Which States Do Not Charge Sales Tax?

Five states do not assess a statewide general sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. It is more accurate to describe them this way than to say they have a “0% sales-tax rate.” The distinction matters because the absence of a statewide general sales tax does not necessarily eliminate local taxes, selective taxes, business taxes, or obligations arising from sales into other states.

Sales tax is not a federal tax. The federal government does not collect sales or use taxes; state and local governments administer them. Consequently, a business must evaluate its obligations by jurisdiction rather than assume one nationwide rule applies.

If your business sells in states that impose a general sales tax, review the appropriate state sales tax application information. The lack of a general sales tax in one state does not remove a seller’s possible registration and filing responsibilities elsewhere.

The Five States Without a Statewide General Sales Tax

Alaska, Delaware, Montana, New Hampshire, and Oregon do not assess statewide general sales taxes. That statement is limited to a broad state-level tax on general retail sales. It should not be interpreted as proof that every transaction in those states is free from every state or local tax.

For comparison, businesses operating in other jurisdictions can use the state sales and use tax overview to identify where more detailed rate and registration research may be necessary. Rates, taxability rules, and seller obligations should always be reviewed for the particular state and transaction.

Why “No Sales Tax” Can Be Misleading

The phrase “no sales tax” often compresses several different questions into one. A business needs to separate at least three issues:

• Statewide general sales tax: Does the state impose a broadly applicable state-level tax on retail sales?
• Local sales tax: Can a city, borough, or other local jurisdiction impose and administer its own tax?
• Other business or transaction taxes: Does the state impose a different type of charge on sellers, service providers, particular products, or particular activities?

Alaska illustrates the local-tax issue. Although Alaska does not levy a state sales tax, several municipalities levy local sales taxes. A seller subject to one of those local taxes must contact the applicable municipal government for its regulations and forms. There is no single state registration document identified for those municipal taxes. Local requirements therefore cannot be handled by looking for one statewide Alaska sales tax permit.

Delaware illustrates the difference between a retail sales tax and a tax imposed directly on a business. Delaware has neither state nor local general sales tax, so sales-tax exemption and reseller certificates are not applicable there. Instead, the Delaware Division of Revenue imposes license and gross-receipts taxes on most sellers and service providers. Those charges are imposed on the seller and may not be passed to the consumer.

Montana, New Hampshire, and Oregon are also properly identified as states without statewide general sales tax. That description should remain narrow. It does not, by itself, establish that every product, service, or business activity is outside every potentially relevant tax regime.

Who Needs to Pay Attention to These Differences?

The distinction affects both purchasers and businesses, but in different ways.

Retail customers

A customer buying ordinary goods may notice that a seller does not add statewide general sales tax to a transaction in one of the five states. However, the customer should not treat the state’s general-sales-tax status as a guarantee about every charge. In Alaska, for example, a municipal sales tax may still affect a transaction.

Businesses located in one of the five states

A business’s home-state status does not answer how another state will treat its sales. A seller based in Oregon, Delaware, or another state without statewide general sales tax may still need to examine its activities and sales in jurisdictions that do impose sales tax. Registration questions turn on the rules of the taxing jurisdiction, not simply the seller’s headquarters or formation state.

Physical operations, remote sales, inventory arrangements, and other business activities can affect a multi-state review. The sales tax nexus guide explains how to organize that analysis without assuming the same standard applies everywhere.

Businesses buying inventory for resale

A seller may need resale documentation when purchasing inventory from a vendor in another state, even if its home state lacks a statewide general sales tax. The document and acceptance rules are not automatically uniform across state lines.

Montana provides a specific example. A Montana business buying goods outside Montana for resale may give the out-of-state vendor a Montana Business Registry Resale Certificate. The certificate is not filed with the Montana Department of Revenue, and the vendor is not required to accept it. It is a resale document for that purchasing context, not a Montana sales-tax registration or an exemption certificate for purchases within a Montana general sales-tax system.

Businesses making purchases across jurisdictions should review whether a vendor will accept their documentation and whether another certificate is appropriate. See the discussion of whether one resale certificate can be used in multiple states for additional context.

How to Compare the Practical Options

There is no single compliance path for every business operating in or selling into these states. A practical review starts by identifying which of the following situations applies.

• Only statewide status matters: If the question is simply which states lack a statewide general sales tax, the answer is Alaska, Delaware, Montana, New Hampshire, and Oregon.
• The business operates in Alaska: Identify the municipalities connected to the business’s sales or activities. If a local tax applies, obtain the regulations and forms from the applicable municipal government rather than searching for one statewide registration.
• The business operates in Delaware: Do not look for a Delaware sales-tax exemption or reseller certificate. Evaluate the seller-side license and gross-receipts tax rules that may apply instead.
• The business sells into states with general sales tax: Review each destination jurisdiction separately for nexus, registration, taxability, collection, and filing considerations.
• The business buys goods for resale across state lines: Confirm which documentation the vendor accepts. A home-state document may have a limited purpose and is not necessarily accepted by an out-of-state seller.

This comparison prevents two opposite mistakes. The first is registering for a statewide general sales tax that the state does not impose. The second is assuming that the absence of that tax eliminates all local, business, or out-of-state responsibilities.

Practical Guidance and Ongoing Obligations

Businesses should maintain a jurisdiction-by-jurisdiction record rather than label all five states simply as “tax-free.” For each place where the business has sales or operations, record the type of tax being evaluated, the responsible government authority, any registration held, and the documents used for resale purchases.

For Alaska, municipal rules deserve separate attention. Because a seller subject to a local sales tax must work with the applicable municipality, registration forms and ongoing requirements should be tracked at that local level. Do not assume that information from one city or borough controls another.

For Delaware, separate customer-facing sales tax from seller-side business taxes in accounting records and customer communications. Delaware’s license and gross-receipts taxes are imposed on the seller and may not be passed to the consumer, so they should not be presented as ordinary retail sales tax.

For multi-state sellers, periodically review where the business sells and operates. State requirements are administered separately, and a business’s obligations can differ by jurisdiction. When a registration is required in another state, track that state’s assigned filing schedule, return requirements, and account notices rather than relying on practices from a no-statewide-sales-tax jurisdiction.

Finally, keep resale documents organized by vendor and purchasing state. A certificate may serve a specific purpose without functioning as a general permit. Montana’s resale certificate for goods purchased outside Montana is a clear example: it is not filed with Montana’s revenue department, does not create a Montana general sales-tax registration, and need not be accepted by the vendor.

The central answer is straightforward, but compliance requires precision: Alaska, Delaware, Montana, New Hampshire, and Oregon do not impose statewide general sales tax. The next question should always be whether a local tax, another type of business tax, an out-of-state sales-tax obligation, or a specific resale-document rule applies to the transaction.