In the United States, sales taxation is not governed by a uniform federal rate. Instead, the US Constitution leaves transaction-level sales taxes to individual state and local jurisdictions. For shoppers, remote workers, e-commerce founders, and corporate accountants, identifying which states with no sales tax exist is crucial for calculating accurate purchase costs and managing nexus compliance.
Today, there are five recognized states with no sales tax at the statewide statutory level, widely remembered by corporate tax professionals under the acronym NOMAD: New Hampshire, Oregon, Montana, Alaska, and Delaware. However, assuming that doing business or purchasing goods in these five states is entirely tax-free is a costly misconception.
In this comprehensive 2026 tax guide, we analyze the exact legal frameworks of all five NOMAD states, unpack hidden local option taxes, examine gross receipts taxes, and explain post-Wayfair e-commerce nexus rules.
Table of Contents
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Open US Sales Tax Calculator →The 5 NOMAD States: Fast Comparison Table
While none of these five states levy a general statewide retail sales tax, each state offsets revenue through distinct alternative tax structures, verified against official research from the Tax Foundation State Business Tax Climate Index:
Detailed In-Depth Analysis of Each Zero-Sales-Tax State
1. New Hampshire: The “Live Free or Die” Tax Model
New Hampshire is famous for having neither a general state sales tax nor an individual personal earned income tax. However, the state generates public revenue through other targeted tax mechanisms:
- Meals and Rooms Tax: An 8.5% tax is assessed on prepared restaurant meals, short-term hotel room rentals, and motor vehicle rentals.
- Real Estate Property Taxes: To compensate for the lack of sales and wage taxes, New Hampshire has the third-highest effective property tax rate in the nation.
- Business Profits Tax (BPT): Business enterprises pay a corporate tax rate of 7.5% on net operating income.
2. Oregon: The Corporate Activity Tax (CAT) Reality
Oregon voters have repeatedly rejected statewide retail sales tax ballot measures. Consumers in Portland or Eugene pay $0.00 in state or local sales tax at retail cash registers. However, businesses face the Corporate Activity Tax (CAT):
- Levied at $250 plus 0.57% on commercial gross receipts exceeding $1 million in Oregon.
- Because the CAT is assessed on business gross receipts rather than consumer transactions, many retailers subtly bake this overhead into higher baseline consumer prices.
- Oregon also relies on one of the steepest state income tax brackets in the US (reaching up to 9.9%). You can model take-home wage impacts with our Hourly to Annual Salary Calculator.
3. Montana: Zero State Tax with “Resort Community” Exceptions
Montana maintains no general sales tax. However, under Montana Code Annotated (Title 7, Chapter 6, Part 15), designated Resort Communities (such as Big Sky, Whitefish, Red Lodge, and West Yellowstone) are legally empowered to impose local resort sales taxes of up to 3% to 4% on lodging, sporting goods, restaurants, and luxury items to fund infrastructure impacted by tourism.
4. Alaska: The Hidden Local Sales Tax Trap
Alaska is the single greatest point of confusion among all states with no sales tax. While Alaska’s state government imposes a 0.00% state sales tax, it grants autonomous home-rule municipalities and boroughs the legal power to levy their own local sales taxes:
- Juneau: 5.0% local sales tax.
- Wasilla: 2.5% local sales tax.
- Homer: Up to 7.85% peak seasonal local sales tax.
- Anchorage: Imposes 0.00% general sales tax, but levies special taxes on car rentals and cannabis.
- Remote Online Sellers: Under the Alaska Remote Seller Sales Tax Commission (ARSSTC), online e-commerce merchants shipping goods to Alaska customers must collect local sales tax if the destination borough participates in the uniform code!
5. Delaware: Merchant Gross Receipts Tax
Delaware is world-renowned for its business-friendly legal environment, hosting more than 60% of Fortune 500 corporations. While Delaware consumers pay 0.00% sales tax, Delaware imposes a Gross Receipts Tax (GRT) on businesses ranging from 0.0945% to 0.7468% depending on industry category. Sellers cannot explicitly pass this tax as a separate line item to retail consumers, making Delaware a true retail sales-tax-free haven.
E-Commerce & Cross-Border Rules: South Dakota v. Wayfair
Prior to the historic 2018 US Supreme Court ruling in South Dakota v. Wayfair, Inc. (585 U.S. 2018), online retailers were only required to collect sales tax in states where they maintained physical offices or warehouses. The Wayfair decision established economic nexus:
Today, if an e-commerce business located in a NOMAD state (e.g., New Hampshire or Delaware) sells over $100,000 in gross merchandise or conducts 200+ transactions into destination states like California, New York, or Texas, that merchant is legally required to register, collect, and remit destination state sales tax. For a detailed breakdown of nexus rules, review our guide on How to Calculate US Sales Tax by State & Zip Code.
Similarly, Canadian merchants engaging in cross-border trade between US states and Canadian provinces must coordinate GST/HST rules with US state nexus requirements, as outlined in our Canada Sales Tax Calculator suite.
Frequently Asked Questions (FAQ)
What are the 5 states with no sales tax in the US?
The five states with no statewide sales tax are New Hampshire, Oregon, Montana, Alaska, and Delaware (remembered by the acronym NOMAD). Note that in Alaska, local cities and boroughs are permitted to levy their own local sales taxes.
Can you avoid sales tax by buying online from another state?
No. Under destination-based sales tax sourcing rules and the Supreme Court’s Wayfair precedent, sales tax is assessed based on where the package is delivered, not where the seller is located. If an item is shipped to an address in California or Texas, the destination state’s tax rate applies regardless of where the merchant operates.
Does Alaska have a sales tax?
The state government of Alaska imposes a 0.00% statewide sales tax. However, over 100 cities, boroughs, and municipalities throughout Alaska impose local sales taxes ranging between 2.0% and 7.85%.
Which state has the lowest combined state and local sales tax?
Excluding the NOMAD states (which have 0% state sales tax), the states with the lowest combined average sales tax rates are Hawaii (approx. 4.5%), Wyoming (approx. 5.36%), and Wisconsin (approx. 5.43%).
About the Author & Verification Methodology
Syed Abdullah Shah is the Head of Technical SEO and Web Optimization Systems at SBS Digitals. Specializing in cross-border e-commerce compliance, state-level tax API structures, and financial automation software, his verified guides help thousands of online business owners eliminate tax calculation errors. All tax rates presented are verified against official state statutory codes and 2026 Department of Revenue publications.