New Jersey's current sales tax rate

New Jersey has a statewide sales tax of 6.625%. This is the rate applied to most taxable goods and services you buy in the state. Unlike some states, New Jersey does not allow local municipalities to add their own sales tax on top of the state rate, so the rate is the same whether you shop in Newark, Atlantic City, or a small town in the Pine Barrens.

The 6.625% rate has been in place since 2006. It applies at the register when you purchase items, and the seller is responsible for collecting it and sending it to the New Jersey Division of Taxation.

Key Takeaways

  • New Jersey's sales tax rate is 6.625% statewide, with no local add-ons allowed.
  • Groceries, prescription medications, and medical devices are exempt from sales tax in New Jersey.
  • Clothing and footwear under $110 per item are not taxed; items over that threshold are taxed on the full amount.
  • Services like haircuts, repairs, and labor are generally taxed, but some professional services have different rules.
  • 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

New Jersey exempts certain categories of goods from the 6.625% sales tax. Groceries — food you buy to prepare at home — are not taxed. This includes bread, milk, vegetables, meat, and canned goods. Restaurant meals and prepared foods are taxed.

Prescription medications and medical devices like diabetic supplies, hearing aids, and mobility equipment are exempt. Over-the-counter medications like aspirin and cold medicine are taxed as regular goods.

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. A $105 shirt is tax-free; a $115 shirt is taxed on the full $115.

Most services are taxed in New Jersey, including haircuts, car repairs, plumbing, and appliance repair. However, some professional services like accounting, legal advice, and medical services have different treatment depending on the specific nature of the work.

How sales tax works at checkout

When you buy a taxable item, the seller calculates 6.625% of the purchase price and adds it to your total. If you buy a $50 item, you pay $50 plus $3.31 in tax, for a total of $53.31. The seller collects this tax and remits it to the state monthly or quarterly depending on their business size.

The tax is calculated on the subtotal before any discounts or coupons are applied. If you have a coupon that reduces the price, the tax is calculated on the reduced amount. Some retailers display the tax separately on your receipt; others include it in the final total.

Sales tax on online and mail orders

Whether you pay sales tax on an online purchase depends on whether the seller has a sales tax nexus in New Jersey — meaning they have a physical location, employees, or significant business activity in the state. If they do, they must collect and remit New Jersey sales tax. If they don't, they typically don't collect it at checkout.

Large online retailers like Amazon, Walmart, and Target have nexus in New Jersey and collect sales tax on orders shipped to the state. Smaller sellers or out-of-state businesses may not. You are technically responsible for reporting and paying tax on untaxed purchases yourself, but this is rarely enforced for individual consumers.

If you order from a seller outside the United States, sales tax rules are different and depend on the type of goods and the seller's registration status.

Special sales tax situations

New Jersey has specific rules for certain transactions. Trade-ins — when you give an old item as part payment for a new one — are taxed only on the difference. If you trade in a car worth $5,000 toward a $15,000 purchase, you pay tax only on $10,000.

Resale certificates allow businesses to buy goods without paying sales tax if they plan to resell them. A clothing store, for example, does not pay sales tax when it buys inventory from a wholesaler. The tax is paid by the customer at the retail register.

Delivery and shipping fees are generally taxed as part of the sale. If you buy an item for $50 and pay $10 for delivery, the tax is calculated on the full $60.

Who collects and where the money goes

The seller — whether a store, online retailer, or service provider — is responsible for collecting sales tax from you. They then file returns with the New Jersey Division of Taxation, usually monthly or quarterly. The state uses this revenue to fund schools, infrastructure, and state services.

If you believe a seller has not collected tax when they should have, or if you have questions about a specific transaction, you can contact the New Jersey Division of Taxation directly. They maintain a list of registered sellers and can answer questions about whether a particular business is required to collect tax.

Frequently Asked Questions

Do I pay sales tax on groceries?

No. Food you buy to prepare and eat at home is exempt from sales tax in New Jersey. This includes produce, meat, dairy, bread, and canned goods. Restaurant meals, prepared foods from a deli counter, and food you eat on premises are taxed.

Is clothing always tax-free?

Clothing and footwear under $110 per item are tax-free. If a single item costs $110 or more, you pay tax on the full amount. Accessories like belts, hats, and gloves under $110 are also exempt, but jewelry is taxed regardless of price.

Why do I sometimes see different totals for the same item?

The 6.625% rate is consistent statewide, but the final total depends on what you're buying and where. Groceries have no tax. Clothing under $110 has no tax. Services and most other goods are taxed. If you buy the same item in different states, the tax will differ because each state sets its own rate.

Do I have to pay sales tax on items I buy online from out-of-state sellers?

It depends on the seller. Large retailers with operations in New Jersey collect and remit sales tax. Smaller sellers without nexus in the state typically don't collect it at checkout, though you are technically responsible for reporting it yourself. Most consumers don't, and enforcement is rare.

What if a seller charged me sales tax on something that should be exempt?

Ask the seller to correct the charge. If they won't, contact the New Jersey Division of Taxation with your receipt and details. They can investigate whether the seller is properly trained on exemptions and may take action if there's a pattern of incorrect charging.