All 5 states
States with No Sales Tax on Cars
Only five US states charge no state sales tax on vehicle purchases. Buying a $35,000 car in any of these states saves $2,000–$3,000 vs the US average — though some of them have alternative fees that recapture a portion of that.
- 1
- 2
- 3
- 4
Oregon
Sales-tax-equivalent rate: 0.50%Vehicle Privilege Tax (dealer) / Use Tax (out-of-state) applies in place of sales tax
- 5
What this means
These five states don't charge sales tax — but some replace it with alternative fees: Delaware's 5.25% document fee (effectively a sales tax under another name) and Oregon's 0.5% vehicle privilege tax on dealer sales. Alaska, Montana, and New Hampshire are the only true "no tax on vehicles" states. Add this to Montana's no-state-sales-tax-anywhere status and it becomes the most car-purchase-friendly state in the US tax-wise.
Frequently asked questions
Is it legal to register my car in a no-tax state to avoid tax?
Only if you actually live there. States have strict rules requiring registration in your state of legal residence, and most also have "use tax" provisions that recover the unpaid sales tax when you bring an out-of-state-purchased car home. Schemes involving Montana LLCs to register expensive vehicles in MT have triggered enforcement actions in several states.
Do these states make up for it with higher registration fees?
Some do: Oregon has notably high registration fees ($316 for 2 years on a typical car, more for EVs). Montana has age-tiered flat fees ($217/year for new cars). Alaska and New Hampshire actually have low fees across the board. Delaware uses its 5.25% document fee to recapture what other states get through sales tax.