New Jersey's current sales tax rate
New Jersey has a 6.625% sales tax on most goods and services. This rate applies statewide and does not vary by county or municipality — you pay the same percentage whether you shop in Newark or Cape May.
The 6.625% rate has been in place since 2006. It is made up of a 4% state tax plus a 2.625% tax that goes to the state's transportation fund. When you see a price tag in a New Jersey store, the final amount you pay at checkout will be higher by this percentage, unless the item is exempt.
Key Takeaways
- New Jersey's sales tax is 6.625% on most purchases, and this rate is the same everywhere in the state.
- Groceries, prescription medications, and most clothing under $110 per item are not subject to sales tax.
- Restaurant meals, prepared foods, and non-prescription drugs are taxed at the full 6.625% rate.
- Services like haircuts, repairs, and professional fees are generally not taxed, but labor charges bundled with taxable goods sometimes are.
What is and is not taxed in New Jersey
Food you buy at a grocery store to cook at home is not taxed. This includes bread, milk, vegetables, meat, frozen foods, and canned goods. However, food prepared for immediate consumption — a sandwich from a deli counter, a rotisserie chicken, or anything you eat in a restaurant — is taxed at 6.625%.
Clothing and footwear under $110 per item are exempt from tax. A $100 pair of shoes is not taxed; a $150 pair is. This threshold applies to each individual item, not your total purchase. Accessories like hats, belts, and gloves are also exempt if under $110.
Prescription medications are not taxed. Over-the-counter drugs — cold medicine, pain relievers, vitamins — are taxed. Medical equipment like crutches or wheelchairs is generally not taxed if prescribed by a doctor, but the rules depend on the specific item and how it is classified.
Services are usually not taxed. A haircut, car repair, plumbing work, or dental cleaning does not have sales tax added. However, if a service includes a taxable product — a salon that sells you shampoo along with a haircut — the shampoo is taxed but the labor is not.
Items that always have sales tax
Prepared foods and restaurant meals are always taxed, whether you eat there or take it home. This includes pizza, coffee from a café, deli sandwiches, and food from a food truck. Alcohol — beer, wine, and liquor — is taxed at 6.625%, plus an additional excise tax that varies by type.
Gasoline is taxed at 6.625%, though New Jersey also adds a per-gallon excise tax on top. Cigarettes and vaping products are taxed at the standard rate plus a separate excise tax. Household items like soap, paper towels, and cleaning supplies are taxed. Electronics, appliances, and furniture are taxed unless they fall under a specific exemption.
How sales tax works when you buy online
If you order from an out-of-state retailer and have it shipped to New Jersey, you may or may not see sales tax charged at checkout. Large retailers like Amazon collect New Jersey sales tax on most items. Smaller sellers sometimes do not, though New Jersey law requires you to pay tax on those purchases anyway — in practice, most people do not.
If you buy from a New Jersey retailer online, sales tax is added to your order. Digital goods — e-books, streaming subscriptions, downloaded software — are generally not taxed in New Jersey, though this rule has exceptions and is still evolving.
Sales tax on services and labor
Labor and professional services are not taxed in New Jersey. You do not pay sales tax on an electrician's time, a lawyer's consultation, or a mechanic's labor. However, parts and materials used in that service are taxed. If a plumber fixes your sink, the labor is not taxed, but the new pipe or valve they install is.
This distinction matters when you get an invoice. A contractor might charge you $500 for labor and $200 for materials. The $200 in materials will have tax added; the $500 in labor will not. Some contractors bundle these on one line, which can make it unclear what portion is taxable.
Resale certificates and tax-exempt purchases
If you are a business buying goods to resell, you can provide a resale certificate to avoid paying sales tax on your purchase. You will pay tax only when your customer buys the final product. Nonprofits and government agencies can also obtain exemption certificates for certain purchases, though the rules vary by organization type.
To get a resale certificate, you register with the New Jersey Division of Taxation. The process is done online through the state's tax portal. Once approved, you receive a certificate number that you provide to suppliers instead of paying tax at the register.
Frequently Asked Questions
Do I pay sales tax on groceries?
No, not on food you buy at a grocery store to cook at home. This includes produce, meat, dairy, bread, and canned goods. However, prepared foods — rotisserie chicken, deli sandwiches, hot pizza — are taxed at 6.625%.
Is clothing always tax-free in New Jersey?
Clothing and shoes under $110 per item are tax-free. Items $110 or more are taxed. The threshold applies to each individual piece, so you could buy five $100 shirts tax-free, but a $150 coat would be taxed.
What about prescription versus over-the-counter drugs?
Prescription medications are not taxed. Over-the-counter drugs like cold medicine, pain relievers, and vitamins are taxed at 6.625%. The difference is whether a doctor wrote a prescription for it.
Do I pay sales tax on a haircut or repair service?
No, labor and services are not taxed. A haircut, car repair, or plumbing service has no sales tax. However, if the service includes a product — like shampoo sold at a salon — the product is taxed but the labor is not.
What happens if I buy something online from out of state?
Large retailers collect New Jersey sales tax on orders shipped here. Smaller sellers may not, though you are technically required to pay tax on those purchases. Most online purchases from major retailers will show tax at checkout.