Shopping is one of life’s little joys, but if you’ve ever seen the sales tax added to your total at checkout, you know that it can quickly turn into a bit of a headache. That extra percentage can make even a simple purchase seem more expensive, and if you live in a state with high sales tax, those costs can add up over time.
But here’s the good news: Some states in the U.S. have much lower sales tax rates, and some even have zero sales tax altogether. So, if you’re looking to stretch your dollar a little further while shopping, this article is for you. We’ll dive into the states where you’ll find the lowest sales tax rates, how these rates can impact your budget, and how you can use this information to shop smarter.
Why Sales Tax Should Matter to Shoppers
Sales tax is the percentage added to the price of goods and services when you make a purchase. While the sales tax rate is typically a small percentage, it can quickly add up, especially if you’re making larger purchases. For instance, a $1,000 purchase with a 6% sales tax means you’ll pay an extra $60 in tax. For big-ticket items like electronics, home goods, and even cars, that extra cost can be significant.
The good news is that not every state in the U.S. charges the same sales tax rate. In fact, some states have no sales tax at all, while others have much lower rates than the national average. By shopping in these states, you could save a lot of money over time, making a noticeable impact on your purchasing power.
The States with the Lowest Sales Tax Rates in the US
Let’s explore the states where you can enjoy the lowest sales tax rates. Whether you’re a frequent shopper or planning a big purchase, knowing where to shop can help you save significantly.
1. Alaska: No State Sales Tax
Alaska is a standout when it comes to low sales tax rates. The state has no state-level sales tax, which means you won’t pay any tax on your purchases in most areas. While some local municipalities within Alaska may charge a small local sales tax, the state-level tax is zero, which can be a huge win for shoppers.
For instance, if you’re planning a $500 shopping spree in Anchorage—a city in Alaska that imposes a local tax of 1.5%—you’ll only pay $7.50 in sales tax. That’s much better than paying $35 in a state with a 7% sales tax.
2. Delaware: No State Sales Tax
Another top contender is Delaware, which also does not impose a state sales tax. This makes it an excellent destination for shopping, particularly for larger items. Whether you’re picking up clothing, electronics, or furniture, the price you see is the price you pay.
Think about it: A $1,000 purchase of a new laptop or TV would save you $60 in tax by shopping in Delaware rather than in a state with a 6% or 7% sales tax.
3. Montana: No State Sales Tax
In Montana, you can enjoy shopping without worrying about sales tax altogether. Much like Delaware, Montana does not charge a state-level sales tax. And while local governments in certain areas may impose their own taxes, the state’s absence of a statewide sales tax is a big plus for shoppers.
Montana is also known for its beautiful landscapes and outdoor gear shops, so if you’re in need of new hiking or camping equipment, this could be the place to go.
4. Oregon: No State Sales Tax
Like Delaware and Montana, Oregon is one of the few states that has no state sales tax. This tax-friendly environment makes it a great destination for consumers looking to buy items like clothing, electronics, or even cars.
Imagine you’re shopping for a new washing machine that costs $800. In a state with 6% sales tax, you would pay an additional $48 in tax. But in Oregon, that same $800 purchase would only cost you $800—nothing extra.
5. New Hampshire: No State Sales Tax
If you’re headed to the Northeast, New Hampshire is another state with no state-level sales tax. You can purchase everything from electronics to clothing without worrying about the extra cost of tax being added to your bill. While some states in this region have fairly high sales tax rates, New Hampshire offers shoppers a break by keeping things tax-free.
This is great news for those who live in nearby states with higher tax rates, like Massachusetts, as it makes a quick trip to New Hampshire worth the while for big purchases.
How These States Impact Your Shopping Habits
Shopping in states with low or no sales tax can have a noticeable impact on your shopping habits and overall budget. Let’s take a closer look at how these states can help you get more for your money:
1. Lower Costs for Everyday Purchases
Even though the sales tax on smaller purchases, like groceries and household items, may seem like a small addition, it can add up over time. For example, let’s say you spend $100 on groceries. In a state with a 7% sales tax, you’ll pay an extra $7. While this may not seem like much, if you make this purchase every week, the total adds up to $364 per year. In states with no sales tax, you can save that $364 and put it toward something else.
2. Bigger Savings on Big Purchases
For larger purchases, such as electronics, furniture, or appliances, shopping in a low-tax state can lead to substantial savings. Imagine buying a $2,000 mattress. In a state with 6% sales tax, you’d pay an additional $120 in tax. But in states like Delaware, Montana, or Oregon, you won’t pay any sales tax at all, keeping that $120 in your pocket.
3. Shopping During Special Sales Events
Some states also offer tax-free weekends or sales tax holidays, where certain goods are exempt from sales tax for a limited time. For example, Texas and Florida have annual sales tax holidays for back-to-school shopping, where clothing, school supplies, and even some electronics are tax-free. By planning your shopping around these events, you can save even more.
How to Make the Most of Shopping in Low-Tax States
If you’re interested in maximizing your savings while shopping in states with low sales tax, here are a few tips to make the most of your purchases:
1. Plan Your Purchases Strategically
Take the time to plan larger purchases, like appliances or furniture, during trips to no sales tax states. Even if you don’t live in a low-tax state, consider taking a weekend getaway to Oregon or Delaware to buy major items like electronics or household goods.
2. Shop Online from Tax-Free States
If you live in a state with a higher sales tax, you can still take advantage of tax-free shopping by purchasing items online from retailers in states like Montana or Oregon. Many online stores will ship products directly to you, and you won’t have to worry about sales tax on your purchases.
3. Combine Shopping Trips with Other Activities
Since shopping in low-tax states can be an enjoyable experience, why not combine it with a fun getaway? For example, a trip to Montana or Oregon can include outdoor activities, scenic tours, and a tax-free shopping spree.
Conclusion: Save More, Shop Smarter
Shopping in the US doesn’t have to be a costly affair. By being smart about where you shop and taking advantage of states with low sales tax, you can make your hard-earned money go further. Whether it’s a major electronics purchase, a new wardrobe, or even just everyday groceries, knowing where to shop can have a big impact on your budget.
For more information on sales tax rates and how they impact your shopping habits, visit Tax Laws in USA, where we break down the tax laws that affect you.
Now that you know where to find the lowest sales tax rates, go ahead and shop smarter—your wallet will thank you!
By shopping in states with low sales tax, you can get more for your money and keep your budget intact. Happy shopping!