States Without Sales Tax & How They Fund Their Government

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Most states lean heavily on sales tax to fund their government operations, but a select few take a different approach. These states have earned the nickname “NOMAD” because they do not collect state-level sales tax. Their tax models raise important considerations for transportation companies, especially those managing multistate operations. 


Understanding how these states operate offers insight into alternative revenue strategies and may influence decisions about business location, compliance, and tax planning.

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What Are NOMAD States?

NOMAD refers to five U.S. states that do not collect a state-level sales tax: New Hampshire, Oregon, Montana, Alaska, and Delaware. Each of these states has adopted a tax structure that avoids the standard model used in most of the country. While the majority of states heavily depend on sales tax to support their budgets, NOMAD states fund their governments through other sources.


For transportation companies, these states represent a different set of rules and potential advantages. Without a state-level sales tax in play, indirect costs on certain purchases may be lower. This can impact pricing, procurement strategies, and multistate compliance efforts.


It’s important to note that while these states do not collect state sales tax, some may still impose local taxes or targeted fees. Understanding how each state operates individually is necessary for companies evaluating expansion, acquisition, or logistics planning across state lines.

The Sales Tax Trade-Off: How NOMAD States Fund Their Governments

Each NOMAD state replaces traditional state-level sales tax with alternative sources. These include income taxes, business taxes, excise taxes, and fees tied to property or industry. Though the methods vary, each state supports its operations without relying on general retail sales.

  • New Hampshire

    New Hampshire collects revenue through business profits taxes, interest and dividends taxes, and real estate transfer taxes. Local property taxes carry much of the weight, especially for funding schools and infrastructure.

  • Oregon

    Oregon relies on personal income taxes and corporate excise taxes. It also applies fuel and tobacco taxes to support transportation and health programs. Higher income tax rates offset the lack of sales tax.

  • Montana

    Montana uses individual and corporate income taxes, along with fuel and tobacco excise taxes. Local property taxes help fund education and local services. While there’s no state sales tax, some lodging and rental taxes apply.

  • Alaska

    Alaska depends on oil and gas royalties, severance taxes, and investment earnings. There’s no state sales or income tax. Some municipalities charge sales tax, but rates and rules vary by location.

  • Delaware

    Delaware raises revenue through corporate franchise taxes, gross receipts taxes, and business license fees. Its status as a preferred business registration state adds to its income, replacing the need for a general sales tax.

Implications for Transportation Companies

Transportation companies operating in NOMAD states may benefit from reduced indirect tax costs on purchases like fleet equipment, parts, and maintenance services. The lack of state-level sales tax can lower upfront expenses, depending on how transactions are structured and where they take place.


In Alaska, local jurisdictions have the authority to impose sales taxes. These rates and rules differ by location, so companies must track local requirements to avoid missteps. In Delaware, the absence of a retail sales tax is offset by a gross receipts tax that applies to many business activities, which can increase compliance needs.


Montana, Oregon, and New Hampshire do not impose state or local sales taxes, which can simplify purchasing decisions. For transportation companies that manage assets across multiple states, sourcing goods or services through these locations may lead to cost savings.



Still, the overall impact depends on the company's footprint, the nature of its transactions, and its existing compliance structure. A careful review of tax obligations in each state is key to identifying opportunities and avoiding overlooked liabilities.

Sales Tax Planning Beyond NOMAD States

While states with no sales tax may seem appealing, most transportation companies still operate across multiple jurisdictions that do collect it. Managing sales tax exposure in these states requires careful planning, especially when dealing with parts, equipment, and interstate services. Purchases made outside of NOMAD states may trigger use tax liabilities, depending on where the item is stored or used.

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Nexus rules can also create tax obligations in unexpected places. Even if a company is based in a NOMAD state, having drivers, terminals, or inventory in other states may require sales tax compliance elsewhere. Each state's thresholds and enforcement practices differ, adding complexity to routine business operations.


Sales tax planning involves more than checking tax rates. It includes reviewing exemption certificates, understanding sourcing rules, and confirming how specific items are taxed across jurisdictions. For companies without in-house tax departments, this can quickly become difficult to manage.

Staying ahead of these rules helps avoid penalties, protect margins, and streamline multistate operations. Strong sales tax consulting support can give companies a clearer picture and a more effective strategy.

