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 across all counties. The tax is added at the point of sale — when you buy something in a store, online, or by mail order from a seller with a New Jersey presence.

The tax applies to tangible goods: clothing, electronics, furniture, groceries at checkout, prepared food, and most other items you can touch and take home. It also applies to certain services, including repairs, alterations, and installation labor when bundled with a product purchase.

New Jersey does not allow local sales tax additions on top of the state rate. Unlike some states where counties or cities add their own percentage, you pay 6.625% everywhere in the state — whether you are in Newark, Atlantic City, or a small town in Sussex County.

Key Takeaways

  • New Jersey's sales tax rate is 6.625% statewide with no local additions, so the rate is the same in every county and municipality.
  • Groceries, prescription medications, and medical devices are exempt from sales tax, but prepared food and non-prescription items are taxed.
  • Clothing and footwear under $110 per item are exempt; items over that threshold are fully taxed.
  • Services like haircuts, repairs, and labor are generally not taxed unless they are bundled with a taxable product or fall into specific categories like telecommunications.
  • Online purchases from out-of-state sellers are subject to New Jersey sales tax if the seller has economic nexus in the state, which most large retailers do.

What is exempt from New Jersey sales tax

Several categories of goods and services are not subject to the 6.625% tax. Groceries — unprepared food you buy to cook at home — are completely exempt. This includes bread, milk, vegetables, meat, cereal, and canned goods. The exemption does not cover hot food, food eaten at a restaurant, or items from a deli counter.

Prescription medications and certain medical devices are exempt. This covers prescription drugs filled at a pharmacy, diabetic supplies, and devices prescribed by a doctor. Over-the-counter medications like aspirin or cold medicine are taxed.

Clothing and footwear under $110 per item are exempt. A pair of shoes costing $95 is not taxed. A winter coat costing $150 is fully taxed. Accessories like belts, hats, and gloves are also exempt if under $110. Once an item exceeds $110, the entire purchase is taxed — there is no partial exemption.

Most services are not taxed in New Jersey. A haircut, dental work, legal information, accounting, and car repair labor are not subject to sales tax. The exception is when labor is bundled with a taxable product — for example, if you buy a shirt and pay for alterations, the alteration labor is taxed as part of the sale.

Prepared food and restaurant meals

Prepared food is taxed at the full 6.625% rate. This includes food from a restaurant, deli, bakery, or food truck. A sandwich from a deli counter, a slice of pizza, a rotisserie chicken, or a coffee with a pastry are all taxed. The distinction is whether the food is ready to eat — if it is, it is taxed.

Groceries you prepare yourself are not taxed. Raw chicken, uncooked pasta, and fresh vegetables have no sales tax. But the moment a business prepares the food for you, the tax applies.

Catering and party platters are also taxed. If you order food to be delivered for an event, the entire order is subject to sales tax.

Online purchases and out-of-state sellers

Online purchases from sellers with a physical or economic presence in New Jersey are subject to the 6.625% sales tax. Large retailers like Amazon, Walmart, and Target collect New Jersey sales tax on orders shipped to the state because they meet the economic nexus threshold — they have enough sales or connections in the state to trigger the tax obligation.

Small out-of-state sellers without a New Jersey presence may not collect sales tax at checkout. However, New Jersey residents are technically responsible for paying "use tax" — a tax on purchases made outside the state for use in New Jersey — at the same 6.625% rate. In practice, this is rarely enforced for individual purchases, but it is a legal obligation.

If you are a business buying inventory or materials from out-of-state suppliers, the use tax rules are more actively enforced. You should consult with a tax professional about your specific situation.

Who collects and remits the tax

The seller is responsible for collecting sales tax from you at the point of sale and remitting it to the New Jersey Division of Taxation. Retailers register with the state, collect the tax, and file returns monthly or quarterly depending on their sales volume.

As a buyer, you do not file anything or send money to the state — the retailer handles the entire process. Your receipt should show the sales tax amount separately so you can see what was charged.

If a retailer fails to collect tax or you believe you were overcharged, you can contact the Division of Taxation. Overcharges are rare because the rate is fixed statewide, but errors do happen with exempt items or clothing threshold calculations.

Special situations and resale certificates

If you are a business buying goods for resale, you do not pay sales tax on those purchases. Instead, you provide the seller with a resale certificate (also called a reseller's permit). This certificate tells the seller that you are buying for resale and will collect tax when you sell the item to the end customer.

To obtain a resale certificate, you register with the New Jersey Division of Taxation and receive a certificate number. You then provide this number to your suppliers. Without it, you pay sales tax on wholesale purchases, which cuts into your profit margin.

Nonprofits and certain government entities may also be exempt from sales tax on specific purchases. The rules vary by organization type and purchase category. A nonprofit should contact the Division of Taxation to understand its exemption status.

Frequently Asked Questions

Is clothing always exempt from sales tax in New Jersey?

No. Clothing and footwear under $110 per item are exempt. Once an item costs $110 or more, the entire purchase is taxed. A $105 shirt is tax-free; a $115 shirt is fully taxed. Accessories like belts, hats, and gloves follow the same $110 threshold.

Do I pay sales tax on groceries?

Unprepared groceries — items you buy to cook at home — are not taxed. This includes produce, meat, dairy, bread, and canned goods. Prepared food from a deli, bakery, or restaurant is taxed. Hot food and food eaten on premises are always taxed.

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

If the seller has a physical or economic presence in New Jersey, they must collect and remit sales tax. Most large online retailers do. Small sellers without a New Jersey presence may not collect tax, though you are technically responsible for use tax on those purchases.

Are prescription medications taxed?

No. Prescription drugs filled at a pharmacy are exempt from sales tax. Diabetic supplies and medical devices prescribed by a doctor are also exempt. Over-the-counter medications like aspirin or cough syrup are taxed.

How do I know if a service is taxed?

Most services — haircuts, repairs, legal information — are not taxed. The exception is when labor is bundled with a taxable product. For example, alterations on a clothing purchase are taxed because they are part of the sale of a taxable item. Telecommunications services are also taxed in New Jersey.