These States Have No Sales Tax

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There are 4 states with no sales tax, 5 if you include Alaska which has no state sales tax but allows local sales taxes. There’s no such thing as a free lunch, these states still need to fund themselves and do so through income and property taxes. However, this means that residents of nearby high sales tax states can save a bundle by shopping smartly in states with no sales taxes. Read on to find out the names of best states to shop in and other ways you can keep more of your income.

You can read more here http://www.fool.com/investing/general/2014/05/24/these-states-have-no-sales-tax.aspx

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These States Have No Sales Tax

  1. 1. These States Have No Sales Tax
  2. 2. Sales Tax Sales tax is a tax paid to the government for sales of certain goods and services. In the U.S, food sold at grocery stores and prescription medicine are generally excluded from sales tax, while some states also exclude clothing.
  3. 3. Use Tax Most people are familiar with sales tax, but fewer know about use taxes. Use tax applies to purchases of tangible personal property from out-of- state retailers for use in-state and includes purchases from Internet retailers, from catalog companies, or when visiting another state. Consumers in states with sales taxes have an obligation to pay use tax on out-of-state purchases (though not many people do in practice). Twenty-seven states currently have a line on their tax form for taxpayers to include their use tax obligations.
  4. 4. State Versus Local Sales Taxes • 45 states in the U.S. have a state sales tax. • 46 states allow local sales taxes. • The average state sales tax is 5.1%. • The average local sales tax is 1.3%. • The combined average state and local sales tax is 6.4%. Source: Tax Foundation
  5. 5. The 5 States With No Sales Tax
  6. 6. Delaware • Compare that with shopping in Maryland (6%), Pennsylvania (6.34%), New Jersey (6.97%), or New York (8.47%). Source: Wikimedia Commons • Delaware has no state or local sales taxes. • It funds itself mainly through the individual income tax, as well as corporate taxes. Source: Tax Foundation
  7. 7. Montana • Montana has no state or local sales taxes on general goods. • It funds itself mainly through property taxes, resort taxes, and an income tax. • Tourist destination locales are allowed to charge a “resort tax,” which is a sales tax capped at 3% on goods and services catering to tourists. Source: Wikimedia Commons Source: Tax Foundation
  8. 8. New Hampshire • Compare that with shopping in Massachusetts (6.25%), Maine (5.5%), Vermont (6.14%), or Rhode Island (7%). Source: Wikimedia Commons • New Hampshire has no state or local sales taxes. • It funds itself mainly through property taxes, as well as corporate income taxes. Source: Wikimedia Commons Source: Tax Foundation
  9. 9. Oregon • Compare that with shopping in California (8.41%), Idaho (6.03%), Nevada (7.93%), or Washington (8.88%). • Oregon has no state or local sales taxes. • It funds itself equally through property taxes and an individual income tax. Source: Wikimedia Commons Source: Tax Foundation
  10. 10. Alaska • Alaska primarily funds itself through taxes and royalties on oil and gas production. • Alaska has no state sales tax but does allow a local sales tax, which is capped at 7%. • The Tax Foundation’s population-weighted average of local sales taxes comes to 1.69%.Source: Wikimedia Commons Source: Tax Foundation
  11. 11. All 50 Combined State and Local Tax Rates
  12. 12. All 50 Combined State and Local Tax Rates Source: TaxFoundation.org/Maps
  13. 13. Other Ways to Save Money on Taxes We have prepared a special free report to help you reach you keep more of your income. Click below to read: Take Advantage of This Little-Known IRS Rule

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