New Jersey's current sales tax rate

New Jersey has a 6.625% sales tax statewide. This rate applies to most retail purchases of tangible goods — items you can touch and take home. The rate is uniform across all counties and municipalities; local areas cannot add their own sales tax on top of the state rate.

This 6.625% figure has been in place since 2006. It replaced the previous 6% rate that had existed for many years. When you see a price tag in a New Jersey store, the final amount you pay at checkout will be the listed price plus 6.625% in sales tax.

Key Takeaways

  • New Jersey's sales tax rate is 6.625% on most retail goods, and this rate is the same everywhere in the state.
  • Groceries, prescription medications, and most clothing items under $110 are exempt from sales tax in New Jersey.
  • Services like haircuts, car repairs, and restaurant meals are generally subject to sales tax, though prepared food rules vary by item.
  • Online purchases from out-of-state sellers may or may not have sales tax collected depending on the seller's registration status in New Jersey.

What is and isn't taxed in New Jersey

Not everything you buy in New Jersey is subject to the 6.625% rate. Groceries — unprepared food items you cook at home — are completely exempt. This includes produce, meat, dairy, bread, and canned goods. The exemption does not apply to prepared foods, hot foods, or items sold in a restaurant or deli.

Prescription medications are also exempt from sales tax when you present a valid prescription. Over-the-counter medications like aspirin or cold medicine are taxed. Clothing and footwear under $110 per item are exempt; items priced at $110 or more are taxed on the full amount. A pair of shoes costing $105 has no tax. A coat costing $115 is taxed on all $115.

Prepared foods, restaurant meals, and takeout are taxed. A sandwich from a deli counter is taxed. A frozen pizza you buy at a grocery store and take home to cook is not taxed. Hot foods kept warm for sale are taxed. Cold foods are not, with rare exceptions.

Services and what they cost in tax

Most services in New Jersey are subject to sales tax. A haircut, a car repair, dry cleaning, and a plumbing visit all have 6.625% sales tax added to the bill. The tax applies to the labor charge, not just materials.

Utilities — electricity, gas, and water — are taxed at a lower rate of 5.525%, not the standard 6.625%. This reduced rate has been in place to help offset the cost of essential services. Telephone and internet services are taxed at the standard 6.625% rate.

Hotel and motel stays are taxed at 6.625%, plus an additional occupancy tax that varies by municipality. Some towns add 5% or more on top of the sales tax for overnight lodging. The total tax on a hotel room can reach 11% to 12% depending on location.

How sales tax works on online and mail orders

When you order from an online retailer, whether the seller collects New Jersey sales tax depends on whether that seller is registered to do business in New Jersey. Large retailers like Amazon, Walmart, and Target collect and remit New Jersey sales tax on orders shipped to New Jersey addresses. Smaller sellers or those based outside New Jersey may not.

If a seller does not collect sales tax at checkout, you may owe use tax on that purchase. Use tax is the same rate as sales tax — 6.625% — and is meant to cover untaxed out-of-state purchases. Most individual consumers do not pay use tax voluntarily, though technically it is owed. The state does not typically pursue individual residents for use tax on small purchases.

When you order from a catalog or by mail, the same rule applies. If the company has a physical presence or is registered in New Jersey, tax is collected. If not, it may not be.

Special sales tax situations

Certain items and transactions have their own rules. Motor vehicles are subject to sales tax when purchased from a dealer. The tax is calculated on the sale price and is collected at the time of purchase or registration. Used cars are also taxed.

Gasoline and diesel fuel have their own tax structure separate from sales tax. New Jersey has an excise tax on fuel in addition to sales tax, making the total tax on fuel higher than 6.625%. The exact amount varies based on state excise tax rates.

Cigarettes and tobacco products are subject to sales tax plus an additional excise tax. The excise tax on cigarettes is substantial — currently $2.70 per pack — on top of the 6.625% sales tax on the purchase price.

Frequently Asked Questions

Do I pay sales tax on clothes at every store in New Jersey?

Only on items priced at $110 or more. A shirt costing $89 has no sales tax. A winter coat costing $150 is taxed on the full $150. Accessories like belts, hats, and jewelry are taxed regardless of price because they are not classified as clothing.

Is restaurant food taxed differently than grocery store food?

Yes. Unprepared groceries you buy to cook at home are not taxed. Restaurant meals, takeout, and prepared foods from a deli counter are all taxed at 6.625%. A rotisserie chicken from a grocery store deli is taxed. A raw chicken from the meat counter is not.

What if I buy something online from a company that didn't charge me sales tax?

Technically you owe use tax on that purchase at the same 6.625% rate. However, New Jersey does not actively pursue individual consumers for use tax on small online purchases. If you are concerned, you can report it on your state tax return, though most people do not.

Are utilities taxed at the same rate as other services?

No. Electricity, gas, and water are taxed at 5.525%, which is lower than the standard 6.625% rate for other services. Telephone and internet services use the standard 6.625% rate.

Do I pay sales tax when I buy a used car in New Jersey?

Yes. Used vehicles purchased from a dealer are subject to sales tax on the sale price. Private sales between individuals are not subject to sales tax, but you still owe use tax on the vehicle's value when you register it with the Motor Vehicle Commission.