New Jersey sales tax is 6.625 percent on most goods and services you buy

When you buy something in New Jersey, the state adds a 6.625 percent tax to the price at checkout. This is the statewide rate that applies in every county. Some counties add a local tax on top of that — usually between 0.5 and 1.25 percent — so your total can range from 6.625 to 7.875 percent depending on where you shop.

The tax is calculated on the sale price before you pay. If an item costs $100, you add $6.63 in state tax (and possibly more for local tax). The store collects this money and sends it to the New Jersey Division of Taxation.

Not everything is taxed the same way. Groceries, prescription medicines, and certain other items are taxed at a lower rate or not taxed at all. Knowing what is and is not taxed can help you understand your receipt and budget your spending.

Key Takeaways

  • New Jersey's statewide sales tax rate is 6.625 percent, and most counties add a local tax of 0.5 to 1.25 percent on top of that.
  • Groceries and prescription medicines are taxed at 3.5 percent instead of the full rate, while some items like clothing under $110 are not taxed at all.
  • The tax is added at the register and collected by the store, which then sends it to the state.
  • Your total tax rate depends on which county you are in, so the same item may cost slightly different amounts in different parts of the state.

What items are taxed at the full 6.625 percent rate

Most things you buy in stores are taxed at the full state rate. This includes clothing and shoes, electronics, furniture, household goods, and most services. Restaurant meals and prepared foods are also taxed at the full rate, whether you eat in or take out.

Gas, oil, and other motor fuels are taxed at 6.625 percent. Haircuts, dry cleaning, and repair services are taxed at the full rate. If you are unsure whether something is taxed, the safest assumption is that it is taxed at 6.625 percent unless it falls into one of the categories listed below.

Items taxed at 3.5 percent or not taxed at all

Groceries — food you buy to cook at home — are taxed at only 3.5 percent. This includes bread, milk, eggs, vegetables, fruit, meat, and canned goods. It does not include hot food, prepared meals, or anything sold at a restaurant or deli counter.

Prescription medicines are also taxed at 3.5 percent. Over-the-counter medicines like aspirin or cold medicine are not taxed at all. Medical devices prescribed by a doctor, such as diabetic testing supplies or hearing aids, are not taxed.

Clothing and footwear under $110 per item are not taxed. A shirt that costs $80 is tax-free; a coat that costs $150 is taxed on the full amount. This rule applies to each individual item, not to your total purchase.

Newspapers and magazines are not taxed. Textbooks and school supplies used in school are not taxed. Some energy sources, like residential heating oil and propane, are not taxed.

How county taxes add to the state rate

New Jersey allows counties to add their own sales tax on top of the state rate. Most counties charge between 0.5 and 1.25 percent extra. This means your total tax can range from 6.625 percent (state only, in areas with no county tax) to 7.875 percent (state plus county).

The county tax applies to the same items as the state tax. If something is taxed at the state level, the county tax is added to it. If something is not taxed at the state level, the county does not tax it either.

Your county determines the rate, not the store. If you live or shop in Bergen County, you pay Bergen County's rate. If you cross into Hudson County, the rate changes. The store's register is programmed with the correct rate for that location.

When you do not pay sales tax

If you buy something for resale — meaning you are a business buying inventory to sell to customers — you do not pay sales tax. You provide the store with a resale certificate instead. The business that buys from you will collect tax when they sell to the public.

Some nonprofits and government agencies do not pay sales tax on certain purchases. This requires documentation and is handled case by case.

If you buy something online from an out-of-state seller who does not have a physical location in New Jersey, you may not see sales tax added at checkout. However, New Jersey requires you to pay "use tax" on that purchase when you file your state income tax return. Use tax is the same rate as sales tax and applies to items you bring into the state or have delivered to you.

How sales tax appears on your receipt

When you check out, the register shows the subtotal, then lists the tax amount separately, then shows your total. The tax line usually says "Tax" or "Sales Tax" and shows the dollar amount and sometimes the percentage rate.

If you bought items taxed at different rates — for example, groceries and a shirt — the receipt may show separate tax calculations. Some receipts break this down by item; others combine it into one tax line. Either way, the total is correct.

If you believe you were charged tax on something that should not be taxed, keep your receipt. You can contact the store's customer service or the New Jersey Division of Taxation if you think an error was made.

Frequently Asked Questions

Why is my sales tax different in different counties?

Each county in New Jersey sets its own local sales tax rate on top of the 6.625 percent state rate. Bergen County's rate is different from Hudson County's rate, for example. When you shop in a different county, you pay that county's rate. This is why the same item costs slightly different amounts depending on where you buy it.

Do I have to pay sales tax on clothes under $110?

No. Clothing and footwear under $110 per item are not taxed in New Jersey. The limit applies to each individual item, not your total purchase. A $80 shirt is tax-free, but a $150 coat is taxed on the full $150.

Is restaurant food taxed differently than grocery store food?

Yes. Groceries you buy to cook at home are taxed at 3.5 percent. Restaurant meals, prepared foods, and anything sold hot or ready to eat are taxed at the full 6.625 percent (plus any county tax). This includes takeout from delis and restaurants.

What is use tax and when do I owe it?

Use tax is a tax on items you buy outside New Jersey or from online sellers who do not charge sales tax. It is the same rate as sales tax and applies when you bring items into the state or have them delivered to you. You report use tax on your state income tax return.

Are prescription medicines taxed?

Prescription medicines are taxed at 3.5 percent, not the full rate. Over-the-counter medicines like aspirin or cough syrup are not taxed at all. Medical devices prescribed by a doctor are also not taxed.