This table is for reference only and is subject to change as states adjust their rules. Only five states don't impose a sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Accessed Jan. 22, 2020. As of 1/1/2021. "Rental Vehicle Tax (RVT)." State of Delaware. Clothing is exempt in the following states, all of which don’t have a general sales tax. But in general, the state does not impose sales taxes. With software, taxability generally depends on whether the software is canned or custom, downloaded or delivered on tangible personal property, or software as a service (SaaS). The sales tax process is complex because there are many localities (state and local) who have sales taxes, each has its own sales tax rate, and different ways of determining tax - origin-based or destination-based. The five U.S. states that don't have a sales tax (including a handy trick to help you remember them forever.) Each state has control over its own base sales tax. This can make a huge difference in how much you pay for retail items, since rates can range as high as 7.25% in California, according to research from Tax Foundation. Economic nexus legislation was introduced in all of them this year. Some have no taxes at all and some states charge very high tax rates. But, it also has a lower personal income per capita, at a little over $40,000 - or, 15th lowest, according to USA Today. So, are you ready to move to one of these five states so that you can avoid paying sales tax on the items that you buy every … "Alcoholic Beverages Tax." New York City Department of Finance. Some local jurisdictions do not impose a sales tax. Ouch. A sales tax of 9% exists on prepared meals in restaurants, short-term room rentals and car rentals. There is also a 7% tax on phone services and a $.75 per $100 tax on real estate sales. Excise taxes are imposed on sales of tobacco and electricity. In addition to base sales taxes, certain municipalities and counties impose additional surtaxes. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. The lucky residents of New Hampshire don't have to pay any sales tax. However, other kinds of sales tax, like excise and value-added tax, add on to the consumer's budget. States have a number of ways to raise revenue, and those states without state income taxes find different ways to pay for roads, schools and such. But when you peel back the layers, you’ll find that residents aren’t exactly living tax-free. For full details on sales tax rates nationwide, see the Tax Foundation's page. Montana Department of Revenue. These rates are not represented in this chart. Oregon, for example, has one of the higher income taxes in the country, coming in at around 9.9% - even taxing most retirement income (so, maybe think elsewhere if you're looking to retire). I live in a state (Montana) that has no sales tax. The following rules apply to New York since you asked: New York has a 4% state sales tax. Five states don’t have a general sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon (the NOMAD states). Some employees can constitute a nexus in a state if they work primarily out of that state - like Amazon Accessed Jan. 22, 2020. Here you can set which states need sales tax collected, and at which levels (state, county or local). As of 2017, 5 states (Alaska, Delaware, Montana, New Hampshire and Oregon) do not levy a statewide sales tax. Oregon Department of Revenue. Yet many of the most populous areas of the state, including Billings, Bozeman, and Missoula, don't have any sales taxes at all. Government of Exeter, New Hampshire. Tennessee, on average, has the highest sales tax at 9.44%. But, in five lucky states, residents are exempt from sales tax (for the most part). California has the highest base sales tax rate, 7.25%. Some states are more lax on their minimum sales tax requirements, and a handful don’t charge sales tax at all. A tax on remote sales is a hard sell in the Sunshine State, but it could resurface. Additionally, many states with low sales tax have higher income taxes. (AMZN) - Get Report for example. The states with the lowest combined state and local sales tax rates are Hawaii, Wyoming, Wisconsin, and Maine. State sales tax: 5%; State and local property taxes per capita: $1,621; Tennessee. You'll have to shop in states that either don't have a sale tax, have a very low tax rate, or shop during a sales tax holiday if you don't want to shell out a fair bit of extra money every time you approach a cash register. You won't find a state-regulated sales tax on clothing or other goods you purchase in Delaware, Montana, New Hampshire and Oregon. Accessed Jan. 22, 2020. Delaware Paul Brady Photography / Shutterstock.com. "Cigarette and Tobacco Tax FAQs." 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