5 states with no sales tax in the US, saving millions of dollars

You open a company in the US to conduct trading, e-commerce business or regularly transact in the US with customers and partners. You need to cut down and optimize sales tax to maximize profits, saving millions of dollars in sales tax.

In this article, GLA will point out the Top 5 states with no sales tax that you need to write to choose the US state to establish a company to optimize taxes and profits, saving up to millions of dollars.

1. What is sales tax?

Sales tax is a type of tax that is Applicable to goods and services sold and consumed in the US.

Each US state will have a different sales tax rate. In the US, sales tax is applied to 45 states and the District of Columbia. Sales tax rates applied to US states range from 2,9% to 7,25% at the state level. In the US, there are 5 states that are exempt from sales tax, including: Alaska, Montana, New Hamspire, Delaware and Oregon. 

2. Top 5 US states with no sales tax

The top 5 US states for opening a company with sales tax incentives are Alaska, Montana, New Hampshire, Delaware, and New Region.

2.1. Alaska

Alaska does not have a sales tax, but it does have a local sales tax. For individuals, the state of Alaska does not levy an income tax. Alaska collects a progressive corporate income tax, ranging from 0% to 9,4%. The local sales tax rate in Alaska is: 1,82%. 

Alaska does not collect estate or inheritance taxes. The majority of the state budget is funded by royalties, specifically oil and gas taxes from large regional corporations such as ExxonMob, CononoPhillips, and BP. 

Alaska is rated as a tax-friendly state by the Tax Foundation (Alaska Tax Data Explorer), and Alaska's tax system ranks 3rd in the 2024 State Business Tax Climate Index. 

2.2. Montana

Montana has no sales tax, but its personal income tax rate is quite high, ranging from 4,7% to 5,9%. Montana has a corporate income tax rate of 6,75%. Montana imposes a local sales option tax on resorts, lodging, camping, and restaurants. Montana does not collect any estate or inheritance taxes. Montana imposes an excise tax on gasoline and tobacco. 

2.3. New Hamspire

New Hampshire does not have a sales tax. New Hampshire has a flat 3% income tax and only taxes dividends and interest income. New Hampshire has a 7,5% corporate income tax. New Hampshire does not have an estate tax or inheritance tax. New Hampshire has an excise tax on gasoline and tobacco.

2.4. Delaware

Although Dale is a small state, most of the major national corporations are headquartered here. Dale also attracts consumers with its zero sales tax policy. As a result, Dale is a fertile land, attracting the majority of consumers from Philadelphia and Baltimore.

However, businesses should consider choosing Delaware as a place to start a business because the state's flat corporate income tax rate of 8.7% combined with high personal income taxes. Delaware's personal income tax rate is progressive, ranging from 2,2% to 6,6%. 

2.5. Oregon

Among the states with no sales tax, Oregon has the most advantages. Oregon has no sales tax on goods and services but a high income tax, while some neighboring states (specifically Washington) have high sales taxes and no income tax. 

As a result, citizens living between these two states have taken advantage of the tax breaks of both Oregon and Washington to buy cheap goods and pay zero income tax.

While there is no general state sales tax in Oregon, the state does have an excise tax on bicycles. The flat $15 excise tax on bicycles is collected by the retailer at the point of sale, so it is similar to a sales tax. There is also a vehicle tax in Oregon.

3. How does GLA help you with US federal tax compliance?

GLA with knowledge, experience and practice in supporting foreign companies and foreigners to establish companies in the US in a complete package, is a professional consultant for many US companies and will support you:

• Choosing a state to set up a US company without sales tax is suitable for your business and company orientation.
• Consulting on suitable company types, helping businesses optimize business operations.
• Assist US companies in complying with laws and annual requirements legally, accurately and efficiently.
• Support in preparing and declaring annual reports accurately and legally to avoid penalties.
• Tax and accounting services and financial reporting according to US accounting standards accurately and quickly.
• Register to open and verify a bank account with high credibility in the US.

4. Frequently asked questions when choosing a state to open a US company

Highlights

• Sales tax is a tax imposed on goods and services sold and consumed in the United States, applicable in states that require it.
• The five states with sales tax incentives are Alaska, Montana, New Hampshire, Delaware, and Oregon.
• If you are in need of establishing a company in the US and supporting services, GLA will be a powerful companion with optimal costs, fully meeting operational needs.
• Find out now Company formation services in the US of GLA, own an American company at optimal cost, operating effectively, legally, every year.