle sales |
| Delaware | No state sales tax | Levies Gross Receipts Tax on seller rather than sales tax on purchaser |
| Montana | No state sales tax | Excise taxes still exist on certain items (tobacco, alcohol, lodging, fuel). Also, municipalities may charge up to 3% local sales taxes, also referred to as "Resort" or "Local Option" taxes |