States With No Sales Tax: The 5 Tax-Free NOMAD States

In short: The five states with no sales tax at the state level are New Hampshire, Oregon, Montana, Alaska and Delaware, often called the NOMAD states. Only Alaska lets local governments charge a general sales tax. All five still raise money through other taxes, and online sellers based in them must still collect sales tax in other states once they pass economic nexus thresholds.

Updated October 2026: We added a section on how tax-free states differ from states with no income tax, using Tax Foundation 2026 data, plus Delaware's franchise tax and a check of every rate against official sources.

Searching for states with no sales tax usually means one of two things. You want to know where shoppers pay no tax at the till, or you run a business and want to know what you owe. This guide covers both. It explains which tax-free states exist, what other taxes replace the sales tax, and what they mean for online sellers. For every state's rate, see our full table of the highest and lowest sales tax rates by state.

Which states have no sales tax?

Five U.S. states have no statewide sales tax. The NOMAD acronym makes them easy to remember:

• New Hampshire
• Oregon
• Montana
• Alaska
• Delaware

There is no national sales tax in the USA. The other 45 states and Washington, D.C. all charge a general sales tax on retail sales of goods and some services. In its 2026 mid-year data, the Tax Foundation lists a 0% combined state and average local rate for Delaware, Montana, New Hampshire and Oregon. Alaska shows a 1.82% average local rate, because many Alaska cities and boroughs charge their own sales tax.

How do the NOMAD states compare?

None of the five charges a state sales tax, but each one taxes something else. The table below sums up the key differences as of October 2026.

How do taxes work in each NOMAD state?

Each state replaces the sales tax in its own way. Here is what businesses need to know in each one.

New Hampshire: no sales tax, but meals and rooms are taxed

• New Hampshire has no general sales tax at the state or local level.
• It charges an 8.5% Meals and Rooms (Rentals) Tax on restaurant meals, hotel stays and motor vehicle rentals. The rate fell from 9% on October 1, 2021.
• Businesses also pay the Business Profits Tax (BPT) and the Business Enterprise Tax (BET).

Oregon: no sales tax, but a tax on business activity

• Oregon has no state sales tax and no general local sales tax.
• Shoppers from nearby states often cross the border to buy big-ticket items tax-free.
• Businesses with more than $1 million of Oregon commercial activity pay the Corporate Activity Tax. It costs $250 plus 0.57% of taxable activity above $1 million. Businesses with $750,000 or more must register.

Montana: no sales tax, except in resort areas

• Montana has no state sales tax.
• Some resort communities charge a local resort tax of up to 3%. As of 2026, Big Sky, West Yellowstone, Red Lodge, Virginia City, Cooke City, St. Regis and Wolf Creek levy it at 3%.
• Resort taxes apply to lodging, restaurants, bars, ski resorts and luxury goods sold in the area.
• Hotel stays across the state also carry an 8% lodging tax.

Alaska: no state sales tax, but many local sales taxes

• Alaska has no state sales tax, but many cities and boroughs set their own rates. The Tax Foundation lists a maximum local rate of 7.85%.
• Each local taxing authority also sets its own rules on what is tax exempt, so taxability can differ from town to town.
• Much of the state's revenue comes from oil and other natural resources.

Delaware: no sales tax, but a gross receipts tax on sellers

• Delaware has no state or local sales tax. It once welcomed drivers with signs calling it the "Home of Tax-Free Shopping".
• Instead, the state charges a gross receipts tax on businesses. Rates range from 0.0945% to 1.9914%, depending on the activity. Most businesses get a monthly exclusion of at least $100,000.
• The seller pays the gross receipts tax, not the shopper. It is not added to the receipt like a sales tax.
• Since adult-use cannabis sales began on August 1, 2025, Delaware has charged a 15% retail marijuana tax (State of Delaware).
• Companies formed in Delaware also pay an annual franchise tax. Corporations file by March 1, and LLCs pay $400 a year by June 1 (Delaware Division of Corporations). This applies wherever the company does business.

Why do some states choose not to have a sales tax?

These states rely on other revenue, so they do not need a sales tax. Alaska draws heavily on oil and natural resources. New Hampshire leans on property taxes, business taxes and its meals and rooms tax. Oregon, Montana and Delaware rely more on income taxes and business taxes.

Having no sales tax can also attract shoppers from neighboring states. The Tax Foundation notes that retail sales in New Hampshire's border counties have grown sharply, as shoppers cross over from states that charge sales tax.

Are tax-free states the same as states with no income tax?

No. "Tax-free states" usually means no sales tax, which is a different list from states with no individual income tax. Only Alaska and New Hampshire appear on both lists.

According to the Tax Foundation's 2026 state income tax data, eight states levy no individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Washington taxes only capital gains income. New Hampshire repealed its interest and dividends tax as of 2025.

Corporate income tax rates are from the Tax Foundation's 2026 corporate tax data. It lists six states with no corporate income tax: Nevada, Ohio, South Dakota, Texas, Washington and Wyoming. Nevada, Ohio, Texas and Washington tax gross receipts instead.

South Dakota shows why the lists differ. It has no individual or corporate income tax, but it charges a 4.2% state sales tax, plus local taxes. In Delaware, Montana and Oregon, the opposite applies: no sales tax, but residents file state income tax returns.