How Transportation Tax Consulting Supports You

Transportation Tax Consulting helps companies navigate the complexity of multistate sales tax regulations. For those operating in or around NOMAD states, we evaluate purchasing strategies, tax exposure, and local regulations to identify cost-saving opportunities and reduce risk. Our experience across trucking, rail, aviation, and maritime sectors allows us to provide insights tailored to your business model and operational footprint.


We assist in determining where obligations exist, which exemptions apply, and how to document transactions properly. For companies expanding into new states or restructuring operations, we offer planning strategies that align tax compliance with long-term goals. This includes helping clients understand local sales tax ordinances in places like Alaska and gross receipts taxes in Delaware.


Many transportation companies do not have a dedicated tax department. Our role is to fill that gap by offering specialized expertise and practical solutions. Through detailed analysis and industry-specific knowledge, we help reduce indirect tax costs, support compliance, and recover missed sales tax refunds when applicable.

Key Takeaways

NOMAD states include New Hampshire, Oregon, Montana, Alaska, and Delaware. These states do not collect state-level sales tax and instead raise revenue through income taxes, business fees, or resource-based income. For transportation companies, this can lower indirect tax costs on certain purchases.


Some local taxes and other obligations still apply. Alaska allows municipalities to charge sales tax, and Delaware imposes a gross receipts tax that applies to many business activities. These rules can affect pricing, margins, and compliance requirements.


Transportation Tax Consulting helps your business navigate these complexities with precision and industry-specific insight. Contact us today to schedule a consultation and take the next step toward reducing your sales tax burden.

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Truck Tariffs Take Effect November 1: What Every Transportation Company Must Know Now

