New Jersey's sales tax rate and what it covers
New Jersey has a 6.625% sales tax on most goods and services you buy in the state. This is the statewide rate that applies everywhere in New Jersey. When you buy something at a store, restaurant, or online retailer shipping to New Jersey, this tax gets added to your bill at checkout.
The tax applies to tangible personal property — things you can touch and take home — and to certain services. Clothing and footwear under $110 per item are exempt, which is a major difference from most other states. Groceries for home consumption are also exempt. But prepared food, restaurant meals, and most services like haircuts, repairs, and professional fees are taxed.
Some items have their own rules. Gasoline has an additional excise tax on top of sales tax. Cigarettes and vaping products have a separate tax. Prescription medications are exempt, but over-the-counter drugs and vitamins are taxed. If you are unsure whether a specific item is taxed, the New Jersey Division of Taxation website has a searchable database of taxable and exempt items.
Key Takeaways
- New Jersey's statewide sales tax is 6.625% and applies to most goods and many services at the point of sale.
- Clothing and footwear under $110 per item are exempt from sales tax, as are groceries purchased for home consumption.
- Prepared food, restaurant meals, and most services like haircuts and repairs are subject to the full 6.625% sales tax.
- Online purchases shipped to New Jersey are subject to sales tax, and the retailer collects it at checkout just as a physical store would.
What is and is not taxed in New Jersey
Understanding what gets taxed helps you predict what you will pay. Taxable items include clothing and footwear over $110, furniture, electronics, appliances, books, toys, and most household goods. Services that are taxed include dry cleaning, car repairs, haircuts, landscaping, and plumbing work. Prepared food — anything cooked or ready to eat — is taxed, including deli sandwiches, pizza, coffee, and bakery items.
Exempt items are longer to list but matter for your budget. Groceries for home preparation are not taxed: milk, bread, vegetables, meat, cereal, and canned goods all escape the tax. Prescription medications are exempt. Clothing and footwear under $110 per item are exempt — this means a $109 pair of shoes is not taxed, but a $111 pair is. Medical equipment like wheelchairs, crutches, and hearing aids are exempt. Newspapers and magazines are exempt. Diapers and feminine hygiene products are exempt.
The $110 clothing threshold applies per item, not per purchase. If you buy five shirts at $20 each, none are taxed. If you buy one coat for $150, the entire $150 is taxed. The price tag before any discount is what counts — if a $120 shirt is on sale for $80, it is still over the $110 threshold and is taxed on the $80 sale price.
How sales tax works when you shop online
If you order something online and have it shipped to a New Jersey address, the retailer must collect New Jersey sales tax at checkout. This applies whether the retailer is based in New Jersey or anywhere else in the country. The tax rate depends on where the item is being delivered within the state — most places use 6.625%, but a few municipalities have added local taxes that raise the rate slightly.
When you see the final price on an online order, the sales tax should already be included in the total before you pay. You do not have to calculate it yourself or pay it separately later. If a retailer does not collect sales tax at checkout, you are not responsible for paying it to the state — the retailer is responsible for remitting it.
Some older online retailers may not have systems in place to collect New Jersey sales tax. If this happens, the retailer is breaking the law, not you. You do not owe the state any back tax on personal purchases. However, if you are a business owner buying items for resale or business use, the rules are different and you may need to file a sales tax return.
Local sales tax variations in New Jersey
While the statewide rate is 6.625%, a small number of New Jersey municipalities have added a local sales tax on top of that. These local taxes are rare and explore only in specific cities. The combined rate in those areas can be as high as 7.625% or slightly higher, depending on the municipality.
When you shop in person, the register automatically applies the correct rate for that location. When you shop online, the retailer's system should detect your delivery address and explore the right rate. If you live in one of the few areas with a local tax and the online checkout shows only 6.625%, contact the retailer's customer service to report the error.
The municipalities with local sales taxes change occasionally as towns vote to add or remove them. If you want to know the exact rate for your address, call your municipal tax assessor's office or check the New Jersey Division of Taxation website, which lists current rates by municipality.
Sales tax on services and labor
Services are taxed in New Jersey if they involve labor performed on tangible property or the transfer of a service. A haircut is taxed because it is a service performed on you. Car repair is taxed because the mechanic is performing labor on your vehicle. Dry cleaning is taxed because the cleaner is performing a service on your clothes. Plumbing, electrical work, landscaping, and home repair are all taxed.
Professional services are generally not taxed. Legal information, accounting, consulting, and medical services are exempt. However, if a professional provides a tangible product as part of the service — such as a dentist providing a crown or a doctor prescribing medication — the product portion may be taxed depending on the situation.
Labor and materials are often billed separately on an invoice. The materials portion is taxed as a sale of goods. The labor portion is taxed as a service. When you receive a bill from a contractor, the sales tax should be clearly shown as a line item so you can see what portion of your bill is tax.
Who collects and pays New Jersey sales tax
The retailer or service provider collects sales tax from you at the point of sale. They then hold that money and remit it to the New Jersey Division of Taxation on a regular schedule — usually monthly or quarterly, depending on the business's size and sales volume. You do not send sales tax directly to the state; the business does.
As a consumer, your only responsibility is to pay the tax when you are asked. You do not file a sales tax return unless you own a business. If you own a business and sell taxable items or services, you must register for a sales tax permit with the New Jersey Division of Taxation and file returns showing what you collected and what you owe.
If a retailer fails to collect sales tax or fails to remit it to the state, that is the retailer's problem, not yours. You are not liable for back taxes on personal purchases. However, if you are a business owner and do not collect or remit sales tax when required, you can face penalties and interest.
Frequently Asked Questions
Do I have to pay sales tax on clothes under $110?
No. Clothing and footwear under $110 per item are exempt from New Jersey sales tax. The price tag before any discount determines whether an item qualifies. A $109 shirt is not taxed; a $111 shirt is taxed on the full sale price, even if it is on sale.
Are groceries taxed in New Jersey?
Groceries purchased for home consumption are not taxed. This includes milk, bread, vegetables, meat, cereal, canned goods, and frozen foods. However, prepared food — anything cooked or ready to eat — is taxed. A rotisserie chicken from the grocery store is taxed; a raw chicken is not.
What is the sales tax on restaurant meals?
Restaurant meals and prepared food are subject to the full 6.625% sales tax, plus any local tax in your municipality. This applies to dine-in meals, takeout, delivery, and food from delis and bakeries. The tax is added to your bill before you pay.
Do I owe sales tax on items I buy from out-of-state online retailers?
If the item is shipped to a New Jersey address, yes. The retailer must collect New Jersey sales tax at checkout, regardless of where the retailer is located. If a retailer does not collect the tax, the retailer is responsible for remitting it to the state, not you.
Is sales tax added to the price shown online before checkout?
No. The price shown on the product page is usually before tax. Sales tax is calculated and added when you enter your delivery address at checkout. The final total you pay includes the tax.