There are a lot of different taxes that the average person pays in this life. Of course, there is an income tax. Even with that you typically have social security and Medicare taxes to worry about. You pay tax when you fill up your car with gas, and often there is a tax associated with any property that you own. Each year, you will pay a tax on your automobile. The list can go on and on. We have not even got to the state and local taxes yet. In fact, you will pay a state sales tax in 45 states plus the District of Columbia. This means that you will pay a certain percentage in tax for every item that you buy. Yikes, the taxes just keep going. However, there are five states where you will pay no state sales tax at all.
It is true that Alaska has no state sales tax to speak of. However, the state does permit local communities to assess their own local sales tax. In some places, this jumps to as high as 7.5 percent. The average statewide is a much lower 1.43 percent. This can get quite confusing for people who travel from one part of the state to another, as you might never know how much you are going to pay in tax. Also, while there is not a state sales tax in Alaska, the property tax can be quite high. The average tax for a $250,000 home is about $2,950 per year.
Delaware is the second state on our list that does not charge a sales tax. Contrary to Alaska, they do not allow local communities to charge a sales tax either. This means that you can enjoy shopping statewide without ever having to worry about paying a sales tax. An interesting part of this story is that Salem County, New Jersey has recently cut its sales tax in half. This is because it borders Delaware and residents were just driving across the border to buy many goods. Delaware does have a state income tax and property tax.
There is no sales tax statewide in Montana. However, some resort areas have passed an ordinance to be able to charge a local sales tax. At the current time, these include the Big Sky, Red Lodge, and West Yellowstone areas of Montana. There is an income tax in Montana charged at between 1 percent on the low end 6.9 percent of taxable income on this high end. The property tax in Montana is also quite high. On a $200,000 property, you can expect to pay in the neighborhood of $1,700 in annual taxes.
4. New Hampshire
New Hampshire is a state that on the surface seems to charge very little in the way of taxes. They have no sales tax, and no local sales tax either. You can shop as much as you want and not have to worry about any sales tax. In fact, there is no income tax in the state either, although there is a tax on dividends and interest that exceed a certain dollar amount. Expect to pay more than your share of taxes on any property that you own. The annual tax on a $240,000 home is currently about $5,250.
Oregon is the final state on our list that does not charge a sales tax anywhere in the state. No local sales tax is charged either. However, keep in mind that there is an income tax rate that ranges between 5 percent on the low end and 9.9 percent on this high end. Property taxes are higher than average, with an annual assessment of over $2,625 being charged on a home valued at $247,000.
So, are you ready to move to one of these five states so that you can avoid paying sales tax on the items that you buy every day? Well, don’t schedule the moving truck just yet. Remember that money for infrastructure must come from somewhere. If a state does not have a sales tax to collect revenue, you can bet that they make up for it somewhere else. In New Hampshire, for example, you will pay the highest tax rate in the country on any property that you own. Do yourself a favor and pick your living environment based on what you enjoy and no how much sales tax you will pay.