Which States Have No Income Tax or Sales Tax?

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The only state without a sales and income tax, as of 2015, is the state of Alaska. There are, however, seven states without income taxes and five without sales taxes. There are also two states with only limited individual income taxes that cover dividend and interest incomes.

The five states without a sales tax are Alaska, Montana, New Hampshire, Delaware and Oregon. Alaska does, however, allow state locales to have individual sales taxes that average a rate of 1.69 percent. Montana also allows for local-option resort taxes in some areas of the state to cover the costs of maintaining those areas due to extensive use. The seven states with no income taxes are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. The two states with limited income taxes are Tennessee and New Hampshire.

States without sales or income taxes often recoup the monies that would have been gained from the lost tax by increasing other taxes. Property tax is one of the common alternative sources for a sales or income tax. Rather than rely on income and sales tax, Alaska gains its state income primarily from oil tax revenue and royalties. This even extends to the point where Alaskan residents received $1,884 per individual from oil revenues in 2014.