What are some states with zero sales tax?


Quick Answer

As of 2014, five states with zero sales tax are Alaska, Montana, New Hampshire, Delaware and Oregon, explains Dan Caplinger for AOL Money and Finance. Each state's tax revenue comes from three sources, sales taxes, property taxes and income taxes, and each state balances the tax rates in different ways.

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Full Answer

Alaska does not have a sales tax or income tax, although some areas have a local option tax, according to Caplinger. Montana also has some local option taxes, but not in any of its major cities, and makes up for it with high income taxes. New Hampshire has no sales tax or income tax but does have a high property tax. Delaware is known for its flat corporate income tax rate which, when paired with its personal income tax, allows the state to have no sales tax. Oregon has a high income tax rate to offset its lack of a sales tax.

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