NOMAD States Explained: The 5 US States With No Sales Tax

Published June 26, 2026 · 8 min read

If you have ever shipped a package across state lines in the United States, you have probably noticed that your final invoice depends a lot on the destination. Sales tax in the US is set at the state level — with additional local layers — and only five states levy no statewide sales tax at all. They are commonly remembered with the acronym NOMAD:

This article walks through each of the five, explains why each state ended up here, and flags the local-tax exceptions that can still bite an unsuspecting buyer or developer.

Why “tax-free” needs an asterisk

Before diving in, one piece of vocabulary. “Tax-free state” is shorthand for no statewide sales tax. The state itself does not impose a percent-on-purchase tax that applies uniformly across its territory. It does not mean:

New Hampshire

New Hampshire is famous in the Northeast as the “run across the border to buy liquor” state. It has no statewide general sales tax and no income tax on wages (though interest and dividends were taxed under the I&D Tax until its phase-out was completed in 2025). Two important local exceptions exist:

For ordinary retail and e-commerce, a New Hampshire shipping address sees no sales-tax line. ZIP codes start with 03, and the phone area code statewide is 603.

Oregon

Oregon has refused a statewide sales tax in nine separate ballot measures since the 1930s, the most recent in 1993, with margins that have rarely been close. It funds public services primarily through a relatively high state income tax (top marginal rate near 9.9%) and a Corporate Activity Tax (CAT) on large gross receipts — effectively a tax on the business, not stamped on the consumer’s receipt. From a shipping-address perspective, Oregon is one of the cleanest no-sales-tax states. ZIP codes start with 97, and area codes include 503, 541, 458, and 971.

Montana

Montana has no general statewide sales tax but does levy targeted “resort and local option taxes” in a small number of tourist destinations — Big Sky, West Yellowstone, Whitefish, and a handful of others — specifically on lodging, prepared food, and recreation. These do not affect ordinary online retail to a Montana residential address. Montana’s ZIP codes start with 59, and the statewide area code is 406.

Alaska

Alaska is the most asterisked entry on the NOMAD list. There is no statewide sales tax, but boroughs and municipalities can — and many do — impose their own local sales tax, often in the 3% to 7% range, sometimes seasonal. Anchorage is famously tax-free at the register, while Juneau and many smaller communities are not. For e-commerce shipping, a marketplace facilitator law adopted in 2020 caused many remote sellers to start charging Alaska sales tax matched to the buyer’s borough.

If you are testing a checkout flow that conditionally hides the sales-tax line, do not assume an Alaska address is always tax-free — check the buyer’s borough. Alaska ZIP codes start with 99, and the statewide area code is 907.

Delaware

Delaware famously has no sales tax, which is one reason it hosts a long stretch of outlet malls just over the border from Maryland and Pennsylvania. Delaware funds itself partly through a Gross Receipts Tax on businesses (paid by the seller on revenue, not by the consumer on purchase) and partly through the franchise-tax revenue from the more than one million businesses incorporated in the state. For shipping addresses, Delaware is uniformly no-sales-tax. ZIP codes start with 19, and the statewide area code is 302.

Why this matters for testing and e-commerce

For software developers, the practical relevance of the NOMAD states is twofold.

First, if you are building a checkout, shipping, or invoicing flow, you need test fixtures for the edge case where state tax is zero. Sampling random addresses across all 50 states will leave a fragile gap — the cases where your shopping-cart math, your receipt template, and your tax-API integration must all gracefully render “Sales tax: $0.00” or hide the line entirely. The five NOMAD states are exactly that edge case.

Second, if you are integrating with a tax engine such as Avalara, TaxJar, or Stripe Tax, those services treat NOMAD-state destinations as a special path that returns a zero-tax response. Mocking that response correctly — while still requiring a valid ZIP-city- state triple — is a common QA scenario.

That is the niche the US Tax-Free State Address Generator exists for: a small, audit-friendly dataset of realistic-format addresses limited to these five states, with matching ZIP code and phone area code, so your fixtures stay internally consistent without you needing to hand-write them. It is not for fraud, identity claims, or evading a real tax obligation — it is for the next time a sprint task is “make sure Step 3 of checkout renders correctly when sales tax is zero.”

Sources & further reading

The tax-policy specifics in this article are summarized from official state and federal sources. For authoritative current numbers, consult these directly — rates and exceptions can change.

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