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GOBankingRates

Rebekah Evans

I Asked ChatGPT To Find the Best Places To Retire With Zero Sales Tax

ChatGPT Sales Tax Zillow Income Tax Delaware Montana

Forty-five states have sales tax, which means five do not — good news if you’re looking to cut down on how much you pay in taxes once you retire.

Find Out: 5 Clever Ways Retirees Are Earning Up To $1K Per Month From Home

But just because these states have zero sales tax doesn’t mean they’re all created equal in terms of other taxation. You may still have state income tax and property taxes to contend with.

GOBankingRates asked ChatGPT to find the top places to retire with absolutely no sales tax. Here’s what it said — and what other factors you should consider before making the move.

States With No Sales Tax

The five states that don’t have sales tax are:

Delaware — no state or local sales tax
New Hampshire — no general sales tax
Oregon — no general sales or use/transaction tax (but there is a vehicle tax)
Alaska — no state sales tax (but some local municipalities levy a sales tax)
Montana — no general-use sales tax

According to ChatGPT, these are the top reasons why these states stand out — besides the lack of statewide sales tax — and what to watch.

Discover Next: The Most Common Retirement Mistake, According to an Expert

Delaware

Property taxes in Delaware are relatively low compared to other states, with an effective property tax rate of 0.55%. Another positive, as per the AI tool, is its close proximity to many major cities, airports and coastal living.

But Delaware still has a state income tax ranging from 2.2% to 5.55% for incomes under $60,000. Higher incomes are subject to a 6.60% tax rate, as per the state’s official website. Social Security isn’t taxable, however.

ChatGPT also pointed out that the cost of living can be high, especially near the coast or in Wilmington. Zillow estimates a $398,430 average home value in Delaware (up 2.2% in one year).

New Hampshire

Unlike Delaware, New Hampshire doesn’t have a broad income tax on personal (W-2) wages. Earnings from interest and dividends may be taxable.

Another positive for New Hampshire, according to the AI tool, is that it has a beautiful environment with plenty to do for retirees. But watch out for cold, long winters.

As per the Tax Foundation, other taxes to consider include:

The state has a 3% flat-rate income tax (on interest and dividends).
The effective property tax rate is 1.61%.

Zillow estimates the average home value in the state is $496,656 (up 2.5% over the year).

Oregon

Oregon is well-known for having no statewide sales tax. But it does have a high state income tax that ranges from 4.75% to 9.90%. This income tax, according to the state’s official website, applies to all income sources.

ChatGPT suggested Oregon for its “many outdoor and cultural amenities.” But it did caution against the potentially high cost of living and other taxes.

Zillow’s estimate puts the average Oregon home value at $493,884.

Alaska

Some parts of Alaska don’t charge any kind of sales tax, but it depends on the municipality. There’s also no statewide income tax, which is a plus for many retirees. Combined with the state’s natural beauty and opportunities for adventure, it’s a standout choice.

But watch out for the overall high cost of living. Home values sit at around $378,640, as per Zillow, which isn’t too high compared to other parts of the country. But the effective property tax rate is 1.07%.

According to the Missouri Economic Research and Information Center, Alaska is also one of the most expensive places to live in the country — just behind Hawaii, California, Massachusetts, D.C. and New York.

ChatGPT also advised retirees to consider how remote many Alaskan communities are, which can limit access to airports and medical centers.

Montana

The final place ChatGPT suggested was Montana. Not only does it have no statewide sales tax, but it’s ideal for retirees seeking a quieter, more rural lifestyle.

However, according to the AI tool, there are a few drawbacks. These include local taxes and resort area taxes in some parts of the state. Some areas may also have limited access to healthcare or amenities.

Montana’s property tax rate is just 0.76% for homes valued up to $400,000, according to the state’s official site. Since Zillow puts the average home value at $457,278, expect higher property taxes.

Last but not least, Montana does have a personal income tax ranging from 4.7% to 5.9%. This also applies to some forms of retirement income.