New Jersey Sales Tax Rate and What It Covers

New Jersey's sales tax is 6.625 percent, one of the lowest rates in the country. This tax applies to most goods you buy in stores, online, and through mail order — but not to groceries, prescription medications, or clothing under $110 per item.

The 6.625 percent rate is statewide and does not vary by county or municipality. When you see a price tag in a New Jersey store, that amount does not include sales tax; the tax is added at checkout. For a $100 purchase, you will pay $6.63 in tax, bringing your total to $106.63.

Some items are fully exempt from sales tax in New Jersey. These include unprepared food (raw meat, vegetables, bread), prescription drugs, medical devices prescribed by a doctor, and most clothing and footwear. Items over $110 are taxed, but the portion under $110 is not — so a $150 coat costs tax only on $40 of the purchase.

Key Takeaways

  • New Jersey's sales tax rate is 6.625 percent statewide and applies to most goods but not groceries, prescription medications, or clothing under $110.
  • Clothing and footwear under $110 per item are tax-exempt, but items over that threshold are taxed on the amount above $110.
  • Unprepared food, prescription drugs, and medical devices are exempt; prepared food and restaurant meals are taxed.
  • Online purchases from out-of-state sellers are subject to New Jersey sales tax if the seller has a physical presence or meets economic thresholds in the state.

What Is and Isn't Taxed in New Jersey

Food is the biggest category with special rules. Groceries — raw meat, produce, bread, milk, eggs — are not taxed. But prepared food is. A sandwich from a deli counter, a rotisserie chicken, or food from a restaurant is taxed at the full 6.625 percent. The line is whether the food is ready to eat when you buy it.

Clothing under $110 per item is exempt. This applies to shirts, pants, shoes, socks, and underwear. A $200 winter coat is taxed on $90 of the purchase (the amount over $110). Accessories like hats, gloves, and belts are also exempt if under $110, but jewelry and watches are always taxed regardless of price.

Services are generally not taxed in New Jersey. Haircuts, car repairs, plumbing, and labor charges do not have sales tax added. However, if you buy a product as part of that service — like paint for a painting job or parts for a repair — the product portion may be taxed.

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

If you order from an out-of-state website, New Jersey sales tax still applies if the seller has a physical location in the state or meets certain economic thresholds. Large retailers like Amazon, Walmart, and Target collect New Jersey sales tax on orders shipped to addresses in the state, even though their headquarters are elsewhere.

Smaller online sellers may not collect New Jersey sales tax at checkout. In those cases, you are technically responsible for paying the tax yourself through a mechanism called "use tax" when you file your income tax return. In practice, most individual shoppers do not report this, but the obligation exists.

Mail order and catalog purchases follow the same rule as online sales. If the company has a nexus in New Jersey — meaning a warehouse, office, or employee in the state — they must collect sales tax. If they do not, use tax applies.

Who Collects Sales Tax and Where It Goes

Retailers collect sales tax at the point of sale and send it to the New Jersey Division of Taxation. The money goes into the state's general fund and is used for schools, infrastructure, and state services. Businesses are required to register with the state and file sales tax returns monthly or quarterly, depending on their volume.

Small businesses with very low sales may file annually. The state publishes a list of registered retailers, though not all unregistered sellers are breaking the law — some operate below the threshold that triggers registration requirements.

Sales Tax on Specific Items You Buy Often

Gas and fuel are taxed at the pump in New Jersey. The state gas tax is separate from sales tax, so you pay both. Cigarettes and alcohol have additional excise taxes on top of the 6.625 percent sales tax. Lottery tickets are not subject to sales tax.

Prescription medications are never taxed, but over-the-counter drugs like aspirin and cold medicine are taxed. The difference is whether a doctor's prescription is required. Vitamins and supplements are taxed because they are not considered medications by the state.

Vehicles are taxed, but the rate and rules are different from regular sales tax. When you buy a car in New Jersey, you pay sales tax on the purchase price, but the rate may vary based on the vehicle type and your use of it. Consult the Motor Vehicle Commission for exact rates on your purchase.

How to Calculate Sales Tax on Your Purchase

To find the total cost of a taxable item, multiply the price by 1.06625. A $50 item costs $50 × 1.06625 = $53.31. For multiple items, add up the subtotal of all taxable items, then multiply by 1.06625.

If you are buying a mix of taxable and exempt items — say groceries and a shirt — only the shirt is taxed. Add the price of the shirt, multiply by 1.06625, then add the grocery total (which has no tax). This is how the register calculates it automatically.

Some receipts show the tax broken out separately so you can see exactly how much you paid. Others show only the final total. Either way, the amount is the same.

Frequently Asked Questions

Is clothing always tax-free in New Jersey?

Clothing under $110 per item is tax-free. Items over $110 are taxed on the amount above the threshold. Accessories like jewelry, watches, and belts are always taxed, even if under $110.

Do I pay sales tax on groceries?

Unprepared groceries like raw meat, produce, bread, and milk are not taxed. Prepared food — deli sandwiches, rotisserie chicken, restaurant meals — is taxed at 6.625 percent.

What is use tax and do I have to pay it?

Use tax is a tax on items you buy from out-of-state sellers who do not collect New Jersey sales tax. You are technically responsible for reporting it on your tax return, though most individuals do not. Large online retailers already collect the tax, so it does not explore to those purchases.

Are prescription drugs taxed in New Jersey?

Prescription medications are not taxed. Over-the-counter drugs like cold medicine and aspirin are taxed because they do not require a prescription. Vitamins and supplements are also taxed.

How much sales tax do I pay on a car purchase?

Vehicle sales tax in New Jersey is calculated on the purchase price, but the rate and rules depend on the vehicle type and your use. Contact the Motor Vehicle Commission or your dealer for the exact amount on your specific purchase.