Are you looking to save tax in USA for shopping? then this article is for you to save an extra penny while shopping in different regions in the US.
Tax free states in USA for shopping
According to the Tax Foundation, 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.
There are only five states that do not require you to pay sales tax on products and services: Delaware, Alaska, Montana, New Hampshire, and Oregon.
The absence of a state sales tax does not, however, preclude towns, parishes, municipalities, or other communities within that state from enacting one. For each of the five states that do not impose a state sales tax, we will describe these inconveniences below.
What Do Sales Taxes Mean?
On the sale of goods and services, a state may typically impose a sales tax. However, there are specific circumstances in which sales taxes are not applicable. For instance, Louisiana levies a state sales tax of 4.65% on most products and services, but food, prescription drugs, and utilities are exempt from the tax.
Throughout the year, numerous states provide their residents a break from paying sales taxes. Usually, consumers in these states are able to avoid paying taxes on purchases made during this time, including clothing, school supplies, and disaster preparedness products.
5 States That Don’t Have Sales Tax
The list of states without sales taxes is followed by details on the additional taxes that each state levies.
Alaska doesn’t levy a state income tax or a statewide sales tax. Many of its towns do, however, levy a sales tax, with rates as high as 7% for 2022. Other local taxes are imposed on things like fish, lodging, alcohol, and tobacco.
Local personal property taxes and a corporate tax of up to 9.40% are also levied in Alaska.
Delaware does not have a state or local sales tax, although it does have a moderate state income tax that can reach 6.6% in 2022. Within the state, there is also a jurisdiction that collects local income taxes on individuals. Taxes on inventory and personal property are also exempt for the state.
However, Delaware charges its corporate taxpayers an 8.7% tax rate.
In Montana, there is no sales tax imposed by either the state or the local governments. It applies a reasonable individual income tax of up to 6.75% for 2022. Any property owned as of January 1 for the tax year is subject to both a real estate tax and a personal property tax from the state.
The current corporate income tax rate in Montana is 6.75%.
In New Hampshire, neither the state nor the municipal governments levy sales taxes. The state levies an individual income tax, however, it is one of the few that uses a flat rate. Only dividend and interest income is subject to the 5% individual income tax rate.
The rate of corporate income tax in New Hampshire is 7.60%.
In Oregon, there are no municipal or state sales taxes, but there is an income tax on individuals. The top individual income tax rate for 2022 is 9.90%. Additionally, certain jurisdictions in Oregon collect municipal income taxes.