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 of tangible goods — things you can touch and take home. The rate is the same across all counties and municipalities; New Jersey does not allow local sales tax additions on top of the state rate.
The 6.625 percent figure has been in place since 2006. It replaced a lower rate that had been in effect for several years. When you buy something at a store, the tax shown on your receipt is calculated at this rate unless the item itself is exempt from sales tax.
Key Takeaways
- New Jersey's sales tax rate is 6.625 percent statewide, with no local additions allowed.
- Groceries, prescription medications, and most medical equipment are exempt from sales tax.
- Clothing and footwear under $110 per item are tax-free; items over that threshold are taxed in full.
- Services like haircuts, repairs, and labor are generally not subject to sales tax unless they involve tangible goods.
- Online purchases from out-of-state sellers may or may not have tax collected depending on the seller's registration status in New Jersey.
What is and isn't taxed in New Jersey
Food bought at a grocery store is not taxed. This includes bread, milk, eggs, vegetables, frozen meals, and most other items you would find in the food aisles. However, prepared food — items from a deli counter, bakery, or restaurant — is taxed at the full 6.625 percent rate.
Prescription medications are exempt from sales tax. Over-the-counter medications like pain relievers and cold medicine are also exempt. Medical devices prescribed by a doctor, such as diabetic testing supplies or certain mobility aids, are not taxed. Cosmetics and toiletries, however, are taxed.
Clothing and footwear have a special rule. Items priced under $110 are not taxed. If a single item costs $110 or more, the entire purchase is taxed. This means a $109 shirt is tax-free, but a $110 shirt is taxed on the full amount. The threshold applies per item, not per transaction.
Services are generally not taxed unless they result in a tangible product. A haircut is not taxed. Car repair labor is not taxed. But if you buy a haircut and also purchase hair products at the salon, the products are taxed. Printing services are taxed because you receive a physical item.
How the tax appears on your receipt
When you check out at a store, the cashier or register calculates the tax based on the items you bought and their tax status. Exempt items should show zero tax. Taxable items show 6.625 percent added to the price. The total tax owed is rounded to the nearest cent.
If you buy a mix of taxable and exempt items — say, groceries and a shirt — only the shirt is taxed. The receipt should itemize which products were taxed and which were not, though the level of detail varies by store. If you believe an item was taxed incorrectly, you can ask the store to review the transaction.
Sales tax on online and mail orders
When you order from an online retailer, whether sales tax is collected depends on whether that seller is registered to collect tax in New Jersey. Large retailers like Amazon, Walmart, and Target collect New Jersey sales tax on orders shipped to addresses in the state. Smaller sellers or out-of-state businesses may not collect it at checkout.
If tax was not collected at the time of purchase, New Jersey law technically requires you to pay "use tax" — a tax on items you bought elsewhere but use in the state. In practice, use tax is rarely enforced for individual purchases. However, businesses are expected to track and report use tax on their tax returns.
Some online marketplaces, like eBay and Etsy, have agreements with New Jersey to collect sales tax on behalf of their sellers. This means tax may be collected even from small sellers. The rules continue to change as states and online platforms negotiate collection responsibilities.
Who collects and where the money goes
The retailer — the store or online seller — collects the sales tax from you at the point of sale. The retailer then sends that tax to the New Jersey Division of Taxation, usually on a monthly or quarterly basis depending on the volume of sales. The retailer is responsible for remitting the correct amount.
Sales tax revenue goes into the state's general fund and is used to pay for state services, infrastructure, and programs. Some revenue is also directed to specific purposes, such as property tax relief programs or environmental initiatives, depending on how the legislature allocates it in the state budget.
Resale certificates and business purchases
If you are a business that buys goods to resell, you can provide a resale certificate to your supplier. This certificate exempts you from paying sales tax on those purchases because the tax will be collected later when the customer buys the finished product. You must register with the New Jersey Division of Taxation to obtain a resale certificate.
Businesses also do not pay sales tax on items purchased for business use if those items are directly used in the production or delivery of a service or product. For example, a manufacturer does not pay tax on raw materials. The rules for what qualifies are specific, and businesses should consult the Division of Taxation or a tax professional if they are unsure.
Frequently Asked Questions
Is sales tax included in the price shown on store shelves?
No. The price on the shelf or tag is the pre-tax price. Sales tax is added at checkout. This is why the total you pay is higher than the labeled price. Some states include tax in the shelf price, but New Jersey does not.
Do I have to pay sales tax on a used car?
Yes. When you buy a used car from a dealer in New Jersey, sales tax applies to the purchase price. The tax is typically collected at the time of sale or when you register the vehicle. Private sales between individuals are not subject to sales tax, but the buyer must pay use tax when registering the vehicle with the Motor Vehicle Commission.
What about tax on haircuts and salon services?
Haircuts and salon labor are not taxed. However, if you purchase hair products — shampoo, conditioner, styling products — those items are taxed at 6.625 percent. Some salons bundle the service and product into one price; ask how the charge is broken down if you want to know the tax portion.
Are digital products like e-books and streaming services taxed?
E-books and digital publications are not taxed in New Jersey. Streaming services like Netflix and music subscriptions are also not subject to sales tax. However, software and digital downloads that are not publications may be taxed depending on the specific product and how it is classified.
Can I get a refund of sales tax if I return an item?
Yes. When you return a taxable item for a refund, the sales tax you paid is refunded along with the purchase price. If you exchange the item for another product, tax is recalculated based on the new item's price and tax status. Keep your receipt if you plan to return something.