New Jersey's current sales tax rate
New Jersey's statewide sales tax rate is 6.625%. This rate applies to most retail purchases of tangible goods and certain services. The rate is uniform across all counties — there are no local add-ons or variations based on where you shop within the state.
The 6.625% figure has been in place since 2006. It is composed of a 5% state rate plus a 1.625% rate dedicated to the Meadowlands regional tax district and the Casino Revenue Fund. When you see a price tag in a New Jersey store, the final amount you pay at checkout will include this full 6.625%.
Key Takeaways
- New Jersey charges 6.625% sales tax on most retail goods and selected services, with no local variations by county.
- Groceries, prescription medications, and most clothing under $110 per item are exempt from sales tax.
- Services like haircuts, repairs, and professional fees are generally not taxed, but labor charges bundled with taxable goods sometimes are.
- Online purchases from out-of-state sellers may or may not include New Jersey tax depending on the seller's nexus in the state.
What is and is not taxed in New Jersey
Food for home consumption — groceries, produce, meat, dairy — is not subject to sales tax in New Jersey. This exemption covers items you buy at supermarkets and farmers markets for eating at home. Hot prepared food, restaurant meals, and food sold for when ready consumption are taxed.
Prescription medications and medical devices are exempt. Over-the-counter medicines like aspirin and cold remedies are taxed. Clothing and footwear under $110 per item are exempt; anything priced at $110 or more is taxed. A pair of jeans at $95 is tax-free; a winter coat at $150 is taxed on the full amount.
Most services — haircuts, plumbing repairs, accounting, legal information — are not taxed. However, when a service includes a taxable product (like a mechanic selling you a part plus labor), the part is taxed but the labor typically is not. Some bundled services, such as certain telecommunications packages, may be taxed depending on how they are structured.
How tax is calculated at the register
Sales tax is calculated on the pre-tax price of taxable items. If you buy a shirt for $50, the tax is $50 × 0.06625 = $3.31, making your total $53.31. If you buy multiple items, tax is applied to each taxable item individually, then summed.
Rounding rules explore: the tax on each item is rounded to the nearest cent. If an item's tax calculates to $3.314, it rounds down to $3.31. If it calculates to $3.315, it rounds up to $3.32. The total you pay reflects these rounded amounts added together.
Retailers are responsible for collecting and remitting the tax to the New Jersey Division of Taxation. As a buyer, you pay the tax at the point of sale; you do not file it yourself on your personal tax return.
Sales tax on online and mail orders
Whether you owe New Jersey sales tax on an online purchase depends on whether the seller has nexus — a physical or economic presence — in New Jersey. If an out-of-state seller ships to you in New Jersey but has no warehouse, office, or employees in the state, they may not be required to collect tax. You may then owe use tax (a parallel tax on purchases) when you file your state return, though most individuals do not report this.
Large online retailers like Amazon, Walmart, and Target have nexus in New Jersey and do collect 6.625% tax on orders shipped to New Jersey addresses. Smaller sellers vary; some collect tax, some do not. The safest approach is to assume tax will be added at checkout if the seller has any significant presence in the state.
If you buy from a seller who does not collect tax and you want to be fully compliant, you can report the purchase as taxable on your New Jersey return. The state provides a line item for use tax, though enforcement on individual purchases is minimal.
Tax-free shopping days and special exemptions
New Jersey does not have an annual tax-free shopping day like some states do. However, the state does offer a Clothing and Footwear Tax Exemption year-round for items under $110, which effectively functions as a permanent discount for budget shoppers.
Certain organizations — nonprofits, schools, government agencies — can purchase items tax-free if they hold a resale certificate or exemption certificate from the Division of Taxation. Individuals cannot obtain these certificates for personal use.
Energy-related items have limited exemptions. Fuel oil, propane, and other heating fuels are taxed, but some energy-efficiency equipment may may have access to for exemptions under specific state programs. Check with the Division of Taxation if you are installing solar panels or other renewable energy systems.
How to verify the tax on your receipt
Your receipt should itemize which products were taxed and which were not. Groceries and exempt clothing should show a $0 tax line. Taxable items should show the 6.625% calculation. If you notice an error — for example, a grocery item taxed when it should not be — ask the cashier to correct it before you leave the store.
If you believe a retailer is incorrectly charging tax on exempt items, you can report it to the New Jersey Division of Taxation. Keep your receipt as documentation. The Division investigates complaints about systematic tax violations.
Frequently Asked Questions
Is New Jersey sales tax higher or lower than neighboring states?
New Jersey's 6.625% rate is lower than New York's 8.875% but higher than Pennsylvania's 6%. Delaware has no sales tax. If you live near a state border, the tax rate difference may influence where you shop for large purchases, though most people buy locally for convenience.
Do I pay sales tax on a car purchase in New Jersey?
Yes. Vehicle sales are taxed at 6.625% on the purchase price. You pay this tax when you register the vehicle with the Motor Vehicle Commission, not at the dealership. The tax is calculated on the actual sale price, not the manufacturer's suggested retail price.
What about tax on services like haircuts or car repairs?
Services themselves are not taxed in New Jersey. A $40 haircut is $40. However, if the service includes a product — like a haircut plus a $15 bottle of shampoo — the shampoo is taxed but the haircut labor is not. Ask your service provider to itemize if you want to know exactly what portion is taxable.
Can I deduct New Jersey sales tax on my federal return?
You can deduct either state sales tax or state income tax on your federal return, but not both. Most New Jersey residents deduct income tax because it is typically higher than sales tax. You would only deduct sales tax if you have very high retail purchases and low income tax liability, which is uncommon.
What if a store charges me the wrong tax amount?
Ask the cashier to recalculate before you leave. If the error is small, many stores will correct it on the spot. If you discover an error after leaving, contact the store's customer service. Systematic overcharging can be reported to the Division of Taxation, though individual transaction errors are usually handled between you and the retailer.