The 15 States With the Lowest Sales Tax (5 Have None at All)

Discover the tax havens within the U.S. where shopping comes with minimal sting.

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Updated June 6, 2024
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Sales taxes hit everyone nearly every day when they shop, regardless of their income.

Rates vary nationwide, but the average taxpayer is paying $1,131 a year in state and local sales taxes. Quite a hefty bill to foot, especially for consumers trying to get ahead financially.

But you can save big if you’ve got the right ZIP code. Here are the 15 states with the lowest sales tax, including five with none at all.

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Delaware

K.A/Adobe luxury waterfront homes

Delaware claims the title as the First State for being the first to ratify the Constitution in December 1787. Then, residents earned an average annual salary of roughly $21 in today’s dollars and had a tax rate of 1.15%.

Average wages have risen since that time, but tax rates have dropped. Delaware is one of only five states with no sales tax. Additionally, it doesn’t charge local taxes either.

And it’s got affordable housing too. The average home price in Delaware is $331,300, over $80,000 cheaper than the national median home price of $413,504, according to Redfin.

Montana

edb3_16/Adobe glacier lake with american rocky mountain

As the nation’s fourth-largest state, Montana is known for its vast size, natural beauty, and no taxes. Montana has zero state and local taxes, a nice perk for the few hundred thousand ski tourists visiting Big Sky each year.

New Hampshire

SeanPavonePhoto/Adobe portsmouth new hampshire at sunset

Full of New England charm and breathtaking views, New Hampshire is known as the Switzerland of America. 

And when you pick up a pair of Timberland boots (yes, it’s a New Hampshire company) to go for a hike, you can save a bundle, too. Like Delaware and Montana, New Hampshire charges no local or state taxes.

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Oregon

SeanPavonePhoto/Adobe portland oregon usa downtown

Oregon’s another great state to save big on stylish, athletic shoes. Oregon is home to Nike, Columbia Sportswear, and the U.S. headquarters for Adidas.

All the money you save from no state or local taxes is a great way to fund your fix at Blue Star Donuts and Powell’s Books.

Alaska

Rocky Grimes/Adobe Anchorage Skyline

While television shows “Northern Exposure” or “Deadliest Catch” might not be enough to lure you to Alaska, maybe their tax-free shopping is.

Alaska is our fifth and final state with no sales tax. Local municipalities can impose sales taxes, but that rate averages just 1.813% statewide. And it’s also one of nine states that don’t charge any state income tax.

Hawaii

okimo/Adobe Waikiki Beach and Diamond Head Crater

The Aloha State has the reputation of being a pricey paradise, but its state sales tax is downright budget-friendly.

The state sales tax is only 4.00%, the second lowest in the nation. Localities can impose additional taxes, but they’re pretty modest. Statewide, the average combined tax rate is just 4.434%.

Wisconsin

SeanPavonePhoto/Adobe City skyline

Wisconsin’s got it all: two Great Lakes shorelines, winning sports teams, and a super-low 5.00% sales tax rate. Localities can impose their own added sales tax, but it averages just 0.429% statewide.

Wyoming

aceshot/Adobe vintage barn in mormon row

Known as the Cowboy State, Wyoming is famed for wide open spaces and many national parks, including Yellowstone, Grand Teton, and Fort Laramie. It’s also ranked No.1 on the Tax Foundation’s State Business Tax Climate Index.

Wyoming has a modest 4.00% state sales tax, an average local sales tax of just 1.36%, and no individual or corporate income tax.

Maine

Danita Delimont/Adobe kennebunkport village harbor

Coastal Maine is a great state for anyone who enjoys lobster rolls, craft beer, lighthouses, or outdoor adventures. It’s home to sporting goods retailer L.L. Bean, Tom’s of Maine, and Stonewall Kitchens — everything you need for natural living and hearty eating. 

The Pine Tree State has a 5.50% state sales tax and no local sales tax.

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Kentucky, Maryland, Michigan, and Washington, D.C.

romanslavik.com/Adobe seattle cityscape with amazing view of the sky along with mount rainier

For the 10th spot on our list for lowest state sales tax, we have a four-way tie among Kentucky, Maryland, Michigan, and Washington, D.C. All four have a relatively low 6.0% state sales tax rate and no local sales tax.

South Dakota

Naya Na/Adobe south dakota big sioux river park

South Dakota may be an outdoor lover’s paradise. It boasts some of the nation’s best hunting and fishing and is home to world-famous attractions like Mount Rushmore, Badlands National Park, and the Black Hills — not to mention the mammoth Wall Drug Store.

Compared to other states, taxes are pretty low. South Dakota has a sales tax rate of just 4.20% and an average combined rate of 6.108% with local sales tax. This competitive figure places South Dakota 16th nationwide for the lowest combined sales tax rate.

Massachusetts

SeanPavonePhoto/Adobe Rockport Massachusetts USA downtown and harbor

While the Bay State may be a spendy place to buy a home, Bay Staters can breathe a little easier at the supermarket. Massachusetts has a state tax rate of 6.25% with no local sales tax.

Pennsylvania

SeanPavonePhoto/Adobe philadelphia pennsylvania

Pennsylvania is more than just steel. It’s home to Rite Aid, Dick’s Sporting Goods, Pep Boys, and David’s Bridal, among many other beloved all-American brands.

The Quaker State charges a 6.00% state sales tax rate, with additional taxes at the local level. Statewide, the average combined rate is 6.341%.

Alabama

SeanPavonePhoto/Adobe beautiful alabama skyline with golden lights and traffic at midnight

With a 4.00% state sales tax, Alabama makes our list of states with the lowest sales tax. But that figure is a bit deceptive, as the state also has the highest local tax rate in the country. Alabama has an average local rate of 5.237% for a combined rate of 9.237%.

This contrast is to point out that the devil is in the details. A low state sales tax doesn’t mean low sales taxes at checkout. Many other states have low state rates and high local ones, so taxpayers beware!

Minnesota

f11photo/Adobe Minneapolis downtown skyline in Minnesota USA

At 6.88%, Minnesota has the sixth-highest sales tax rate in the country. But the combined rate for state and local is middle-of-the-pack at 7.523%, close to the national median rate of 7.00%.

Sweetening the deal, many items are completely tax-exempt in Minnesota: baby products, clothing (even a Burberry coat), shoes, health products, textbooks, and food. Groceries are tax-free, but you’ll likely pay sales tax on food when you eat out.

Bottom line

Mediteraneo/Adobe father and son buying food

In an age of remote work where many Americans can move just about anywhere in a quest to make extra money, these 15 states offer a novel way to bring home the bacon (almost) tax-free.

Admittedly, with number 10 on our list a four-way tie, we’ve explored low tax rates across 18 states and the District of Columbia. But we’ve given you 15 low tax rates to mull over if you’ve got itchy feet.

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Author Details

Stacy Garrels

Stacy enjoys writing about fintech, consumer deals, the side hustle economy, and random tomfoolery. She's personally tried more than 100 different gigs, including being an Uber driver for one afternoon.