New Jersey's current sales tax rate

New Jersey has a statewide sales tax of 6.625 percent. This rate applies to most retail purchases across the state. Unlike some states, New Jersey does not allow local jurisdictions to add their own sales tax on top of the state rate, so the tax you pay is the same whether you shop in Newark or Cape May.

The 6.625 percent rate has been in place since 2006. It is applied at the point of sale — the cashier adds it to your total before you pay. Online purchases shipped to New Jersey are also subject to this tax if the seller has a physical presence in the state or meets federal nexus thresholds.

Key Takeaways

  • New Jersey's sales tax rate is 6.625 percent statewide, with no additional local taxes added on top.
  • Groceries, prescription medications, and most clothing items under $110 are exempt from sales tax in New Jersey.
  • Prepared foods, restaurant meals, and takeout are taxed, but raw ingredients you cook at home are not.
  • The tax applies to most goods and services, including haircuts, repairs, and digital downloads.

What is and is not taxed in New Jersey

New Jersey exempts certain categories from the 6.625 percent tax. Groceries — unprepared food you buy to cook at home — are not taxed. This includes produce, meat, dairy, bread, and canned goods. The rule is straightforward: if you are buying raw ingredients to prepare yourself, there is no sales tax.

Prescription medications are also exempt. Over-the-counter drugs like aspirin or cold medicine are taxed, but anything requiring a prescription slip from a pharmacist is not. Clothing and footwear under $110 per item are exempt as well. A $100 shirt is tax-free; a $150 jacket is taxed on the full amount. Accessories like belts, hats, and gloves are taxed regardless of price.

The line between taxed and untaxed food can be confusing. Prepared foods are taxed — this includes restaurant meals, takeout, deli counter items, and hot foods from a grocery store. A rotisserie chicken from the supermarket is taxed. Raw chicken breasts are not. Coffee from a café is taxed; coffee beans you brew at home are not.

Services and other items that are taxed

Most services in New Jersey are subject to sales tax. Haircuts and salon services are taxed. Car repairs and maintenance are taxed. Dry cleaning is taxed. Plumbing, electrical work, and home repairs are taxed. If you pay someone to perform a service, the labor is almost always subject to the 6.625 percent rate.

Digital products and subscriptions are taxed in New Jersey. This includes streaming services, downloaded music, e-books, and software licenses. Gym memberships and personal training are taxed. Admission to movies, concerts, and sporting events is taxed. Rental cars are taxed, though the tax applies to the rental fee, not to fuel or insurance add-ons.

Utilities — electricity, gas, and water — are not subject to sales tax in New Jersey. However, if you purchase a service call to repair your heating system, that labor is taxed. The distinction is between the utility itself and the service to maintain it.

How the tax appears on your receipt

When you check out at a store, the cashier or register will show the subtotal, then add the 6.625 percent sales tax as a separate line item. For a $100 purchase of taxable goods, you would see $100.00 subtotal plus $6.63 in tax, for a total of $106.63. The tax is calculated on the subtotal before any coupons or discounts are applied.

If your purchase includes both taxed and untaxed items — say, groceries and a magazine — the register separates them. Groceries ring up tax-free; the magazine is taxed. You will see two different subtotals on your receipt, one taxed and one not.

Who collects and pays the tax

The retailer or service provider collects the sales tax from you at the point of sale. They then send that money to the New Jersey Division of Taxation, usually monthly or quarterly depending on the size of the business. As a customer, you do not file anything or send money directly to the state — the business handles the collection and payment.

If you are a business owner in New Jersey, you must register for a sales tax permit with the state and collect tax on taxable sales. Failure to collect or remit sales tax can result in penalties and interest. Businesses can deduct the cost of goods they purchase for resale, but they must have proper documentation.

Special situations and exemptions

Certain organizations are exempt from paying sales tax. Religious institutions, nonprofits, and government agencies may not pay sales tax on purchases made for their operations, but they must provide proof of their status. A church buying office supplies would not pay tax; an individual buying the same supplies would.

Resellers — businesses that buy goods to resell to customers — do not pay sales tax on their wholesale purchases if they provide a resale certificate. A clothing store does not pay tax when buying inventory from a distributor. When that store sells the clothing to you, you pay the tax.

Manufacturers and farmers have specific exemptions for equipment and materials used directly in production. A farmer buying seeds or equipment for farming may not pay tax. These exemptions are narrow and require documentation proving the purchase is for production use.

Frequently Asked Questions

Do I pay sales tax on online purchases from out-of-state sellers?

If the seller has no physical presence in New Jersey and does not meet federal sales tax thresholds, you may not see tax added at checkout. However, New Jersey residents are technically responsible for paying "use tax" on untaxed purchases — a parallel tax owed to the state. In practice, this is rarely enforced for individual purchases, but large retailers now collect tax on most online orders shipped to New Jersey.

Is clothing always tax-free in New Jersey?

Clothing and footwear under $110 per item are tax-free. Items priced at $110 or more are fully taxed. Accessories like belts, scarves, and hats are taxed regardless of price. Work uniforms and protective gear may have different rules depending on the type.

What counts as a grocery versus a prepared food?

Groceries are raw ingredients you take home to cook. Prepared foods are anything ready to eat or heated for you. A deli counter sandwich is taxed. Deli meat and bread you buy separately to make a sandwich at home are not. When in doubt, ask the cashier — they process these distinctions daily.

Do I pay sales tax on a car purchase in New Jersey?

No. Vehicle purchases are not subject to New Jersey sales tax. However, you do pay sales tax on car rentals, repairs, and parts. Registration and title fees are separate from sales tax.

Can I get a refund of sales tax I already paid?

Generally, no. Sales tax is final once you complete the purchase. If you return an item and receive a refund, the tax is refunded as part of that refund. You cannot claim back sales tax you paid in previous years on your personal tax return.