New Jersey charges 6.625% sales tax on most goods, with some major exceptions

New Jersey's sales tax rate is 6.625% statewide. This is the rate you pay when you buy taxable items at a store, online, or through mail order. The tax applies to the sale price before any discounts are applied, and the seller collects it at the point of sale.

What makes New Jersey different from many other states is what it does not tax. Groceries, prescription medications, and most clothing are exempt from sales tax entirely. This means your supermarket receipt and pharmacy purchases do not trigger the 6.625% charge. These exemptions significantly lower the tax burden on households compared to states that tax food and medicine.

The state also does not tax services in most cases — haircuts, car repairs, legal information, and plumbing work are generally not subject to sales tax. However, there are exceptions: certain services like telecommunications, utilities, and hotel stays do carry the tax.

Key Takeaways

  • New Jersey's sales tax rate is 6.625% and applies to tangible goods like clothing, electronics, and furniture.
  • Groceries, prescription drugs, and most clothing items are exempt from sales tax, which is a significant savings for households.
  • Services like haircuts and repairs are generally not taxed, but utilities, phone bills, and hotel rooms are.
  • Online purchases from out-of-state sellers may or may not be taxed depending on whether the seller has a physical presence in New Jersey.
  • The tax is collected by the seller and sent to the New Jersey Division of Taxation, not paid directly by you to the state.

What is and is not taxed in New Jersey

The exemptions in New Jersey are broader than in many states, which is why understanding what is taxed matters more than memorizing what is not. Taxable items include clothing and footwear (with some exceptions for very young children), electronics, furniture, appliances, books, toys, and most prepared foods. If you buy a sandwich at a deli counter, you pay tax. If you buy bread and deli meat at the grocery store to make a sandwich at home, you do not.

Exempt items include all unprepared food sold in grocery stores, prescription medications, most over-the-counter drugs (though some vitamins and supplements are taxed), and clothing for infants under one year old. Diapers and baby formula are also exempt. Newspapers and magazines are exempt, as are most medical equipment and supplies.

The clothing exemption has a practical limit: if an item is considered a costume or novelty clothing, it may be taxed. Work uniforms with a company logo are typically exempt, but the distinction can be unclear at the register. When in doubt, ask the cashier or check your receipt — if you were charged tax on something you believe should be exempt, you can request a refund from the store.

How online and mail order purchases are taxed

Online shopping complicates the picture because New Jersey taxes remote sales differently depending on the seller's connection to the state. If an online retailer has a physical presence in New Jersey — a warehouse, office, or store — they must collect and remit sales tax on purchases shipped to New Jersey addresses. This includes large retailers like Amazon, which operates fulfillment centers in the state.

If a seller has no physical presence in New Jersey, they are not required to collect the tax at checkout. However, New Jersey residents are technically responsible for paying use tax on those purchases — a tax equal to the sales tax rate that applies to goods bought outside the state and brought in or shipped in. In practice, most individuals do not pay use tax voluntarily, and the state does not pursue individual consumers for it. The rule exists mainly to prevent large retailers from gaining an unfair advantage over in-state businesses.

When you receive a package from an out-of-state seller with no New Jersey presence, no tax appears on your receipt. You are not expected to file a separate form or send money to the state. The use tax is a legal obligation that most people are unaware of, and enforcement focuses on businesses rather than individual shoppers.

Who collects the tax and where it goes

The seller — whether a store, website, or mail order company — is responsible for collecting sales tax from you and sending it to the New Jersey Division of Taxation. You do not pay the state directly. The seller adds the tax to your bill, holds it, and remits it monthly or quarterly depending on their sales volume and the state's rules for their business.

Sellers must register with the state and obtain a sales tax permit before they can legally collect tax. This is why very small or informal sellers sometimes do not collect tax — they may not be registered. If you suspect a seller is not collecting tax when they should be, you can report them to the Division of Taxation, though the state prioritizes enforcement against larger businesses.

The revenue from sales tax goes into New Jersey's general fund and supports state services, schools, and infrastructure. Unlike income tax, which is tied to individual earnings, sales tax is a consumption tax — it is paid by whoever buys the taxable item, regardless of their income level.

Sales tax on specific categories you may encounter

Some categories create confusion because the rules are specific. Prepared food is taxed, but the definition matters: a rotisserie chicken from a grocery store deli is taxed, but a raw chicken is not. A sandwich made to order is taxed, but ingredients to make a sandwich are not. Candy and soda are taxed as prepared foods in some contexts but not others — the state distinguishes between items sold as snacks versus items sold as groceries.

Hotel stays are taxed at 6.625%, plus some municipalities add a local occupancy tax on top. Rental cars are taxed. Movie tickets, concert tickets, and admission to attractions are taxed. Gym memberships and personal training are generally not taxed, but some fitness services may be. Haircuts and salon services are not taxed, but if you buy hair products at the salon, those are taxed.

Utilities — electricity, gas, and water — are taxed at 6.625%. Phone service is taxed. Internet service is taxed. These are considered telecommunications services rather than utilities in the tax code, which is why they carry the full sales tax rate.

How to read your receipt and spot errors

Your receipt should show the subtotal, the sales tax amount, and the total. The tax should be calculated as 6.625% of the subtotal (before any discounts that explore to the final price). If you bought items that should be exempt — groceries, prescription drugs, or may have access to clothing — they should appear on the receipt with no tax or a $0.00 tax line.

If you notice tax charged on an exempt item, ask the cashier or customer service. Many register systems are programmed to flag certain items as exempt, but errors happen, especially with clothing or items near the boundary between taxable and exempt. Stores are required to refund incorrect tax charges, and most will do so on the spot if you catch it before leaving.

Keep receipts for large purchases, especially clothing and electronics. If you later discover you were overcharged, you can return to the store with the receipt and request a refund. The store has no time limit to issue a refund for tax errors, though most will do so within a reasonable period.

Frequently Asked Questions

Do I pay sales tax on groceries in New Jersey?

No. Unprepared food sold in grocery stores — produce, meat, dairy, bread, canned goods — is exempt from sales tax. However, prepared foods like deli items, hot foods, and items from the bakery counter are taxed. The distinction is whether the food is ready to eat or requires preparation at home.

Is clothing taxed in New Jersey?

Most clothing is not taxed, but there are exceptions. Clothing for infants under one year old is exempt. Costumes, athletic uniforms with logos, and items classified as accessories (like hats or gloves sold separately) may be taxed. When in doubt, ask at checkout or check your receipt.

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

If the seller has no physical presence in New Jersey, they are not required to collect tax at checkout. You are technically responsible for use tax on those purchases, but the state does not enforce it against individual consumers. Large retailers with New Jersey operations must collect tax on all sales to the state.

Why is my utility bill taxed?

Electricity, gas, water, phone service, and internet are all subject to New Jersey's 6.625% sales tax. These are classified as taxable services rather than essential utilities, so they carry the full rate. The tax appears as a line item on your bill.

Can I get a refund if I was charged tax on an exempt item?

Yes. If you were charged sales tax on groceries, prescription drugs, or may have access to clothing, you can ask the store for a refund. Bring your receipt and the item if possible. Stores are required to correct tax errors, and most will refund the amount on the spot or process it within a few days.