Updated 2026-10-22 · 6 min read
US Tax-Free States: What 0% Really Means
Five US states have no state-level general sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. That does not always mean a checkout total of zero. Local taxes, product categories, and special district rules can still apply. This guide separates the state-level rule from the final checkout amount.
The five states
The five states are Alaska (AK), Delaware (DE), Montana (MT), New Hampshire (NH), and Oregon (OR). Each has no state-level general sales tax. The practical effect depends on what you buy and where the seller is located.
| State | State sales tax | Local taxes to watch |
|---|---|---|
| Alaska | 0% | Some municipalities charge local sales tax |
| Delaware | 0% | No general local sales tax; gross receipts tax applies to some businesses |
| Montana | 0% | Some resort and local option taxes |
| New Hampshire | 0% | Meals and rooms taxes |
| Oregon | 0% | No general local sales tax |
State tax is not the whole checkout
A seller may collect local sales tax, lodging tax, meals tax, or a special district tax even when the state rate is zero. Digital goods and services can be taxed differently from physical products. Marketplace facilitator laws can also change who collects the tax.
The only reliable answer for a specific purchase is the seller’s checkout calculation for the exact destination and product. A state-level summary is a starting point, not a quote.
Why a synthetic address is not a tax strategy
A generated address is a test fixture. It is not a billing address, a delivery address, or proof of residency. Using a synthetic address to reduce tax may violate the merchant’s terms and local law, and it can create a mismatch with the payment method.
If you are testing a checkout, use a sandbox or test mode and a clearly labeled fixture. Do not run a live transaction with a fake address to see what happens.
What to test in a checkout flow
Build a small matrix: one address in each of the five states, one taxable product, one digital product, and one address with a unit. Check the tax line, the shipping line, and the order summary separately. Then compare the result with the merchant’s published tax policy.
- State rate and local rate display separately?
- Digital goods treated differently from physical goods?
- Shipping charged tax or not?
- Address validation rejects a valid format?
- Tax recalculates after a state change?
Where to verify
Use the state revenue department’s official guidance for the state rate, local tax boundaries, and product-specific rules. For a multi-state seller, a tax engine or a tax professional is more reliable than a blog summary. The dates and rates on this page are a snapshot, not a live tax feed.
Questions
- No state has zero sales tax in every local jurisdiction for every product. Five states have no state-level general sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Local and product-specific taxes can still apply.
- Delaware has no state or local general sales tax. It does impose gross receipts tax on some businesses, which is not the same as a consumer sales tax. Some product-specific fees may still apply.
- Oregon has no general sales tax, but specific fees and rules can apply to certain services. Check the Oregon Department of Revenue for the exact product category.
- Do not use a synthetic address for a real purchase. Use a real billing and delivery address that matches your payment method. Synthetic addresses are for sandbox testing and format research.