The five states in America that don't collect a sales tax are Montana, Oregon, Alaska, Delaware and New Hampshire. Prior to the Great Depression, state sales taxes were mostly non-existent throughout the nation except in a few places. But starting in the 1930s, several states began to adopt these taxes as part of an economic recovery process. By 1940 sales taxes could be found in over half the country. Three decades laters, sales taxes became the top source of income for most states. These are the 5 states that don't have sales tax.
For people who love the great outdoors, Montana is one of the most carefree states in the nation. It's a popular attraction for RV travelers, campers and hikers. It's an ideal state for registering an RV due to having no sales tax, which allows you to save several thousand dollars on purchasing a mobile home. The registration process is also simple with low fees. Cost of living in Montana is among the lowest in America.
So if you like to travel and see beautiful scenery, you can enjoy great savings with no sales tax on purchases of luxury vehicles, planes, boats, trailers, trucks and motorcycles. Local sales taxes are imposed in some jurisdictions, but overall, you will have the freedom to give back to the community how you choose instead of the government deciding for you.
Although Oregon doesn't have a sales tax, the other side of the coin is that it has an income tax to make up for it, ranging from 5 to 9.9%. It also has a high estate tax of up to 16% on inherited property valued over $1 million. Even so, there are many advantages to residing or starting a business in Oregon. Profits from stocks and bonds are not taxes, which is attractive to investors. It's a peaceful back-to-nature state with plenty of wilderness. As with the other four states mentioned, it's a target location if you earn a living from selling products on Amazon. Oregon borders Washington, which CNBC rated as the top state for business in 2017.
As one of the nation's most tax-friendly states, Alaska has neither a sales tax nor an income tax, along with America's lowest gas tax. Furthermore, there's no property tax on motor vehicles. As a bonus, residents earn a piece of state's oil revenue through the Alaska Permanent Fund dividend, which equates to around $700 to $1,000 per individual, depending on the price of oil. However, you may still have to pay a low sales tax at the local level in some jurisdictions on certain goods and services.
Fishing is very popular in the state, while you can save plenty of money on purchasing a boat. If you enjoy viewing mountains and wildlife, there's excellent scenery everywhere you turn. One of Alaska's most unique qualities is that the sun never sets in the summertime, making it an inspiring place for both recreation and business.
Banks have long used Delaware as a corporate no sales tax strategy to help cut costs. The reason huge firms use dropbox addresses in the state is due to minimal government regulations compared with most of the nation. Additionally, the state has low income tax rates under 7% and doesn't mandate a vehicle tax.
The state earns much of its income from corporate franchise taxes, but the reason why many large corporations base their headquarters in Delaware is that it's a very business-friendly state. The simplicity of establishing a business in the state makes it a top choice among entrepreneurs. It's no wonder that almost half of all U.S. public corporations are incorporated there, as it's a widely favored tax haven for both foreign and domestic businesses. It's also an ideal place to collect expensive art from galleries.
Even though New Hampshire has no income tax, there is a 5% income tax on dividend and interest income, along with a high gas tax rate and high property tax rate. Sales taxes are applied to only a handful of goods and services, such as car rentals and real estate sales. It's a great place to retire and live on a houseboat, in which you'll be able to invest your tax savings into your retirement goals. There's also plenty of open space and mountains to help you appreciate nature. One of the key reasons to move to New Hampshire is that it generally has a stable economy.
If you're tired of paying sales tax, you can move to five states to save money on purchases for big ticket items, such as motor vehicles. Montana, Oregon, Alaska, Delaware and New Hampshire each have no state sales tax. These states are advantageous for registering multiple vehicles through your business. Contact your registered agent to get started on a new life with less regulation and more savings.