New Jersey's sales tax rate and what it covers

New Jersey charges a 6.625% sales tax on most retail purchases. This is the statewide rate that applies when you buy tangible goods — clothing, electronics, furniture, groceries at the register. The tax is added at checkout and collected by the retailer, who then sends it to the New Jersey Division of Taxation.

Not everything is taxed at this rate. Some items are taxed at a lower rate, some are not taxed at all, and some purchases fall into categories with their own rules. Understanding what is and is not taxed can affect what you actually pay and whether you need to report certain purchases.

Key Takeaways

  • New Jersey's statewide sales tax is 6.625%, applied to most retail goods at the point of sale.
  • Groceries, prescription medications, and certain medical equipment are exempt from sales tax in New Jersey.
  • Some items like clothing under $110 per item are taxed at a lower rate or not taxed, depending on the purchase date and category.
  • Online purchases from out-of-state sellers may or may not have New Jersey sales tax added, depending on whether the seller has a physical presence in the state.
  • Restaurants and prepared foods are taxed at the full 6.625% rate, while unprepared groceries are not.

Items that are not taxed in New Jersey

Certain purchases are completely exempt from New Jersey sales tax. Groceries — unprepared food you buy to cook at home — are not taxed. This includes bread, milk, vegetables, meat, and canned goods. The key word is unprepared: if the same item is ready to eat or has been prepared by the store, it is taxed.

Prescription medications are not taxed, whether you buy them at a pharmacy or through mail order. Over-the-counter medications like aspirin or cold medicine are taxed. Medical equipment prescribed by a doctor — wheelchairs, crutches, diabetic testing supplies, hearing aids — is also exempt.

Clothing and footwear have a special rule. Items priced under $110 are not taxed. A shirt that costs $85 is tax-free; the same shirt priced at $115 is taxed. This applies to regular clothing, not to items like athletic uniforms or costumes.

What is taxed at the full rate

Most retail goods are taxed at 6.625%. This includes electronics, furniture, appliances, books, toys, and household items. Clothing over $110 per item is taxed. Shoes of any price are taxed, even if they cost less than $110.

Restaurant meals and prepared foods are taxed at the full rate. This includes takeout, delivery, and food from a deli counter. A sandwich you buy ready-made is taxed; the same sandwich's ingredients bought separately are not. Beverages like soda, juice, and coffee are taxed whether you drink them in the restaurant or take them out.

Services are generally not taxed in New Jersey, with some exceptions. Haircuts, repairs, and labor are not subject to sales tax. However, if you buy a product as part of a service — like paint used by a contractor — that product portion may be taxed depending on the contract.

How sales tax works on online and out-of-state purchases

When you order from an online retailer, whether New Jersey sales tax is added depends on whether that retailer has a physical presence in New Jersey. This means a store, warehouse, or office location in the state. If Amazon, Target, or Walmart has a warehouse or fulfillment center in New Jersey, they must collect and remit New Jersey sales tax on your order.

If you order from a small retailer with no physical presence in New Jersey, they typically do not collect New Jersey sales tax at checkout. However, New Jersey law requires you to pay use tax on that purchase — which is the same rate as sales tax — when you file your state income tax return. Most individual shoppers do not report this, but it is technically owed.

Marketplace sellers on platforms like eBay or Etsy may or may not collect New Jersey sales tax depending on their location and the platform's policies. Check the tax line at checkout to see what is being charged.

Local taxes and combined rates

New Jersey does not allow cities or counties to add their own local sales tax on top of the statewide rate. The 6.625% rate is uniform across the entire state — you pay the same amount in Newark as you do in Cape May. This is different from many other states where local jurisdictions add their own percentage.

Some counties and municipalities have local taxes on specific items like hotel rooms or restaurant meals, but these are separate from the sales tax and appear as distinct line items on your bill. The base sales tax rate itself does not vary by location within New Jersey.

Who collects and where the money goes

The retailer or seller collects sales tax from you at the point of purchase and holds it temporarily. They then file a sales tax return with the New Jersey Division of Taxation, usually monthly or quarterly depending on their sales volume. The collected tax is remitted to the state.

Revenue from New Jersey sales tax funds state operations, including education, transportation, and social services. The state does not earmark sales tax for a specific program — it goes into the general fund. Retailers are responsible for collecting and remitting accurately; if they fail to do so, they face penalties and interest.

Frequently Asked Questions

Do I pay sales tax on clothing under $110?

No. Clothing items priced under $110 are not taxed in New Jersey. Shoes are taxed regardless of price. If you buy a $95 shirt, you pay no sales tax. If you buy a $115 shirt, you pay 6.625% tax on the full price.

Is restaurant takeout taxed the same as dine-in?

Yes. Whether you eat in the restaurant or take the food home, prepared food is taxed at 6.625%. The only difference is that some restaurants may charge tax on the full bill for dine-in but calculate it differently for takeout — the tax rate itself does not change.

What happens if I buy something online from a seller outside New Jersey?

If the seller has no physical location in New Jersey, they usually do not collect New Jersey sales tax. You are technically required to pay use tax on your state income tax return, but most individuals do not report these purchases. Large retailers with warehouses in New Jersey must collect the tax at checkout.

Are prescription glasses and contacts taxed?

Prescription eyeglasses and contact lenses are taxed at the full 6.625% rate. The frames, lenses, and contacts themselves are considered tangible goods, not medical equipment. However, some medical devices like diabetic testing strips remain exempt.

Do I pay sales tax on a haircut or car repair?

No. Services like haircuts, repairs, and labor are not subject to sales tax in New Jersey. If you buy a product as part of the service — like hair dye or car parts — the retailer may tax the product separately depending on how the invoice is structured.