New Jersey Sales Tax Rate and What It Covers

New Jersey charges a 6.625% sales tax on most goods you buy in stores or online. This is one of the lower rates in the country — some states charge 7% or more. The tax is added at checkout and goes to the state, not to individual towns or cities.

The tax applies to clothing, electronics, furniture, groceries (with exceptions), and most other items. However, New Jersey has specific rules about what is taxed and what is not. Understanding these rules helps you know what to expect when you pay.

Key Takeaways

  • New Jersey's sales tax rate is 6.625% and applies to most retail purchases, including clothing and electronics.
  • Groceries, prescription medications, and medical equipment are generally not taxed in New Jersey.
  • Online purchases from out-of-state sellers are taxed the same way as in-store purchases if the seller has a physical presence in New Jersey.
  • Some items like prepared foods, alcohol, and gasoline have different tax rules or additional taxes on top of the standard rate.
  • You do not pay sales tax on services like haircuts, repairs, or professional consultations unless a product is also sold.

Items That Are Not Taxed in New Jersey

New Jersey does not tax groceries — items you buy to cook at home like bread, milk, vegetables, and meat. This is a major difference from many other states. However, prepared foods and items you eat in a restaurant or buy ready-to-eat are taxed.

Prescription medications are also tax-free in New Jersey. Over-the-counter medicines like aspirin or cold medicine are taxed, but anything you need a prescription for is not. Medical equipment like wheelchairs, canes, and diabetic supplies are generally not taxed either.

Clothing and footwear under $110 per item are not taxed in New Jersey. If a single piece of clothing costs $110 or more, the entire purchase is taxed. This rule applies to items like coats, shoes, and pants, but not to accessories like hats, belts, or scarves, which are always taxed.

Items With Higher Tax Rates or Extra Taxes

Some items in New Jersey have taxes beyond the standard 6.625% rate. Gasoline has an additional state excise tax on top of sales tax. Alcohol — beer, wine, and liquor — is taxed at the standard rate, but you also pay a separate alcohol tax that varies by type.

Cigarettes and vaping products have a state excise tax added to the price. These taxes change periodically, so the total you pay at the register is higher than the base sales tax alone. Prepared foods and restaurant meals are taxed at the standard 6.625% rate.

How Sales Tax Works on Online and Out-of-State Purchases

If you order from an online retailer that has a warehouse, office, or other physical location in New Jersey, you pay New Jersey sales tax. This includes major retailers like Amazon (which has fulfillment centers in the state). The tax is calculated based on your delivery address in New Jersey.

If you order from a seller with no physical presence in New Jersey, you may not see sales tax added at checkout. However, New Jersey law requires you to pay a "use tax" on those purchases — it is the same rate as sales tax and covers items you bring into the state or have delivered here. Most people do not pay use tax voluntarily; it is typically only collected if you are audited or if you report it on your state tax return.

Services and What Gets Taxed

Services like haircuts, car repairs, plumbing, and medical visits are not taxed in New Jersey. However, if you buy a product as part of that service — like hair dye at a salon or parts at a repair shop — the product itself may be taxed.

Professional services such as accounting, legal information, and consulting are not taxed. Gym memberships and entertainment tickets are also not subject to sales tax. The key difference is whether you are paying for labor and informed (not taxed) or for a physical item (taxed).

Who Collects Sales Tax and Where It Goes

Retailers and businesses collect sales tax from you at the point of sale. They then send that money to the New Jersey Division of Taxation, which is part of the state Department of the Treasury. The revenue goes into the state general fund and supports schools, roads, and other public services.

Businesses are responsible for collecting the correct amount and filing it with the state on a regular schedule — usually monthly or quarterly, depending on how much tax they collect. If a business fails to collect or send in sales tax, the state can pursue them for the unpaid amount plus penalties.

How to Calculate Sales Tax on Your Purchase

To estimate the sales tax on a taxable item, multiply the price by 0.06625. For example, a $100 item would have $6.63 in sales tax, bringing the total to $106.63. Most retailers calculate this automatically at checkout, so you see the final price on your receipt.

Keep in mind that the tax rate is the same statewide — there are no local sales taxes added on top in New Jersey. This makes it simpler than states where cities or counties add their own tax. The 6.625% rate applies whether you shop in Newark, Atlantic City, or any other part of the state.

Frequently Asked Questions

Do I pay sales tax on groceries in New Jersey?

No. Groceries — items you buy to cook at home — are not taxed in New Jersey. This includes bread, milk, vegetables, meat, and canned goods. However, prepared foods like deli items, hot foods, and restaurant meals are taxed at the standard rate.

Is clothing always tax-free in New Jersey?

Clothing and footwear under $110 per item are tax-free. If a single piece costs $110 or more, the entire purchase is taxed. Accessories like hats, belts, and scarves are always taxed, even if they cost less than $110.

Do I owe tax on items I buy online from out-of-state sellers?

If the seller has no physical presence in New Jersey, sales tax is usually not charged at checkout. However, New Jersey law requires you to pay use tax on those purchases — it is the same rate as sales tax. Most people do not pay it unless audited or they report it on their tax return.

Are prescription medications taxed in New Jersey?

No. Prescription medications are not taxed. Over-the-counter medicines like aspirin and cold medicine are taxed at the standard rate. Medical equipment like wheelchairs and diabetic supplies are also generally not taxed.

What is the total tax on gasoline in New Jersey?

Gasoline has the standard 6.625% sales tax plus an additional state excise tax. The excise tax rate changes periodically, so the total varies. Check the New Jersey Division of Taxation website for the current combined rate.