NOMAD: States without statewide sales tax rates

CURRENTLY, the US has five states with no sales tax New Hampshire, Oregon, Montana, Alaska, and Delaware. A popular way to remember which states are with the acronym NOMAD.

Although these states do not have a statewide sales tax, they do have other taxes.

New Hampshire does not have a sales tax, even in individual municipalities. However, you will see meals and room tax on your bill if you are dining out, staying in rented accommodations, or renting a motor vehicle in the state. The New Hampshire meals and rooms tax rate is 9%, as is the vehicle rental tax.

Oregon also does not have a sales tax. However, the state has high-income tax rates, as high as 9.9% for the top tax bracket in 2020. While there is no statewide sales tax, municipalities are allowed to set their own local sales taxes. Some cities also have a food and beverage tax that applies to the sale of prepared food and beverages. The state also has a bottle deposit fee and an E911 fee, a $0.75 tax applied to any device capable of dialing 911. These fees are charged to consumers of certain canned or bottled beverages and prepaid calling cards. The fees help support recycling initiatives and the E911 statewide call system.

Montana does not have a state sales tax. Montana also doesn’t have local sales taxes, either. Montana makes up for the lack of sales tax; it makes up for it with other taxes, including natural resource taxes, personal income taxes from individuals and businesses, tourism-related taxes, and property taxes.

Alaska does not have statewide sales tax because most of its funding comes from oil production revenues. However, many local municipalities and boroughs have their own sales tax. Sales Tax rates in Alaska can range from 1-7 percent.

Delaware also does not have a statewide sales tax. Instead, Delaware collects income taxes and several other taxes from businesses, which makes up for it. Cities also collect property taxes to help fund projects and services that improve and protect the community. While property taxes vary, the average property tax in Delaware is 0.43%.

About Davis Davis & Harmon LLC – Sales Tax Experts: Headquartered in Dallas, Texas, Davis Davis & Harmon LLC – Sales Tax Experts specializes in sales/use tax refund recovery and audit defense. Our team of consultants is comprised of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At Davis Davis & Harmon, LLC we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.

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