For small‑business owners and independent entrepreneurs, the prospect of avoiding a state sales tax can be a significant financial advantage. Five states—New Hampshire, Oregon, Montana, Alaska, and Delaware—do not impose a statewide sales tax, a fact that can simplify bookkeeping and reduce the cost of doing business.

Why the “NOMAD” states matter for local businesses

The acronym NOMAD (New Hampshire, Oregon, Montana, Alaska, Delaware) helps keep these tax‑friendly jurisdictions top of mind. While the absence of a sales tax removes one layer of compliance, each state still collects other taxes that affect profitability and cash flow.

Alaska: No state sales or income tax, but local levies apply

Alaska stands out for lacking both a statewide sales tax and a state income tax. However, many municipalities impose their own sales taxes, often seasonal to capture tourist spending. Business owners should verify local rates before setting up shop, especially in popular resort areas where taxes can rise sharply during peak months.

Delaware: No sales tax, but higher income and business taxes

Delaware’s reputation as a corporate haven stems from its favorable corporate law environment, yet the state compensates for the missing sales tax with income taxes and various business fees. Property taxes average about 0.43 % of assessed value, and additional municipal taxes may apply depending on the location.

Montana: No sales tax and low property taxes

Montana not only forgoes a sales tax but also lacks local sales taxes, making it attractive for retailers and service providers. Property taxes remain modest, averaging roughly 0.83 % of assessed value, which can further reduce overhead for businesses that own real estate.

New Hampshire: No sales tax, but a meals and rentals tax

New Hampshire does not levy a sales tax at any level, but it does impose an 8.5 % tax on meals, hotel stays, and vehicle rentals. Companies in the hospitality sector must factor this rate into pricing, while other businesses enjoy the simplicity of a sales‑tax‑free environment.

Oregon: No sales tax, but high income taxes and local options

Oregon eliminates sales tax entirely, but its income tax rates rank among the highest in the nation. Some municipalities also adopt local taxes on specific goods and services, such as food and beverage charges. Entrepreneurs should weigh the trade‑off between sales‑tax savings and higher personal or corporate income tax obligations.

Practical steps for compliance

Even in states without a sales tax, businesses must stay vigilant about other tax obligations. Using accounting software—such as Intuit QuickBooks, which powers this analysis—can automate tax calculations, track exemptions (medical supplies, non‑prepared food, clothing), and ensure timely filing to avoid penalties.

Bottom line for the local entrepreneur

Choosing a location in one of the NOMAD states can reduce the administrative burden of sales‑tax collection and lower overall tax costs. However, each state’s alternative tax structure—whether through income, property, or local levies—requires careful planning. Business owners should consult local tax authorities or a qualified accountant to understand the full fiscal picture before relocating or expanding.

Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.