New Jersey has a sales tax of 6.625 percent on most purchases
New Jersey charges 6.625 percent sales tax on retail goods and most services. This is the statewide rate that applies everywhere in the state. Some counties and municipalities add local taxes on top of the state rate, which can raise your total to as high as 7.625 percent depending on where you shop.
The tax is collected by the seller at the point of sale and sent to the New Jersey Division of Taxation. You will see it added to your receipt when you check out. Unlike income tax, which varies by how much you earn, sales tax is the same percentage for everyone on the same purchase in the same location.
Key Takeaways
- New Jersey's base sales tax rate is 6.625 percent, but some counties add local tax that can bring the total to 7.625 percent.
- Groceries, prescription medications, and most clothing under $110 per item are not taxed in New Jersey.
- Services like haircuts, repairs, and restaurant meals are taxed, though some prepared foods have different rules.
- Online purchases from out-of-state sellers may not have sales tax added at checkout, but New Jersey residents are responsible for reporting and paying use tax on those purchases.
Where the 6.625 percent rate comes from
The state portion of New Jersey sales tax is 6.625 percent. This rate has been in place since 2006. Before that, the state rate was 6 percent, and it was raised to fund property tax relief programs.
On top of the state rate, some counties and municipalities charge an additional local sales tax. Bergen County, for example, adds 0.5 percent, making the total 7.125 percent. Hudson County adds 1 percent, bringing the total to 7.625 percent — the highest in the state. You can find your county's local rate by checking your receipt or contacting your county tax assessor's office.
What is not taxed in New Jersey
New Jersey exempts certain items from sales tax. The most common exemptions are groceries (food you cook at home), prescription medications, and most clothing and footwear under $110 per item. If a shirt costs $109.99, there is no tax. If it costs $110 or more, the full amount is taxed.
Other items without sales tax include newspapers, magazines, and most medical equipment. Diapers and feminine hygiene products are also exempt. However, prepared foods — anything you buy ready to eat, whether from a restaurant, deli counter, or bakery — are taxed at the full rate.
What is taxed: services and prepared foods
Services are taxed in New Jersey. A haircut, car repair, plumbing work, or appliance repair all have sales tax added. The tax applies to the labor and materials together. If you pay $100 for a repair, you pay $6.625 in state tax (plus any local tax) on top of that.
Restaurant meals and takeout food are taxed. A sandwich from a deli counter costs tax. A coffee from a café costs tax. But if you buy a loaf of bread, a package of deli meat, and cheese from the grocery store shelf, there is no tax — because you are buying ingredients to prepare at home, not a prepared meal.
Alcohol is taxed at the regular sales tax rate. Gasoline is also taxed, though the tax is included in the pump price you see displayed.
How online purchases and use tax work
When you buy something online from an out-of-state seller, the seller may not charge you New Jersey sales tax at checkout. However, New Jersey law requires you to pay use tax on that purchase. Use tax is the same rate as sales tax — 6.625 percent plus any local tax — and it is meant to level the playing field between local and online shopping.
In practice, most individual shoppers do not pay use tax on small purchases. You are supposed to report it on your state tax return, but enforcement for individual consumers is limited. However, if you run a business and make regular out-of-state purchases for resale or use, you should understand use tax rules and may need to register with the state.
Large online retailers like Amazon now collect and remit New Jersey sales tax on most purchases, so you will see the tax added at checkout. Smaller sellers may not, depending on their sales volume and nexus in the state.
How to find your exact local rate
Your total sales tax depends on your county and sometimes your municipality. The easiest way to find out what you pay is to look at a recent receipt from a local store. The tax amount will be shown separately.
You can also contact your county tax assessor's office or visit the New Jersey Division of Taxation website, which lists all county and municipal rates. Enter your zip code or municipality name, and you will see the combined state and local rate for your area.
Frequently Asked Questions
Do I pay sales tax on clothing in New Jersey?
Most clothing and footwear under $110 per item are not taxed. Items $110 or more are taxed on the full purchase price. This applies to individual pieces — a $120 coat is taxed, but a $100 shirt is not, even if you buy them together.
Is restaurant food taxed differently than grocery food?
Yes. Food you buy at a grocery store to cook at home is not taxed. Food you buy ready to eat — from a restaurant, deli counter, bakery, or café — is taxed at the full rate. A rotisserie chicken from the grocery store deli is taxed; a raw chicken from the meat counter is not.
What if I buy something online and no tax is charged?
You are responsible for paying use tax on out-of-state purchases where sales tax was not collected. The rate is the same as sales tax. Most people report this on their state tax return, though enforcement for individual consumers is limited. Large online retailers now collect the tax automatically.
Does New Jersey tax gasoline?
Yes, gasoline is subject to sales tax. The tax is included in the price displayed at the pump, so you do not see it added separately like you do at a register. The rate varies by county based on local tax rates.
Are prescription medications taxed?
No. Prescription medications are exempt from sales tax in New Jersey. Over-the-counter medications like pain relievers and cold medicine are also exempt. However, vitamins and supplements that are not FDA-approved drugs are taxed.