According to the Tax Foundation in the USA, sales taxes made up around 30% of state revenue for the fiscal year 2021. Individual state income taxes generate 40% more money than sales taxes, which are in second place. However, there are a few states in the United States that are considered as no sales tax states. These states are Delaware, Oregon, Montana, and New Hampshire. While these states don’t have a sales tax, they do have other taxes in place to fund state services. It’s important to keep in mind that even without a sales tax, the overall cost of living in these states may not be lower than in states with a sales tax, as other factors such as property taxes and the cost of goods and services can also affect the cost of living.
What is sales tax?
A sales tax is a tax that is applied to the sale of goods and services. It is typically collected by the seller at the time of sale and is paid to the government. The tax is usually based on a percentage of the sale price of the goods or services. Sales taxes are used to fund various government programs and services, such as education, infrastructure, and public safety. The tax rate can vary depending on the location and the type of goods or services being purchased. Some states have a single, statewide sales tax rate, while others have different rates for different regions or types of goods and services.
Sales taxes are typically added to the price of goods and services at the point of sale. For example, if you are purchasing an item for $100 and the sales tax rate is 10%, you would pay a total of $110, with $10 being the sales tax. Some states have exemptions from the sales tax for certain types of goods or services, such as groceries, prescription drugs, or certain medical equipment. Some states also allow cities or counties to impose additional sales taxes on top of the state sales tax.
Let’s begin to know more details about those no-sales tax states; their location, economy, and what makes them unique states in the USA.
1. Delaware
Delaware is a small state located on the East Coast of the United States. It is known for its low taxes, including the absence of a sales tax as mentioned. Delaware is the second smallest state in the country by land area, but it is the sixth most populous state due to its high population density. The state capital is Dover, and the largest city is Wilmington.
Delaware is often referred to as the “Corporate Capital of the World,” as it is home to many large corporations. The state has a business-friendly legal system, with a number of laws that make it attractive for businesses to incorporate there. As a result, many large companies, including more than half of the Fortune 500, are incorporated in Delaware.
Despite its small size, Delaware has a diverse economy. The state’s top industries include financial services, manufacturing, and agriculture. Tourism is also a significant contributor to the state’s economy, with many visitors coming to enjoy the state’s beaches, parks, and historical sites. We know that one of the key attractions of Delaware for businesses is its lack of a sales tax. The state does have other taxes in place, including a property tax, a personal income tax, and a gross receipts tax on businesses. These taxes are used to fund state services, such as education and public safety.
Delaware is located in the northeastern United States, making it convenient for businesses to access major markets in the region. The state is easily accessible by car, with I-95 running through the state and connecting it to other major cities on the East Coast. The state is also home to a number of airports, including the Wilmington Airport and the New Castle Airport. In addition to its business-friendly environment, Delaware is known for its rich history and cultural attractions. The state has a number of historical sites, including the Old State House, the Old Court House, and the John Dickinson Plantation. The state is also home to a number of museums, including the Delaware Art Museum and the Delaware Museum of Natural History.
Moreover, Delaware has a number of parks and recreational areas, including the Cape Henlopen State Park and the Bombay Hook National Wildlife Refuge. The state’s beaches, including Rehoboth Beach and Bethany Beach, are popular destinations for tourists and locals alike. Delaware is known for its small-town charm and friendly communities. The state has a strong sense of community, with a number of events and festivals taking place throughout the year, including the Sea Witch Festival and the Delaware State Fair.
Overall, Delaware is a small but vibrant state with a rich history and a strong economy. Its business-friendly environment and lack of a sales tax make it an attractive place for businesses to operate and for people to live and work. This is the reason why Exaira chose Delaware to be our fulfillment facility in the USA.
2. Oregon
Oregon is a state located in the Pacific Northwest region of the United States. It is known for its diverse landscape, which includes everything from mountains and forests to beaches and fertile farmlands. The state is bordered by Washington to the north, Idaho to the east, Nevada, and California to the south, and the Pacific Ocean to the west.
Oregon has a population of around 4.2 million people and is the 27th most populous state in the country. The state capital is Salem, and the largest city is Portland. In addition, Oregon has a diverse economy, with industries ranging from agriculture and forestry to technology and manufacturing. The state is home to a number of large corporations, including Nike, Intel, and HP.
