10 States With the Lowest Sales Tax

Living in one of the lowest sales tax states doesn't always mean you'll pay less.

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Shopping in one of the states with the lowest sales tax rates can mean even more savings when you shop for holiday deals. However, how much you save depends on where in the state you shop and what you buy. That's because some localities impose sales tax rates of their own and items that are taxable in some states might not be taxable in others.

Lowest sales tax states in the U.S.

Keep in mind that localities (cities and counties) in some states can add sales tax separate from the statewide tax rate. So, rankings for states with the lowest sales tax are based on the average combined local and state tax rates. 

Note: The sales tax rates used in this story are based on midyear data from the Tax Foundation.. This list does not include the four reported states with no sales tax or average combined local taxes.

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Washington D.C. sales tax

Brown Colored Paper Shopping Bag Side View on Solid White Background

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State sales tax: 6%

Average local sales tax: 0.00%

Average combined sales tax: 6%

The District of Columbia makes this list, thanks to the lack of local sales taxes. Shoppers in D.C. will pay a 6% sales tax rate regardless of which part of the district they shop in.

Other good things to know about D.C. sales tax:

  • Groceries and prescription drugs are tax-exempt.
  • Some items in Washington D.C., such as restaurant meals and vehicle rentals are taxed at a rate higher than 6%.

9. Maryland sales tax

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State sales tax: 6%

Average local sales tax: 0%

Average combined sales tax: 6%

One nice thing about tax in Maryland is that you can travel anywhere in the state and not worry about paying a different sales tax rate. It’s 6% everywhere since counties and cities do not levy their own taxes. Your groceries and prescription drugs aren’t taxable, but you’ll need to pay the 6% tax on clothing and motor vehicle purchases.

Other good things to know about Maryland sales tax:

  •  Alcoholic beverages are taxed between $0.09 and $1.50 per gallon in Maryland.
  •  Vacationers could face higher sales taxes since short-term rental cars are taxed at 11.5%. 

8. Kentucky sales tax

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State sales tax: 6%

Average local sales tax: 0%

Average combined sales tax: 6%

With a 6% average combined sales tax rate, Kentucky sales tax ties with three other places on this list. You won’t need to pay any sales tax on groceries or prescription drugs. However, you will pay sales tax when you make motor vehicle and clothing purchases, but that is the case for most states in the US.

Other good things to know about Kentucky sales tax:

  •  Earlier this year, three new categories became subject to sales tax. These include jewlery repair, private investigating and even parking.  
  •  On the bright side, Kentucky income tax was slashed from 5% to 4.5% when the new taxable categories were added. 

7. Michigan sales tax

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State sales tax: 6%

Average local sales tax: 0%

Average combined sales tax: 6%

Michigan is another state with a 6% sales tax rate. The Michigan sales tax is lower for some home energy necessities, like electricity, natural gas, and home heating oil, which are taxed at 4% for residential customers.

Other good things to know about Michigan sales tax:

  • The statewide sales tax rate hasn't changed in nearly 30 years.
  • Groceries and prescription drugs are tax-exempt.
  • Clothing and motor vehicle purchases are taxable.

6. Virginia sales tax

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State sales tax: 5.3%

Average local sales tax: 0.467%

 Average combined sales tax: 5.767% 

Virginia repealed its portion of sales tax on groceries, but a 1% local grocery tax applies in most areas. Local sales tax on everything else can reach as high as 2.7% in some parts of the Commonwealth, meaning that some Virginians pay an 8% tax rate on fully taxable items.

Other good things to know about Virginia sales tax:

  • Personal hygiene products (including diapers) are taxable but at a reduced rate of 1%.
  • Prescriptions are tax-exempt.
  • There is no sales tax on over the counter medication.
  • You'll need to pay Virginia sales tax on clothing.

5. Maine sales tax

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State sales tax: 5.5%

Average local sales tax: 0%

Average combined tax: 5.5%

Grocery staples are tax exempt in Maine, but the state doesn’t include some healthy snacks like seeds or dried fruit as staples, so you’ll need to pay Maine sales tax on those. And even though Maine doesn't impose sales tax on most fruits, there is a tax on wild blueberries. Wild blueberries processed in the state come with a tax rate of 1 ½ cents per pound.

Other good things to know about Maine sales tax: 

  • Motor vehicle and clothing purchases are taxable.
  • Prepared food is taxed at an 8% rate.
  • There is a 10% tax on short-term rental vehicles.
  • Prescription medications are tax-exempt.

4. Wisconsin sales tax

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State sales tax: 5%

Average local sales tax: 0.429%

Average combined sales tax: 5.429%

The sales tax rate in some parts of Wisconsin will soon increase due to two new Milwaukee sales tax increases. But prescription drugs are tax exempt statewide. You won’t need to pay Wisconsin sales tax on groceries, either. 

Other good things to know about Wisconsin sales tax:

  • The state put an end to sales tax on groceries 17 years ago. 
  • Wisconsin hasn’t repealed its tax on motor vehicles or clothing though, so you’ll still pay state and local tax on these purchases.

3. Wyoming sales tax

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State sales tax: 4%

Average local sales tax: 1.441%

Average combined sales taxes: 5.441%

Sales tax in Wyoming was first adopted in nearly 90 years ago as a temporary measure, but it became permanent just a few years later. It’s now at 4%, but cities and counties can set tax rates of up to 2%. 

Other good things to know about Wyoming sales tax: 

  • Groceries and prescriptions are tax exempt.
  • Clothing is taxable.
  • Motor vehicles are taxable.
  •  If a tax jurisdiction imposes a 2% tax rate, 1% must be used for an allocated project, such as construction or other improvements. 

2. Hawaii sales tax

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State sales tax: 4%

Average local sales tax: 0.443

Average combined sales tax: 4.443%

Hawaii has a complex sales tax system with many different levels (county, city, transportation and special purpose districts). Sales tax in Hawaii is passed on to consumers in the final price of products. Businesses often charge a 4.712% rate, even though the tax is 4.5% in most areas. This ensures they don’t lose money since the tax is based on their gross receipts. There is some more disappointing news. You’ll need to pay tax on groceries, which already cost more than the national average.

Other good things to know about Hawaii:

  •  Prescription drugs are not taxable. 
  • You still need to pay tax on over the counter medications.
  • Clothing and motor vehicle purchases are taxable.

1. Alaska sales tax

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State sales tax: 0%

Average local sales tax: 1.813%

Average combined sales tax: 1.813%

There is currently no state sales tax in Alaska. However, localities in the state can impose their own sales taxes, and the average local sales tax rate in Alaska has increased from 1.76% to 1.83% over the last six months.

Other good things to know about Alaska sales tax:

  • Juneau has a 5% sales tax rate, which is higher than the average for Hawaii.
  • There is no longer a maximum local sales tax, meaning jurisdictions can charge any amount they’d like (as long as it is approved by a majority vote).

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Katelyn Washington
Tax Writer

Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.