States With the Lowest Sales Tax in 2026

Five states charge no statewide sales tax at all in 2026. But the gap between a low sales tax state and a genuinely low tax burden is wider than most people expect, and local rates are where the real story lives.

The Five States With No Statewide Sales Tax

Delaware, Montana, New Hampshire, Oregon, and Alaska all sit at 0% for the state portion of sales tax. That's the clean headline. The important asterisk belongs to Alaska.

Alaska lets municipalities set their own sales tax rates, and many do. Combined local rates in Alaska reach as high as 7.5% in some jurisdictions, giving the state an average combined rate around 1.76% when you weight it by population. If you live in Anchorage, you pay 0%. If you live in Ketchikan, you pay 5.5%. Location inside Alaska matters more than the state-level number.

Delaware, Montana, New Hampshire, and Oregon prohibit local sales taxes entirely. What you see is what you pay: nothing. For a household spending $60,000 annually on taxable goods, that's a difference of $2,760 compared to the national average combined rate of 7.0%.

If the sales tax picture matters to your retirement planning, pair this with our Best States for Retirees to Avoid Taxes breakdown, which weighs sales tax alongside income and property tax.

The Low-Tax Middle Tier: Under 5% Combined

Below the zero-tax states, a second group keeps combined rates under 5% in 2026.

Hawaii carries a 4.0% state rate. The state does not call it a sales tax officially. It's technically a General Excise Tax, and it applies to nearly every transaction in the economy, including services and business inputs. The real burden on consumers is higher than the posted rate because the tax compounds through the supply chain. Economists generally treat Hawaii's effective consumer burden closer to 4.3% to 4.5%.

Wyoming sits at 4.0% state rate with a combined average of approximately 5.36% once local taxes are added. That's still well below the national average.

Wisconsin holds a 5.0% state rate, but local additions are modest, keeping the combined average near 5.43%.

Maine charges 5.5% with no local sales tax permitted, which means the combined rate equals the state rate. No surprises at checkout.

Virginia restructured portions of its sales tax framework in recent years, currently at 4.3% statewide plus a mandatory 1% local option, putting the base combined rate at 5.3% across most of the state.

Which States Have the Highest Sales Tax in 2026

For contrast: Tennessee, Louisiana, Arkansas, Washington, and Alabama consistently rank at the top of combined sales tax burdens. Tennessee's combined rate exceeds 9.5% on average, with some counties hitting 9.75%. Louisiana averages above 9.5% as well.

Alabama's range runs from 4.0% to 11.0% depending on locality. That 11.0% ceiling is not theoretical. It applies in certain cities and counties when all local layers stack together.

Washington has no income tax, which attracts attention as a low-tax state. But its combined sales tax averages around 9.4%, one of the highest in the country. The state makes up significant revenue through consumption taxes rather than income. That trade-off is real, and it hits lower-income households harder because sales tax is regressive by design.

For a full picture of how high-tax states affect your actual take-home finances, see The True Cost of Living in High-Tax States.

What Low Sales Tax Actually Means for Your Wallet

Sales tax is visible but often underestimated in annual totals. A household in Tennessee spending $50,000 on taxable goods pays roughly $4,750 in combined sales taxes per year. The same household in Oregon pays zero.

That $4,750 gap compounds over a decade to more than $47,000, before accounting for any investment growth on the saved amount. For retirees on fixed incomes, the difference is meaningful because retirement spending is heavily weighted toward consumption rather than income.

Sales tax also does not exist in isolation. States with no sales tax often collect revenue elsewhere, through higher property taxes, income taxes, or both. New Hampshire has no income tax and no sales tax but carries some of the highest property tax rates in the country, averaging an effective rate of 1.77% on home values. Delaware has no sales tax but does tax income at rates up to 6.6%.

Use our state tax calculator to model your full tax burden across sales, income, and property taxes combined, not just one piece at a time.

Key Takeaways

• Five states have no statewide sales tax in 2026: Alaska, Delaware, Montana, New Hampshire, and Oregon. Only Alaska allows local jurisdictions to add their own, with combined rates reaching up to 7.5%.
• The highest combined sales tax rates in 2026 exceed 9.5% in Tennessee, Louisiana, and Alabama, meaning residents pay thousands more per year on everyday purchases than residents in no-tax states.
• Sales tax never tells the full story. States with zero sales tax frequently offset that advantage with higher income or property taxes. Your total burden depends on all three.

Compare your current state against the lowest-tax alternatives using our full state-by-state tool at liveordiehere.com.