As you know, one unique aspect of Oregon is that it has no sales tax. Instead, the state has a gross receipts tax on businesses, which is similar to a sales tax. This tax is used to fund state services, such as education and transportation. Besides that, Oregon is known for its outdoor recreation opportunities, with a number of national parks, forests, and other public lands. Some of the most popular destinations in the state include Crater Lake National Park, the Columbia River Gorge, and the Oregon Coast.
Portland, the largest city in Oregon, is known for its unique culture and laid-back atmosphere. The city is home to a number of independent businesses, including coffee shops, breweries, and restaurants. Portland is also known for its food scene, with a number of farmer’s markets and food carts offering a variety of cuisines. Furthermore, the state of Oregon has a strong commitment to environmental protection and sustainability. The state has a number of laws in place to protect natural resources, including the Beach Bill, which protects the state’s beaches and coastal areas, and the Bottle Bill, which encourages the recycling of beverage containers.
Other than that, Oregon is also home to a number of renewable energy projects, including wind farms and hydroelectric dams. The state has a goal of getting 50% of its energy from renewable sources by 2040. In addition to its outdoor recreation opportunities and commitment to sustainability, Oregon is also known for its art and culture. The state is home to a number of museums, including the Portland Art Museum and the Jordan Schnitzer Museum of Art. The state is also home to a number of music festivals, including the Portland Jazz Festival and the Pickathon Music Festival.
Overall, Oregon is a diverse and vibrant state with a strong economy and a commitment to sustainability. Its lack of a sales tax and abundance of outdoor recreation opportunities make it an attractive place to live and work.
3. Montana
Montana is a state located in the western United States. It is known for its rugged landscape, which includes the Rocky Mountains and many national parks. Montana is the fourth largest state in the country by land area, and it has a population of around 1.1 million people. The state capital is Helena, and the largest city is Billings.
Montana has a diverse economy, with industries ranging from agriculture and mining to tourism and technology. The state is known for its natural beauty and outdoor recreation opportunities, with a number of national parks, forests, and other public lands. One unique aspect of Montana is that it has no sales tax. However, the state does have a use tax, which is similar to a sales tax and is applied to items purchased out of state and brought into Montana for use. The use tax is used to fund state services, such as education and public safety.
Did you know that Montana is known for its rugged landscape and outdoor recreation opportunities? The state has a number of national parks, including Yellowstone National Park, Glacier National Park, and the Lewis and Clark Caverns State Park. The state is also home to a number of ski resorts, including Big Sky Resort and Whitefish Mountain Resort. In addition to its outdoor recreation opportunities, Montana is also known for its rich history and cultural attractions. The state has a number of historical sites, including the Little Bighorn Battlefield National Monument and the Virginia City and Nevada City Living History Museum. The state is also home to a number of museums, including the Montana Historical Society Museum and the Museum of the Rockies.
Overall, Montana is a state with a strong economy and a rich history. Its lack of a sales tax and abundance of outdoor recreation opportunities make it an attractive place to live and work.
4. New Hampshire
New Hampshire is a state located in the New England region of the United States. It is known for its beautiful mountains and lakes, as well as its low taxes. New Hampshire is the fifth smallest state in the country by land area, and it has a population of around 1.4 million people. The state capital is Concord, and the largest city is Manchester.
New Hampshire has a diverse economy, with industries ranging from manufacturing and tourism to healthcare and technology. The state is home to a number of large corporations, including BAE Systems and Stonyfield Farm. We know that one unique aspect of New Hampshire is that it has no sales tax. However, the state does have a tax on meals, lodging, and some other items. This tax is used to fund state services, such as education and public safety.
Besides that, New Hampshire is known for its natural beauty and outdoor recreation opportunities. The state has a number of national parks, forests, and other public lands, including the White Mountain National Forest and the Mount Washington State Park. The state is also home to a number of ski resorts, including Loon Mountain and Cannon Mountain. In addition to its outdoor recreation opportunities, New Hampshire is also known for its rich history and cultural attractions. The state has a number of historical sites, including the Portsmouth Naval Shipyard and the Strawbery Banke Museum. The state is also home to a number of museums, including the New Hampshire Historical Society Museum and the McAuliffe-Shepard Discovery Center.
Overall, New Hampshire is a state with a strong economy and a rich history. Its lack of a sales tax and abundance of outdoor recreation opportunities make it an attractive place to live and work.
While these states don’t have a traditional sales tax, they do have other taxes in place to fund state services. It’s important to keep in mind that even without a sales tax, the overall cost of living in these states may not be lower than in states with a sales tax, as other factors such as property taxes and the cost of goods and services can also affect the cost of living.