Taxes are something that we all need to pay in one way or another. While income and property taxes are based on where you live and how much you earn.
The sales tax is a bit different as it only implies on you where you make a purchase. So when you travel to another state, you are subjected to their sales tax.
5 States Without Sales Tax In U.S.
However, there are some U.S. states where there is no sales tax. And these states are listed below:
- New Hampshire
#1 – Alaska
At first, there is Alaska. This one is the most tax-friendly state you are going to find in the USA as there is no sales tax and no state income tax. Instead, the state only charges a slightly higher than average property tax rate of 1.18%.
However, the state also has several other ways to apply for property tax exemptions.
Many countries known as ‘boroughs’ throughout Alaska do charge sales tax. For instance, Juneau Borough charges a 5% sales tax on eligible purchases.
#2 – Delaware
Delaware is another state that does not charge sales tax to its residents or visitors. Even, there are no jurisdictions within Delaware that exercise any sales tax measures.
But the state does have a gross seller tax which only applies to businesses on the number of total sales from goods and services sold.
While the state does not have any sales tax, the state levy’s a moderate income tax. Also, it charges a low property tax, known as the corporate tax shelter.
#3 – Montana
Montana is one of the scantily populated states which does not have a state sales tax. But the local municipalities that attract tourists, such as Big Sky, have the right to implement local sales taxes.
Also, the property tax is a bit high at the end of the scale. Plus, income tax is near the average rate of all 50 states.
#4 – New Hampshire
Up next, there is New Hampshire. The state has also opted out of collected sales tax. The reason why the state doesn’t charge sales tax is that it has one of the highest property tax rates in the USA.
On the other hand, the Income-tax is extremely limited as it only applies to interest. So, for instance, you have to pay income tax when you earn interest from a high-yield savings account. Or you earn dividend income from stock purchases.
#5 – Oregon
Lastly, there is Oregon. This state also does not collect sales tax. However, there are some terms and conditions. For instance, if you purchase a new car outside of the state, then you have to pay sales tax in order to register the car.
Also, it has a very high-income tax burden along with a moderately high property tax rate. This is to fill in the gap of sales tax.
The bottom line
So these are some of the states in the USA which don’t have sales tax. But yes, there are other types of taxes that these states may have.