New Jersey's sales tax rate and what it covers
New Jersey has a 6.625% sales tax on most goods and services you buy in the state. This is a single statewide rate — it does not vary by county or municipality the way property taxes do. When you buy something at a store, online from a New Jersey seller, or from a service provider, that 6.625% gets added to your bill at checkout.
The tax applies to tangible personal property (things you can touch) and certain services. Clothing and footwear under $110 per item are exempt, which is one of the most common exceptions. Groceries for home consumption — milk, bread, vegetables, meat — are also exempt. Prepared food you eat on premises or take out, like restaurant meals or deli sandwiches, is taxed.
Services that are taxed include haircuts, dry cleaning, car repairs, and telecommunications. Services that are not taxed include medical services, legal services, and accounting. The line between what counts as a service versus a product can be confusing; if you are unsure whether something you buy should be taxed, the New Jersey Division of Taxation website lists specific categories.
Key Takeaways
- New Jersey's sales tax is 6.625% statewide and applies to most goods and many services.
- Clothing and footwear under $110 per item are exempt from sales tax.
- Groceries for home consumption are not taxed, but prepared food and restaurant meals are.
- Services like haircuts and car repairs are taxed, while medical and legal services are not.
- Online purchases from New Jersey sellers are subject to sales tax; purchases from out-of-state sellers depend on that seller's tax obligations.
Items and services that are exempt from New Jersey sales tax
Beyond clothing under $110 and groceries, several categories are completely exempt. Prescription medications and medical devices are not taxed. Newspapers and certain periodicals are exempt. Fuel used for heating is exempt, though electricity and natural gas for general use are taxed.
Agricultural equipment and seeds used for farming are exempt. Certain machinery and equipment used directly in manufacturing are exempt under specific conditions. If you run a business and buy items for resale, you do not pay sales tax on those items — you provide the seller with a resale certificate instead.
Some services are also exempt: labor performed by employees (your employer does not pay sales tax on your wages), services performed by nonprofits in certain contexts, and services provided by government agencies. Repairs to clothing and footwear are taxed, even though the clothing itself may be exempt.
When you pay sales tax on online purchases
If you buy something online from a seller located in New Jersey, you pay the 6.625% sales tax. If you buy from a seller outside New Jersey, whether you owe sales tax depends on whether that seller is required to collect it. Large online retailers like Amazon now collect New Jersey sales tax on most items, even though they are not physically located in the state.
Smaller out-of-state sellers may not collect New Jersey sales tax at checkout. In that case, technically you owe "use tax" — a tax on items you bring into New Jersey or have delivered here. In practice, most individuals do not report use tax on personal purchases. Businesses are expected to track and report use tax on business purchases from out-of-state sellers.
The rule changed significantly in 2018 when the U.S. Supreme Court ruled that states can require online sellers to collect sales tax even if they have no physical presence in the state. New Jersey has enforced this rule, so most major online retailers now charge you sales tax regardless of where they are based.
Who collects the sales tax and where it goes
The seller — the store, restaurant, service provider, or online retailer — collects the sales tax from you and is responsible for sending it to the New Jersey Division of Taxation. The seller is required to register for a sales tax permit and file returns, usually monthly or quarterly depending on the volume of sales.
The revenue goes into the state's general fund and is used for state operations, education, and infrastructure. Unlike some states, New Jersey does not dedicate sales tax revenue to a specific program or fund. The tax is simply part of the state's overall revenue stream.
If you believe a seller charged you sales tax incorrectly — for instance, taxing an exempt item like groceries — you can contact the Division of Taxation to report it. You can also request a refund from the seller directly, though the seller is the one responsible for remitting the tax to the state.
Sales tax on specific purchases: food, clothing, and services
Food is the category with the most exceptions. Groceries you buy at a supermarket to cook at home are not taxed. This includes raw meat, produce, dairy, bread, and canned goods. However, the moment that food is prepared — cooked, assembled, or served — it becomes taxable. A rotisserie chicken from the supermarket deli counter is taxed. A sandwich made to order is taxed. Soda and candy are taxed because they are considered prepared food or non-essential items.
Clothing under $110 per item is exempt. This applies to the price of a single item before tax. If you buy a $109 shirt, it is exempt. If you buy a $111 shirt, the entire purchase is taxed. Accessories like belts, hats, and gloves are also exempt if under $110. Shoes under $110 are exempt. Work uniforms and protective clothing are taxed even if under $110.
Services vary widely. A haircut is taxed. A gym membership is taxed. Pest control is taxed. Landscaping is taxed. Plumbing and electrical work are taxed. However, medical services (doctor visits, dental work, therapy) are not taxed. Legal services are not taxed. Accounting services are not taxed. The distinction is that personal services related to health, law, and professional advice are exempt, while services that maintain or improve property or appearance are taxed.
How to learn about something is taxable
The New Jersey Division of Taxation maintains a searchable database of taxable and exempt items on its website. You can search by product category or service type. The database is organized by industry and includes specific examples.
If you cannot find your item in the database, you can contact the Division of Taxation directly by phone or email. They will tell you whether a specific purchase is subject to sales tax. This is especially useful if you run a business and need to know whether to charge tax on something you sell.
Sellers are also required to know the tax status of what they sell. If a seller charges you tax on an exempt item, you can ask them to correct it. If they refuse, you can report them to the Division of Taxation.
Frequently Asked Questions
Is sales tax included in the price shown on the shelf?
No. The price on the shelf or in an online listing is the pre-tax price. Sales tax is added at checkout. This is why your receipt total is higher than the marked price.
Do I have to pay sales tax if I buy something online from out of state?
It depends on the seller. Large retailers now collect New Jersey sales tax. Smaller sellers may not. If they do not, you technically owe use tax, but this is rarely enforced for personal purchases. Businesses should track and report use tax on business purchases.
Are diapers and baby formula taxed in New Jersey?
Baby formula is not taxed because it is considered a food product. Diapers are taxed because they are not food or clothing. Some states exempt diapers, but New Jersey does not.
What if a store overcharged me sales tax?
Ask the store for a refund. If they refuse, contact the New Jersey Division of Taxation and provide your receipt. The Division can investigate and require the store to refund you.
Do I pay sales tax on a car purchase?
Yes. Vehicle sales tax in New Jersey is 6.625%, applied to the purchase price. This is collected by the dealer and remitted to the state. You also pay registration and title fees, which are separate from sales tax.