By Matthew Bowles • October 8, 2025
Beginning Nov. 1, 2025 , the U.S. will impose a 25% tariff on imported medium- and heavy-duty trucks (Classes 3 through 8), according to a recent announcement by the Trump administration. While this move is intended to protect domestic manufacturers, it carries broad implications for transportation companies, fleets, lessors, brokers, and the broader supply chain. This article breaks down what’s changing, who is most exposed, and how transportation businesses can prepare. What the Tariff Covers — and What It Doesn’t (Yet) Scope The announced tariff applies to imported medium- and heavy-duty trucks (Classes 3–8). The tariff was originally scheduled to take effect on Oct. 1 but was delayed to Nov. 1 . Crucially, it remains unclear whether USMCA-compliant imports (i.e. trucks built in Mexico or Canada meeting local content thresholds) will be exempt. Also unresolved is the treatment of truck parts and components . Some commentators expect parts could be included or indirectly impacted via associated metal or materials tariffs. Interaction With Other Tariffs Truck manufacturing already depends heavily on steel, aluminum, and other tariff-sensitive materials. Many parts are made of or incorporate materials under existing tariffs. Some industry observers caution that “stacking” of tariffs (i.e. applying multiple tariffs to a single item) may push costs even higher. Because of cross-border supply chains, components may pass through multiple countries before final assembly — complicating cost pass-through analysis. Why It Matters to Transportation Companies 1. Higher Acquisition Cost for Trucks If you purchase imported trucks or rely on import channels, expect tariff-driven price inflation . Some estimates suggest that a 25% import tariff combined with a 12% federal excise tax (FET) could raise the cost of a Class 8 tractor significantly — from around $170,000 to as much as $200,000+ or even $224,000 in some scenarios. That level of cost escalation could delay or reduce new-vehicle purchases , force longer holding of older equipment, or shift demand to domestic OEMs. 2. Shifts in OEM Competitive Landscape Companies with strong U.S. manufacturing footprints (e.g., Freightliner, Peterbilt, Kenworth, Mack) could benefit from reduced import competition. However, parts and components cost pressures still apply even to U.S.-built units, and supply chain disruptions may ripple into pricing and lead times. 3. Impact on Fleet Renewal Cycles & Used Truck Market With new trucks getting more expensive, many fleets may extend equipment cycles or turn toward the used truck market . That could increase competition and demand (and pricing) in the used segment. 4. Operating Cost Pressures Even if your fleet does not directly import trucks, cost inflation may arise through: Replacement parts (if imported or made with tariff-impacted inputs) Delays or shortages in parts, increasing downtime Upstream supplier renegotiations or passing through additional material costs Fleets may need to increase parts inventory buffers or reconsider sourcing strategies. 5. Rate Pressure and Revenue Pass-Through Dilemmas Transportation companies operate in a highly competitive, low-margin environment. Many carriers will find it difficult to pass on increased capital or operating costs fully to shippers. Some may attempt fuel or equipment surcharges or renegotiate contracts, but success will vary depending on segments (e.g. contract vs spot). 6. Strategic & Logistical Impacts Carriers may rush orders before Nov. 1 to avoid tariffs, accelerating shipments and putting strain on production capacity in the short run. Supply chain bottlenecks (ports, customs, inland transport) may get worse as shippers pull forward demand. Firms might reexamine cross-border sourcing, localization strategies, or vehicle sourcing from exempt jurisdictions. Who Is Most Exposed Smaller fleets & independents that lack negotiating leverage or diversified sourcing channels Import-reliant fleets that historically imported trucks or relied on cross-border purchases Leasing firms and used-truck wholesalers exposed to acquisition price volatility Brokers and 3PLs that manage fleets or equipment leasing Maintenance-heavy operations (e.g. regional/dedicated fleets) reliant on imported parts Key Questions Every Transportation Executive Should Ask Are any of your fleets or upcoming purchases slated to be imported trucks or sourced via foreign manufacturers? If yes, quantify exposure (number of units, expected price delta). Do your trucks/components meet USMCA/local content thresholds? If exemptions apply, ensure compliance documentation is robust. Can you accelerate orders to beat the Nov. 1 cutoff? But be cautious not to over-order and risk excess inventory. Can you negotiate with OEMs or brokers to share tariff burdens? Consider cost-sharing, incremental payments, or delayed delivery windows. Should you increase parts inventories or diversify suppliers? Identify critical components vulnerable to tariffs or supply chain disruption. Can you pass through costs via surcharges or rate adjustments? Evaluate contract flexibility and customer tolerance in your markets. Is it time to reassess fleet renewal timing? Analyze ROI under new tariffs — perhaps hold older equipment a little longer. Are there legal or regulatory challenges under consideration? Some trade groups may contest the tariff’s legality (especially vis-à-vis USMCA). Tactical Moves to Mitigate Tariff Impact Below are steps transportation companies can take now to adapt: A. Portfolio & Purchase Strategy Frontload orders where possible (without creating capacity or cash flow issues) Shift to domestic OEMs (if price and performance align) Revisit trade agreements — be sure you maintain documentation proving USMCA compliance if claiming exemption Lease rather than buy — may reduce exposure if leases cover depreciation rather than full capital cost B. Supply Chain Strategy Audit parts and material sourcing to identify high-risk imported components Broaden supplier base to include more domestic sources or near-shoring Stock-up selectively on long-lead or critical parts before tariffs bite Negotiate flexibility with suppliers to share cost burdens C. Financial Planning & Cost Control Model “tariff-on” cost scenarios to stress-test budgets Raise capital lines or liquidity now in case of cash flow pinch Use hedging or price escalators in procurement contracts Tighten maintenance scheduling to reduce wear, defer noncritical work D. Pricing & Contract Management Introduce or revise equipment surcharges for new or renewal contracts Incorporate tariff-adjustment clauses in customer contracts where feasible Segment customers by cost sensitivity and ability to absorb increases Negotiate shared increments in long-term agreements E. Communication & Stakeholder Engagement Inform customers/shippers early about expected cost impacts Collaborate with industry groups (e.g. ATA) to influence policy or seek clarifications Monitor litigation or rulemaking that may affect tariff enforcement Potential Risks & Unknowns USMCA exemptions : The administration may allow exemptions for qualifying trucks built in Mexico/Canada. Whether those exceptions hold or are overridden is uncertain. Part-level exemptions or carve-outs : Some parts or components may be exempt or treated differently, especially if classified under separate HTS codes. Duration of tariff regime : It’s not yet clear how long these tariffs will remain in force — months? years? Legal challenges : Trade groups or trading partners may challenge the tariff’s compliance with trade treaties or domestic law. Macroeconomic feedback : Higher costs could reduce demand for freight, further pressuring rates and utilization. Conclusion The Nov. 1, 2025 tariff on imported medium- and heavy-duty trucks marks a significant shift in U.S. industrial and trade policy, with potentially profound implications for the transportation sector. While designed to protect domestic manufacturers, these tariffs will ripple across the supply chain, affecting acquisition costs, parts pricing, fleet renewal strategies, and competitive dynamics. For transportation companies, the window is now to stress-test assumptions, renegotiate supply contracts, accelerate or delay orders strategically, and clearly communicate with customers . Those who plan proactively may be able to soften the blow — while those who wait until the tariff hits could find their margins squeezed severely.