Yes, New Jersey has a sales tax of 6.625 percent
New Jersey charges a sales tax of 6.625 percent on most retail purchases. This is the statewide rate that applies when you buy taxable goods at a store, online, or through mail order. Some counties and municipalities do not add a local sales tax on top of this, which makes New Jersey's combined rate lower than many neighbouring states.
The tax is collected by the retailer at the point of sale and sent to the New Jersey Division of Taxation. You will see it added to your receipt after the subtotal. If you buy something online from a seller based in New Jersey, or from an out-of-state seller that has a physical presence in the state, the 6.625 percent tax applies to your order.
Key Takeaways
- New Jersey's statewide sales tax rate is 6.625 percent, with no additional local sales tax in most areas.
- Groceries, prescription medications, and most clothing items under $110 are exempt from sales tax in New Jersey.
- Prepared foods, restaurant meals, and non-prescription drugs are taxable, even though similar unprepared items are not.
- Services like haircuts, repairs, and professional fees are generally not subject to sales tax unless they involve a taxable product.
What is exempt from New Jersey sales tax
New Jersey exempts several categories of everyday purchases. Unprepared food — groceries you cook at home — is not taxed. This includes meat, produce, dairy, bread, and canned goods. However, prepared foods sold hot or ready to eat are taxed, so a rotisserie chicken from the supermarket deli counter is taxable, but raw chicken breasts are not.
Prescription medications are exempt when dispensed by a licensed pharmacist with a valid prescription. Over-the-counter medicines like aspirin, cold remedies, and vitamins are taxable. Clothing and footwear under $110 per item are also exempt — the exemption applies to the individual item, not your total purchase. A $120 coat is taxable; a $100 coat is not.
Medical equipment prescribed by a doctor, such as wheelchairs, crutches, and diabetic supplies, is exempt. Services — haircuts, plumbing repairs, legal information, accounting — are generally not taxed unless they result in a taxable product being delivered to you. A haircut is not taxed; a haircut plus a taxable hair product sold to you is taxed on the product only.
Items that are taxed even though they seem like they shouldn't be
Prepared foods are taxed even though raw ingredients are not. This includes hot deli items, bakery items sold warm, pizza, sandwiches made to order, and anything from a restaurant or food service counter. Coffee and beverages are taxed whether hot or cold. Candy and snack foods are also taxable, even though they are food.
Non-prescription health and beauty items are taxed. Shampoo, toothpaste, deodorant, and over-the-counter pain relievers all carry the 6.625 percent tax. Clothing over $110 per item is taxed, including shoes, belts, and accessories. A $150 winter coat is taxable; a $90 sweater is not.
Gasoline and diesel fuel are taxed at the pump as part of the sale price. Utilities like electricity and natural gas are not subject to sales tax, but if you purchase a taxable appliance or service to install one, that item or labour may be taxed depending on the circumstances.
How to know if something is taxable
The simplest rule: if it is a physical product you are taking home, it is probably taxed unless it falls into one of the exempt categories. Services are usually not taxed. Groceries are not taxed. Prescription drugs are not taxed. Everything else — clothing over $110, prepared food, non-prescription drugs, household goods — is taxed.
When you are unsure, look at your receipt. The retailer is required to show the tax amount separately. If no tax appears, the item was exempt. If you are making a large purchase and want to confirm the tax status before you buy, you can contact the New Jersey Division of Taxation or ask the retailer directly — they know their own inventory.
Online purchases follow the same rules. If you order from an out-of-state retailer that does not collect New Jersey sales tax, you may owe 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 New Jersey that were not taxed at purchase. In practice, most individual shoppers do not report use tax, but it is technically owed.
Why New Jersey's rate is lower than nearby states
New Jersey does not allow counties or cities to add a local sales tax on top of the state rate. This is different from New York, Pennsylvania, and many other states, where local jurisdictions can add 1 to 2 percent or more. Because of this, New Jersey's combined rate stays at 6.625 percent statewide, making it competitive with neighbouring regions.
The state has held this rate since 2006. Other states have raised their rates in that time, which is one reason New Jersey's rate appears lower than you might expect. The tax funds state and local services, but the structure — no local add-on — keeps the visible rate consistent no matter where in the state you shop.
What happens if you buy something online from out of state
If you order from a retailer based outside New Jersey and they do not have a warehouse, office, or other physical presence in the state, they are not required to collect New Jersey sales tax. You will not see tax added to your receipt. However, New Jersey law says you owe use tax on that purchase — it is the same 6.625 percent rate, just collected differently.
Use tax is reported on your New Jersey income tax return. You list the total value of taxable items you purchased out of state and calculate the tax owed. Most individual shoppers do not report use tax, and enforcement is limited to large purchases or business transactions. If you are buying a car, boat, or other high-value item out of state, you will owe use tax when you register it in New Jersey.
Frequently Asked Questions
Is clothing always exempt from sales tax in New Jersey?
No. Only clothing and footwear items under $110 per item are exempt. A single item priced at $110 or more is taxed. Accessories like belts, scarves, and hats follow the same rule — under $110 is exempt, $110 and over is taxed.
Are groceries from a supermarket always tax-free?
Unprepared groceries are tax-free, but prepared foods sold in the supermarket are taxed. A rotisserie chicken, hot pizza, deli sandwich, or bakery item sold warm is taxable. Raw chicken, cold deli meat, and uncooked bakery items are not.
Do I owe sales tax on items I buy online from out-of-state sellers?
Not at checkout, unless the seller has a physical presence in New Jersey. However, you technically owe use tax on those purchases, which you report on your state income tax return. Enforcement is limited for individual shoppers, but high-value items like vehicles are tracked when you register them.
Are prescription glasses and contact lenses taxed?
Prescription eyeglasses and contact lenses are taxed in New Jersey. The frames, lenses, and fitting are all subject to the 6.625 percent sales tax. Prescription sunglasses are also taxed.
What about tax on restaurant meals and takeout?
All restaurant meals, takeout, and prepared foods are taxed at 6.625 percent. This includes pizza, sandwiches, coffee, and any food sold ready to eat. The tax applies whether you eat in the restaurant or take the food home.