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Tax-Free States Guide

Maximize your e-commerce margins by using prep centers in states with no sales tax. Learn about the advantages and find prep centers in these strategic locations.

Why Tax-Free States Matter for E-commerce Sellers

Direct Cost Savings

Avoid paying sales tax on prep services, packaging materials, and storage fees.

Improved Margins

Higher profit margins mean more competitive pricing and better ROI on your inventory.

Simplified Accounting

Fewer tax complications and easier bookkeeping for your business operations.

Tax Savings Calculator

How the Math Works:

  • • Sales Tax Savings: 6% of $25 = $1.50 per unit
  • • Prep Center Cost: $1.00 per unit
  • • Net Savings per Unit: $0.50 per unit
  • • Additional Benefits: No shipping supplies, no time spent on prep work

Monthly Sales Tax

$1500

Without tax-free prep center

Monthly Prep Center Cost

$1000

Tax-free prep center fee

Monthly Net Savings

$500

After prep center costs

Annual Net Savings

$6000

Plus time savings and reduced shipping supply costs

Additional Benefits Not Calculated:

  • • Time Savings: No time spent on labeling, packaging, or quality checks
  • • Shipping Supplies: No need to purchase boxes, tape, labels, etc.
  • • Storage Space: No need for inventory storage at home
  • • Professional Quality: Consistent, professional prep work
  • • Scalability: Handle higher volumes without increasing personal workload

Tax-Free States Overview

Alaska
2 Prep Centers

No state sales tax, but local municipalities may impose sales taxes up to 7.5%.

Key Advantages:

  • No state income tax
  • Strategic location for West Coast shipping
  • Lower operational costs
Delaware
8 Prep Centers

No state or local sales tax, making it highly attractive for e-commerce businesses.

Key Advantages:

  • No sales tax at all
  • Business-friendly laws
  • Close to major East Coast markets
Montana
3 Prep Centers

No statewide sales tax, though some resort areas may have local option taxes.

Key Advantages:

  • No state sales tax
  • Low business registration costs
  • Central US location
New Hampshire
5 Prep Centers

No state sales tax and no state income tax on wages, very business-friendly.

Key Advantages:

  • No sales or income tax
  • Close to Boston markets
  • Low regulatory burden
Oregon
4 Prep Centers

No state sales tax, though there is a state income tax on businesses and individuals.

Key Advantages:

  • No sales tax
  • West Coast shipping advantages
  • Tech-friendly business environment

Ready to Start Saving?

Browse our directory of verified prep centers in tax-free states and start maximizing your e-commerce margins today.