NOMAD. To some, a drifter who wanders the countryside. To SALT professionals, the first mnemonic we learned during our onboarding after we could no longer resist the allure of a career choice in state taxation. The five states without a sales tax we proudly boast. We begin every sales taxability matrix by effortlessly entering in ‘NO SALES TAX’ for New Hampshire, Oregon, Montana, Alaska and Delaware (NOMAD), and just like that, the project is 10% complete. While it’s true that these states don’t have a state “sales” tax per se, they most definitely tax sales; they just call it something else. Let’s take a deeper look, shall we?
- Alaska – Our dear friends along the Bering Strait might be the lowest of the hanging fruit (or perhaps the easiest of the crab legs?) as over 100 local jurisdictions impose a good old-fashioned sales tax. It’s not even disguised as another tax. Alaska has even created a lovely remote seller’s sales tax commission to help you navigate the tricky rules of jurisdictions such as Anchorage, Juneau, and, let’s not forget, Ketchikan, just to name a few. But, still nothing at the state level so the “A” remains strong in NOMAD.
- Oregon – A recent trip to Portland (thanks for showing me around town, Sean Wallace) got me excited to submit my expense report sans sales tax. Saving the company some dough, I thought. However, my joy turned to dismay when I was presented with my hotel bill. Lodging tax! That’s a sales tax where I come from.
- Montana – I understand Glacier National Park is absolutely a sight to behold, but for us Midwesterners, a visit will require a flight (unless you’re Clark Griswold) and a rental car. Don’t worry; plenty of car rental places will get you where you need to go. There’s also a 4% tax on the car rental. (Spoiler alert! Montana also has a lodging tax)
- Delaware – Moving east now. The corporate organization haven of Delaware surely doesn’t tax any sales, right? You’re passing through Delaware on the family road trip to the beach, and you just can’t take the kids fighting in the back seat any longer, and you need to stop on that 9-mile stretch of Delaware to post up for the night? Get ready to pony up 8% in addition to the agreed-upon lodging rate for the evening. Delaware also authorizes an admissions tax for any municipality in excess of 50,000 residents, but to date, Wilmington has not enacted such a tax (they’re the only city that qualifies).
- New Hampshire – Our final shot at no tax on sales. Nothing says New Hampshire like a famous New England lobster roll (warm, of course) along the Atlantic Coast. As you dine on the buttery goodness and watch the waves crash on the shores of Salisbury Beach, you bask in the delight that there’s no sales tax included (maybe that’s just me, my wife truly is a lucky gal); you get a feeling in the pit of your stomach whilst staring at the receipt. Maybe it was just bad lobster. Not a chance; your bill included an 8.5% food and beverage tax. Darn, the luck! Sales taxed again.
I’m sure I missed a few other transactional taxes in these states, but hopefully, you get my point. Things might not always be as they seem on the tax front. When embarking on an adventure in a new state, be sure you understand all of the potential boutique taxes that could affect your particular industry. So just like My Very Eager Mother Just Served Us Nine Pizzas (sorry, Pluto), NOMAD is No Mo’, or it’s a technicality at the very least.
