How to Avoid Sales Tax
No Sales Tax on Purchases

In this article, you will learn how to avoid Sales Tax in many of your purchases, and how doing so can save you a lot of money over time. You will learn how to determine if a site will charge you Sales Tax; which States have no Sales Tax; and about the annual Sales Tax Holiday.

Many of you truly enjoy the ritual of getting out of the house and pounding the pavement to do much of your shopping. It allows you to actually touch the items, spend time with family and friends, interact with other people, try on clothing and shoes, ask questions of Sales persons, etc. There are many great things about in-store shopping, but there are downsides too. The biggest downside is that in many cases, you are paying more than people that purchase that same item online. Especially if you know how to combine strategies to save (which I teach you on this site).

How to Avoid Sales Tax
No Sales Tax on Purchases

Shopping Online to Pay No Tax

Shopping online often offers many advantages over in-store purchases. In addition to being a major time saver, one of the benefits of shopping online is the chance to avoid paying Sales Tax on your purchases. Here's how: If you shop from an online store/vendor that is not located in your State and/or does not have a Shipping/Distribution warehouse or location in your State, then you will not have to pay Sales Tax. For example: if you live in Florida, and you purchase from an online store that is not physically located, and does not ship from Florida, then you will not pay Sales Tax on that purchase. And, it's easy to find out where the online store is located prior to purchase. Most times, their address is shown at the bottom of every page of their site, on their Contact Us Page, or on their About Us page.

States With No Sales Tax

There are a few States that do not charge Sales Tax. Even though they may not charge Sales Tax on consumer products or services, some of these States still charge Sales Tax on things like: Tourist Services, including: Travel/Vacation, Lodging, Restaurant Meals, Car Rentals, etc. If you're in one of these States, you can research to see what is exempt from Sales Taxes.

  • Alaska
  • Delaware
  • Montana
  • New Hampshire
  • Oregon

Sales Tax Holiday

Once per year, many States offer a Sales Tax Holiday. This is a great time to shop in-store or online, because you will not pay Sales Tax on certain items during these Holidays. The most common items that are tax-exempt include: clothing, footwear and school supplies; but many States also include computers, computer equipment and energy star products. Visit the FTA page to see when and if your State participates in the annual Sales Tax Holiday, along with details about the types of items that can be purchased.

How Much You Can Save

When you avoid paying Sales Tax, you can think of it as if you had a coupon for that purchase. For example: if your purchase totaled $75.00 and you would have normally paid 7% Sales Tax, then you just saved $5.25 on that one purchase alone! That's $5.25 that you kept in your pocket or bank account! Do this with most purchases and imagine how much money you will save!

This money could truly add up, because most of us are paying from 4 to 9 percent for Sales Tax.

For Example: If your State Sales Tax is 7%:

If you spend $100/month on taxable items,
you're paying $7/month or $84/year

If you spend $200/month on taxable items,
you're paying $14/month or $168/year

If you spend $300/month on taxable items,
you're paying $21/month or $252/year

If you spend $400/month on taxable items,
you're paying $28/month or $336/year

If you spend $500/month on taxable items,
you're paying $35/month or $420/year

Other Ways to Save

If you thought that not paying Sales Tax is the only way that you can save on a purchase, then you should keep reading. You can usually find 2 to 4 ways to save on any given purchase. You're a Discount Fanatic, and what do Discount Fanatics do before each purchase? We think before we spend. We take a moment and ask ourselves, "Which methods can we combine to save the most on this purchase?"

Still don't want to give up the in-store shopping experience? There are still many ways to save in-store, although you will pay the Sales Tax. See the list below (in the brown box).

Here are examples of just some of the ways to save with in-store shopping:

  1. Do your window shopping and browsing at the store. Take photos of what you want to purchase, or jot down the details about the item (manufacturer, model number, color, price); then go home, get online and purchase the item online for less.
  2. Take discount coupons that you've cut out of the newspaper or received in the mail.
  3. Use apps that will provide instant coupons that you can show to the Cashier to save on a purchase. See our list of money saving apps here.
  4. Go to the Customer Service desk and ask if they offer "Price Matching." Then ask if they'll price-match online stores/vendors, and ask them which ones. Then use your smartphone or device and find the items for less online, and have the store Price Match the online store/vendor.

Save Money on Each Transaction
(by using one or more of these techniques)

Combine as many of these strategies as possible on one transaction and you'll save even more!

If you look at the list shown above, none of them are your actual cash or money. You are saving money by simply handing or giving someone a piece of paper, a number or code, a plastic or paper card, or you're bargaining with knowledge that you've learned. For the most part, frugal living and saving money costs you nothing but time and knowledge! And trust me, for the savings, it's so... worth it!

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