Does no sales tax mean no tax at all?

No. A state without a sales tax still collects money in other ways. Common examples include:

• Excise taxes on fuel, tobacco, alcohol and, in Delaware, cannabis.
• Lodging and meals taxes, such as New Hampshire's 8.5% Meals and Rooms Tax and Montana's 8% lodging tax.
• Business taxes on revenue or profit, such as Oregon's CAT and Delaware's gross receipts tax.
• Property taxes, which are a major revenue source in New Hampshire.
• Income taxes in Oregon, Montana and Delaware.

So "tax-free states" is really shorthand. These states skip the sales tax, not tax in general. Shoppers there pay no sales tax on the sales price of most goods and services, so these states have no need for sales tax holidays, the short tax-free periods some other states offer.

What does no sales tax in the USA mean for online sellers?

Being based in a NOMAD state does not free you from sales tax elsewhere. Your duty to collect depends on where your customers are, not where your business is.

• Economic nexus applies to you. Each sales tax state sets its own economic nexus threshold. Once you pass it, you must register, collect and file there. See our economic nexus thresholds by state.
• Example: An Oregon company selling online to California must collect California tax once its California sales pass $500,000 in a year.
• Alaska is the big exception among the NOMAD states. Remote sellers must collect local sales tax in ARSSTC member areas once their total sales delivered into Alaska reach $100,000 in the current or previous calendar year. Since January 1, 2025, there is no longer a 200-transaction test.
• Marketplaces may collect for you. Sales made through a marketplace facilitator, such as Amazon, are often taxed by the platform. Check each state's rules before you register.
• Buying for resale? If you buy stock for resale in a sales tax state, you may need a resale certificate.

If you sell from outside the U.S., our guide to U.S. sales tax for foreign sellers explains the extra steps.

What are the pros and cons of the NOMAD states for businesses?

The main benefit is simpler in-state sales, but other taxes and out-of-state rules still apply.

Pros

• Less admin for local sales: In New Hampshire, Oregon, Montana and Delaware, you don't collect general sales tax on in-state sales.
• Competitive pricing: Local shoppers pay no sales tax at the till.
• Cross-border shoppers: Buyers from nearby states may travel to shop.

Cons

• Other taxes apply: Gross receipts, corporate activity, income and property taxes can be higher.
• Out-of-state duties remain: Online sellers must still collect sales tax wherever they have nexus.
• Alaska is complex: Local rates and rules vary from one community to the next.

How can you stay sales tax compliant?

Track where your customers are and check each state's rules. These steps help:

1. Map your sales by state and compare them with each state's nexus threshold.
2. Register in each state where you pass a threshold, before you start collecting.
3. Charge the correct combined state and local rate for each delivery address.
4. File returns on time, even when you have no sales to report, if the state requires it.
5. Keep records and exemption certificates in case of an audit.

LumaTax, Taxually's U.S. sales tax solution for enterprises and accounting firms, runs nexus analysis and handles registrations and multi-state filings. For state sales tax rates across the country, see our sales tax by state table.

Could the NOMAD states add a sales tax in the future?

It is possible, but there is no sign of a statewide sales tax in any NOMAD state as of October 2026. Montana has debated a sales tax in the past, but voters and lawmakers have long opposed it. The bigger changes are at the local level and in targeted taxes. Alaska communities now cooperate through the ARSSTC, and Delaware added a retail marijuana tax in 2025. Keep an eye on these changes, as they can affect what you collect and file.

Conclusion

The five states with no sales tax are New Hampshire, Oregon, Montana, Alaska and Delaware. They make in-state shopping cheaper, but they still tax businesses in other ways. Alaska also has local sales taxes that apply to remote sellers.

If you sell online, your obligations follow your customers. Know your nexus, register where you must and keep good records.

Do you need help with your sales tax compliance? Book a free call with one of our sales tax experts to find the right solution for your business.

Sources

• Tax Foundation: State and Local Sales Tax Rates, Midyear 2026
• Alaska Remote Seller Sales Tax Commission (ARSSTC): Remote Seller Sales Tax Code
• New Hampshire Department of Revenue Administration: Meals and Rooms Tax rate
• Oregon Department of Revenue: Corporate Activity Tax
• Montana Department of Revenue: Local Resort Tax
• Montana Department of Revenue: Lodging Facility Sales and Use Tax
• Delaware Division of Revenue: Gross Receipts Tax
• California Department of Tax and Fee Administration: Wayfair use tax collection requirements
• Tax Foundation: State Individual Income Tax Rates and Brackets, 2026
• Tax Foundation: State Corporate Income Tax Rates and Brackets, 2026
• Delaware Division of Corporations: Annual Report and Tax Information

How Taxually handles this

Taxually’s LumaTax runs a nexus analysis on your sales, helps you register in the states where you must collect, and prepares and files multi-state sales tax returns, including Canadian GST/HST. LumaTax is currently available to enterprises and accounting firms. For the full workflow, read how to automate US sales tax filing in every state.

Related guides

• A Beginner’s Guide to Economic Nexus
• Which Businesses Qualify for Sales Tax Exemptions?
• Contingent Liabilities and Wayfair: The Impact on SUT and Audit Teams