Whenever you visit any mall or supermarket, you must have noticed an additional price tag added on your purchase – it is the sales tax. The sales tax regulations generally come in various forms – right from the value-added to excise tax – the majority of states in the United Stated add this to your base price for goods you purchase. However, there are 5 lucky states in the US that residents do not have to pay sales tax.
But, what does this mean to get exempt from the sales tax or which states are totally sales-tax-free? Let us find it here:
Five top states that do not have to pay sales tax:
- Delaware
- Alaska
- New Hampshire
- Oregon
- Montana
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If you are living or running a business in states with no sales tax, then you have something to smile, as you do not need to worry about paying sales tax. While it is less possible you’re responsible for these local taxes, you must always check out with the state’s taxing authority whenever you find that you have got nexus in the state. In addition, lots of states with the low sales tax act generally have higher income taxes, so it is very important that you check it out.
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1. Delaware
Without any doubt, Delaware has no sales tax! But, for the businesses, Delaware imposes the gross receipts tax that includes a certain percentage of receipts of the goods that are sold by a business in a given state. Whereas this tax isn’t shared by the consumers, it might get reflected in a cost of actual good.
But, Delaware’s living cost is around 0.4% much higher than the national average. In addition, the income per capita average is at a lower side – and at $42,917, as per USA Today. Thus, whereas residents of Delaware get the break from the sales tax audit, they might be paying in other ways.
2. Alaska
Alaska also exempts its residents from the sales tax that sounds really great. However, there is caveat – Alaska permits localities in imposing the sales tax in certain areas – over 1.76%. Still, as it’s minimal, typically Alaska is tax efficient to buy goods or services. The living cost in Alaska is around 5.6% much higher than the national average & 8th highest in the nation.
But, Alaska’s income per capita average is highest in a nation and hitting over $48,973 till 2018. Thus, many areas of Alaska don’t impose any sales tax, most of the localities do – however high per capita income might somewhat balance living cost.
3. New Hampshire
Lucky residents in New Hampshire do not need to pay any kind of sales tax. However, before you move to New Hampshire, the state has the highest living costs – at 5% above the national average, and ninth-highest. However, to help to offset that, Granite State has the higher per capita income in this nation – hitting over $47,530 on an average.
4. Oregon
Oregon is the sales tax compliance free and, the boot has the lower living cost when compared to the national average. With average living costs at over 0.8% below the national average, definitely Oregon saves its residents a lot of cash. However, it has a lower personal per capita income, at above $40,000 – and, 15th lowest. In addition, income tax is at a high side – thus, even though you will catch the break at the supermarket of Oregon, you will be charged somewhere else for living in this state.
5. Montana
Very much like Alaska, even Montana allows some localities in imposing the sales tax. However, in general, the state doesn’t impose any kind of sales taxes. Thus, depending upon where you are roaming in Treasure State, you are subject to certain sales taxes. In addition, Montana has a lower living cost (at -5.2% below the national average), however, it has a lower per capita income also (at $40,985).
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So, do you think it is cheaper to stay in the state without any Sales Tax?
Unluckily, you cannot have this all. Whereas these states will be exempt from the sales tax for the most part (undoubtedly will save you cash while buying goods or services), many of them will make up for savings in some ways.
