5 States Slash Grocery Taxes

Five US states do not charge a statewide sales tax, which can be a significant advantage for retirees looking to save on everyday essentials. These states are Alaska, Delaware, Montana, New Hampshire, and Oregon. However, it's essential to note that only Oregon and Delaware levy no state or local sales tax whatsoever on consumers.

In Alaska, local governments are allowed to levy their own taxes, with rates averaging 1.82% and climbing as high as 7.85%. Montana, on the other hand, has no statewide or local sales tax, but certain designated resort communities charge a local resort tax of up to 3% on lodging, food, alcohol, and other tourist-oriented goods and services.

New Hampshire exempts all retail purchases but applies an 8.5% tax on restaurant meals, room rentals, and motor vehicle rentals. Other states, such as Idaho and South Dakota, tax groceries at rates of 6% and 4.2%, respectively. South Dakota's rate is set to revert to 4.5% in July 2027.

## Why it matters Sales tax can have a significant impact on a retiree's day-to-day finances, especially for those living on Social Security, pensions, and investment withdrawals. When planning their retirement, individuals should consider sales tax, along with other taxes such as income, property, and estate taxes, to ensure they make an informed decision about where to live.

Retirees weighing a move should compare the overall tax landscape of different states, rather than focusing on a single tax advantage. By doing so, they can make a more informed decision about where to live and potentially save on everyday essentials like groceries and other necessities.