U.S. States with No Sales Tax (2025 Guide): How To Save on Business Expenses in NOMAD States

Ever notice how sales tax can sneak up on you at the checkout? In North America, sales tax is typically added at checkout, so you’re not 100% sure as to what you will actually pay. If you’re a company that regularly makes large purchases, pays suppliers, or manages inventory, this added tax can impact margins. Fortunately, a few U.S. states skip statewide sales tax altogether.

In this article, we’ll examine which states don’t have sales tax, what that means for businesses, and why some companies choose to relocate or operate in these states to take advantage of the benefits.

U.S. States with No Sales Tax: Where Businesses Keep More of Their Money

As of 2025, five U.S. states do not impose a statewide sales tax:

• Alaska
• Delaware
• Montana
• New Hampshire
• Oregon

These states, collectively known as the "NOMAD" states, provide residents and visitors with the benefit of not paying sales tax on most goods and services. However, it's important to note that some of these states allow local jurisdictions to impose their own sales taxes.

Alaska, for example, permits local municipalities to levy sales taxes, which can range from 1% to 7% in certain areas. Similarly, Montana allows local jurisdictions to impose sales taxes, particularly in resort or high-tourism areas. Delaware, New Hampshire, and Oregon do not have local sales taxes at all. These states provide a tax advantage for businesses, but it's essential to consider other factors, such as income taxes, property taxes, and the overall cost of operating a business, when evaluating the financial benefits of residing in or visiting these states.

States with No Online Sales Tax: How E-Commerce Businesses Benefit

If you operate an e-commerce business, states without a statewide sales tax can reduce costs. Alaska, Delaware, Montana, New Hampshire, and Oregon do not require businesses to collect state-level sales tax on local transactions.

However, companies must still consider gross receipts taxes and other obligations, particularly when selling across state lines. The 2018 Wayfair decision expanded tax collection responsibilities for remote sellers. Despite this, operating or sourcing from these states can save businesses significant amounts on large-volume transactions and improve cash flow.

States With No Vehicle Sales Tax

Purchasing a vehicle can be expensive, especially for businesses that need multiple work vans or cars to operate. States with no vehicle sales tax can provide substantial savings. Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge statewide sales taxes on vehicle purchases.¹

This can save businesses thousands of dollars, but some local jurisdictions may impose local sales taxes, such as in Alaska, where municipalities have rates up to 7%.¹ So before you get too excited, there are other factors you need to consider, such as property tax and excise taxes.³

Businesses that buy vehicles frequently or businesses purchasing fleets benefit the most. New residents or travelers may purchase strategically to maximize savings, but they may be subject to taxes in their home state or country. It is also very important to consider all taxes and fees involved. States with no vehicle sales tax eliminate one cost, but total ownership also includes registration fees, insurance, and maintenance.¹

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Understanding Local Sales Taxes, Statewide Sales Taxes, and Other Taxes

The absence of a statewide sales tax in Alaska, Delaware, Montana, New Hampshire, and Oregon provides financial advantages, but it’s important to understand the full tax landscape. Some of these states impose local sales taxes, which vary by municipality.¹ Businesses and residents must also account for gross receipts tax, excise taxes, and property tax.²

Operating a business in a state with no sales tax can feel like a financial win, but in some areas, income tax can eat into those savings, and companies still have to factor in things like licensing fees, industry-specific excise taxes, and other compliance costs.³ So relocating or operating in these states can cut everyday expenses, but it’s important to look at the bigger financial picture.

Not having statewide sales taxes can make accounting simpler and reduce administrative headaches, but businesses still need to pay attention to local sales taxes, gross receipts tax, property taxes, and other obligations.⁴ We recommend weighing all these factors together so you can maximize savings and even make decisions that support your business’s long-term efficiency and profitability.

Why Businesses Relocate to U.S. States with No Sales Tax

The appeal of operating in U.S. States with No Sales Tax is pretty straightforward: lower costs on goods and services is a huge win. Everyday expenses, such as office supplies or even equipment, can cost less because there’s no added percentage at purchase. These savings can be particularly meaningful for companies making large purchases, such as vehicles, machinery, or bulk inventory.¹

Relocating or establishing operations in these states can also be strategic. Some, like New Hampshire and Oregon, attract businesses looking to reduce tax-related overhead and simplify compliance, while also benefiting from customers or clients who prefer shopping in areas without statewide sales taxes.³

Businesses themselves gain from operating in no-sales-tax states, as reduced transactional costs can increase overall revenue, while also allowing for more competitive pricing and even boosting local economic activity.⁴ This makes it clear why these states are attractive not just to residents, but also to companies that want to expand long-term.

Final Thoughts

Operating in U.S. States with No Sales Tax can provide several advantages for businesses. Relief from statewide sales taxes helps businesses reduce costs, but companies must still account for local sales taxes, income tax, property tax, and excise taxes. Evaluating the overall financial environment is critical for effective planning and maintaining profitability.

For many businesses, the balance works out favorably, which makes states like Oregon, Delaware, and New Hampshire appealing for both day-to-day business operations and long-term stability. Reduced tax burdens can simplify paperwork and support better pricing for consumers as well. But with that being said, as a business owner, you must understand what “tax-free” truly means, so you can make the most of the opportunities these states provide.

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FAQs

Are there regulatory advantages for businesses in no-sales-tax states?

U.S. states with no sales tax can offer regulatory advantages for businesses. Fewer tax collection requirements reduce accounting complexity, decrease reporting errors, and minimize audit risk. Companies that operate both in-person and online can also make compliance much more efficient, especially when compared to states with complex multi-jurisdictional sales tax rules. On top of that, simplified sales tax obligations can allow businesses to focus more on growth, pricing strategy, and expansion planning.

How does operating in a no-sales-tax state impact pricing strategy?

Businesses located in states without a statewide sales tax can operate with much lower costs in their pricing strategies. Without adding sales tax at checkout, companies may offer more competitive prices to attract customers or clients, both locally and across state lines. If you’re an online seller, this can improve market positioning and increase order volume. However, pricing decisions should still account for other expenses, such as income tax, property tax, excise taxes, and shipping costs.

Sources:

1. The 5 U.S. States with No Sales Tax | SOVOS
2. What Are the States Without Sales Tax? | DHJJ
3. The NOMAD States: Which US States Have No Sales Tax? | Taxtually
4. States with No Sales Tax: What You Need to Know | Avalara
5. States with No Sales Tax | Smart Asset