Taxes
United States — Tax: Vat
The United States has no federal VAT; sales tax is levied by states and localities, and five states levy no general sales tax.
VerifiedGovernment / official sourceUS Census Bureau / GAO — state sales taxLast reviewed: 2026-10-23
Why this matters
Relocating individuals and businesses should be aware of the sales taxes in the states where they will operate, as these can add up to a significant portion of their expenses.
Key facts
- Sales tax is a state and local tax; the sources reviewed describe state-level general sales taxes and no federal VAT.
- Five states levy no general sales and gross receipts tax: Alaska, Delaware, Montana, New Hampshire and Oregon.
- Alaska has local sales taxes despite no statewide tax, and Montana lets certain resort communities impose a resort tax.
- States receive about one-third of their tax collections from general sales taxes (Census and GAO figures from about 2012-2018).
- Rates and the taxable base vary by state; the IRS publishes a state sales tax table used for the federal deduction.
Steps
- Understanding the State Sales Tax System — Research the sales tax rates and exemptions in the states where you will be operating. Note that some states may exempt certain types of transactions, such as groceries or prescription medications, from sales tax.
Common mistakes
- Expecting a single national rate: sales tax differs by state, county and city.