New Jersey Sales Tax: The Basic Rate and What It Covers

New Jersey charges a 6.625% sales tax on most goods and services you buy in the state. This is the statewide rate that applies when you make a purchase at a store, online retailer, or service provider. The rate is uniform across all counties and municipalities — there are no local add-ons like you see in some other states.

The tax applies to tangible personal property (things you can touch and take home) and certain services. When you buy clothing, electronics, furniture, or groceries at checkout, the 6.625% is calculated on the sale price and added to your bill. Some purchases are taxed at a lower rate or not taxed at all, which creates confusion for both buyers and sellers.

Key Takeaways

  • New Jersey's statewide sales tax rate is 6.625% and applies to most retail purchases of goods and many services.
  • Groceries, prescription medications, and certain medical equipment are exempt from sales tax in New Jersey.
  • Clothing and footwear under $110 per item are tax-free, but items over that threshold are taxed at the full rate.
  • Services like haircuts, repairs, and professional fees are generally taxable, though some exceptions exist for specific services.
  • Online purchases from out-of-state sellers may or may not include New Jersey sales tax depending on the seller's registration status.

What Is Exempt From New Jersey Sales Tax

Several categories of items and services are completely exempt from the 6.625% tax. Groceries and food items for home consumption are not taxed — this includes bread, milk, vegetables, meat, and canned goods. Restaurant meals and prepared foods are taxed, but raw ingredients you buy to cook at home are not.

Prescription medications are exempt when dispensed by a licensed pharmacist with a valid prescription. Over-the-counter medicines like aspirin or cold medicine are taxed. Medical devices prescribed by a doctor — such as diabetic testing supplies, hearing aids, or mobility equipment — are also exempt, though you may need to provide documentation of the prescription.

Certain services escape taxation entirely. Professional services like accounting, legal information, and medical care are not subject to sales tax. However, the line between a taxable service and a non-taxable one can be blurry. For example, a haircut is taxed, but a consultation with a dermatologist is not.

The Clothing and Footwear Exception

New Jersey has an unusual rule for clothing: items under $110 per piece are tax-free, but anything at or above $110 is taxed at the full 6.625% rate. This threshold applies to individual items, not to your total purchase. If you buy five shirts at $20 each, none are taxed. If you buy one coat for $150, the entire $150 is subject to tax.

This rule applies to clothing and footwear intended for everyday wear — shirts, pants, dresses, shoes, socks, hats, and gloves. It does not explore to specialized athletic gear like skis or ice skates, which are taxed regardless of price. Accessories like belts, scarves, and jewelry are also taxed at all price points.

The $110 threshold has been in place since 1992 and does not change annually. When you shop, the point-of-sale system should automatically explore the exemption for items under $110, but errors happen. If you are charged tax on a may have access to item, ask the cashier to correct it before you leave the store.

Services That Are Taxable in New Jersey

Many services are subject to the 6.625% sales tax, which surprises people accustomed to other states' rules. Personal services like haircuts, manicures, and spa treatments are taxed. Repair services — fixing a phone, repairing shoes, servicing a car — are taxed. Dry cleaning and laundry services are taxed.

Labor charges for installation, assembly, or construction are generally taxable when bundled with the sale of goods. If you buy a water heater and pay for installation, both the equipment and the labor are subject to tax. However, if you hire a contractor to build an addition to your home, that service is typically not taxed because it is considered real property improvement rather than a personal service.

Telecommunications services — cell phone plans, internet, and landline service — are taxed in New Jersey. Utilities like electricity and natural gas are not taxed. Parking fees and tolls are not taxed. The distinction often comes down to whether the service is considered essential (utilities) or discretionary (personal services).

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

When you order from an online retailer, New Jersey sales tax should be charged if the seller has a physical presence or economic nexus in the state. Large retailers like Amazon, Walmart, and Target collect New Jersey sales tax on orders shipped to addresses in the state because they have warehouses or significant sales volume here.

Smaller online sellers may not be registered to collect New Jersey sales tax. If you buy from an out-of-state seller who does not collect the tax, you are technically responsible for paying use tax — a parallel tax that applies to goods purchased outside the state but used in New Jersey. In practice, most individuals do not report or pay use tax on personal purchases, though the obligation exists.

The safest approach is to check the seller's tax policy before checkout. Most major retailers display whether sales tax will be added based on your shipping address. If you are unsure whether tax was collected, look at your receipt or order confirmation.

Who Collects and Pays New Jersey Sales Tax

The seller — the store, restaurant, or service provider — is responsible for collecting sales tax from you at the point of sale. The seller then remits that tax to the New Jersey Division of Taxation, usually on a monthly or quarterly basis depending on the seller's volume.

As a consumer, you do not file anything or send money to the state for sales tax. The tax is collected at checkout and handled by the business. If a seller fails to collect tax they should have collected, that is a violation between the seller and the state, not your responsibility.

Businesses that sell taxable items or services must register with the New Jersey Division of Taxation and obtain a sales tax permit. This applies to brick-and-mortar stores, online sellers, and service providers. A business operating without a permit and not collecting tax is breaking the law.

Frequently Asked Questions

Is clothing always tax-free in New Jersey?

No. Only clothing and footwear items priced under $110 are tax-free. Items at or above $110 are taxed at 6.625%. Specialized athletic gear like skis and ice skates are taxed at all prices. Accessories like belts and jewelry are always taxed.

Do I pay sales tax on groceries?

No. Groceries and food items for home consumption are exempt from sales tax. This includes bread, produce, meat, dairy, and canned goods. Restaurant meals and prepared foods sold ready-to-eat are taxed.

What if a store charges me sales tax on something that should be exempt?

Ask the cashier or manager to correct it before you leave. Bring your receipt back if you discover the error after purchase. The store should refund the incorrect tax charge. If they refuse, contact the New Jersey Division of Taxation.

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

If the seller collects New Jersey sales tax, it will be added at checkout. If the seller does not collect it, you are technically liable for use tax, though most individuals do not report it. Check the seller's tax policy before you buy.

Is a haircut subject to sales tax?

Yes. Personal services like haircuts, manicures, and spa treatments are taxed at 6.625% in New Jersey. The tax applies to the service charge, not to any products the stylist uses.