5 U.S. States Without a Statewide Sales Tax

Learn which states have a sales tax, and which states exempt certain items

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Almost every state in the country has a sales tax, with rates ranging from 7.5% in California to just 2.9% in Colorado. Most states also allow local counties, cities, and municipalities to add on their own separate sales taxes to the state rate. 

There are only five states that do not have a sales tax:

  • Alaska
  • Delaware
  • Montana
  • New Hampshire
  • Oregon

Although Alaska does not have a state sales tax, it does allow localities to impose sales taxes, which range from 1% to 7%.

Therefore, the average sales tax rate statewide in Alaska is around 1.75% -- not huge, but not zero, either.

Delaware does not have a sales tax, but does impose a gross receipts tax on businesses that can be as high as 2.07% of the total receipts from goods sold and services rendered in the state. This tax is generally not passed directly on to the consumer, although its effects can be seen in sales prices of goods and services.

States with Low Sales Taxes

Of states that do have a sales tax, Colorado's tax is the lowest, at 2.9%. However, there are 13 states with sales taxes set at 5% of the purchase price or less, including seven states where the tax is 4%.

These include:

  • Alabama (4%)
  • Colorado (2.9%)
  • Georgia (4%)
  • Hawaii (4%)
  • Louisiana (4%)
  • Missouri (4.225%)
  • New York (4%)
  • North Carolina (4.75%)
  • North Dakota (5%)
  • Oklahoma (4.5%)
  • South Dakota (4%)
  • Wisconsin (5%)
  • Wyoming (4%)

Exemptions from State Sales Taxes

Many of the states that have sales taxes — regardless of whether they're low or high — exempt food from those taxes.

Alabama, Hawaii, Idaho, Kansas, Mississippi, Oklahoma, and South Dakota do not exempt food items from their state sales taxes.

In addition, there are some states that charge a smaller sales tax on food items, including:

  • Arkansas (1.5% for food)
  • Illinois (1%)
  • Missouri (1.225%)
  • Tennessee (5%)
  • Utah (3%)
  • Virginia (2.5%)

    In a few states, including Georgia, Louisiana, North Carolina, and Tennessee, food is subject to local sales taxes, even if it's exempt from state sales taxes.

    All states except for Illinois exempt prescription drugs from state and local sales taxes. In Illinois, prescription drugs are subject to a 1% sales tax.

    A handful of states also exempt non-prescription drugs from sales taxes.
    These include:

    Clothing is exempt from state sales taxes in a few states, mainly in the Northeast. These include: Massachusetts, Minnesota, New Jersey, New York, Pennsylvania, and Rhode Island.

    Source: Federation of Tax Administrators