How New Jersey Sales Tax Works and What You Pay

New Jersey's sales tax is 6.625 percent on most goods and services

New Jersey charges a sales tax of 6.625 percent on the sale price of most items 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 from a seller based in New Jersey, that tax gets added to your bill at checkout.

The tax goes to the state government, not to individual cities or counties. Unlike some states, New Jersey does not allow local areas to add their own sales tax on top of the state rate. This means the rate is the same whether you shop in Newark, Atlantic City, or a small town in Sussex County.

Sales tax is a consumption tax — you pay it when you buy something, not when you earn money or own property. The seller collects the tax from you and sends it to the New Jersey Division of Taxation.

Key Takeaways

• New Jersey's sales tax rate is 6.625 percent statewide, with no local additions on top.
• Groceries, prescription medications, and most clothing under $110 per item are exempt from sales tax.
• Services like haircuts, repairs, and professional fees are generally not taxed, but labor charges on tangible goods sometimes are.
• Online purchases from out-of-state sellers may or may not be taxed depending on whether that seller has a physical presence in New Jersey.

What is and is not taxed in New Jersey

Not everything you buy is subject to the 6.625 percent rate. New Jersey exempts certain categories entirely, and the rules can be specific.

Groceries are not taxed. This includes food you cook at home — bread, milk, vegetables, meat, frozen meals, and canned goods. However, prepared food you eat right away is taxed. A sandwich from a deli counter, a hot pizza, or a drink from a coffee shop all have sales tax added. The difference is whether you are buying ingredients or a ready-to-eat meal.

Prescription medications are not taxed, but over-the-counter drugs and vitamins are. A prescription for antibiotics has no tax. Aspirin, cold medicine, and multivitamins do.

Clothing and footwear under $110 per item are exempt. If a shirt costs $85, you pay no tax. If a coat costs $150, you pay tax on the full amount. The threshold applies per item, not per purchase. Accessories like hats, gloves, and belts are taxed regardless of price.

Services are generally not taxed in New Jersey. A haircut, car repair, plumbing work, or medical visit has no sales tax. However, if you buy a tangible product as part of that service — like paint for a painting job or parts for a repair — the product itself may be taxed depending on what it is.

How sales tax applies to online and out-of-state purchases

Whether you owe sales tax on an online purchase depends on whether the seller has a physical presence in New Jersey. This includes a store, warehouse, office, or employee in the state.

If an online retailer has a warehouse or store in New Jersey, they must collect sales tax on all orders shipped to New Jersey residents, even if you order from their website. Amazon, for example, collects New Jersey sales tax because the company has fulfillment centers in the state.

If a seller has no physical presence in New Jersey, they typically do not collect sales tax on your purchase. However, New Jersey law requires you to pay use tax on items you bring into the state or have shipped to you. Use tax is the same rate as sales tax — 6.625 percent — but you pay it yourself rather than the seller collecting it. In practice, most individual shoppers do not report use tax on personal purchases, though technically the obligation exists.

This rule changed in recent years as more states required online sellers to collect tax. Check with individual retailers about their current policy, as many large sellers now collect tax in all states regardless of physical presence.

Who collects and pays the sales tax

The seller — the store, restaurant, or online company — is responsible for collecting sales tax from you and sending it to New Jersey. You do not file a separate form or send money to the state yourself as a consumer.

Sellers register with the New Jersey Division of Taxation and receive a sales tax permit. They collect tax on taxable sales, keep records, and file a return with the state monthly or quarterly depending on their sales volume. The state then uses that money for state operations.

If you are a business owner or self-employed and you sell taxable goods or services, you need to register for a permit and collect tax from your customers. That is a different process from being a consumer who pays tax.

Sales tax on specific purchases

Some purchases fall into gray areas where the rules are less obvious. Here are common scenarios:

Restaurant meals and takeout: All food and drinks you consume at a restaurant, whether you eat there or take it home, are taxed. This includes coffee, soda, and alcohol. Groceries you buy to cook at home are not.

Gas and fuel: Gasoline and diesel fuel are taxed at the pump. The tax is included in the price per gallon you see displayed.

Utilities: Electricity, natural gas, and water are not subject to sales tax in New Jersey.

Haircuts and personal services: Haircuts, manicures, and similar services are not taxed. Products you buy separately — like shampoo or nail polish — are taxed if you purchase them retail.

Vehicle purchases: Cars, motorcycles, and boats are subject to sales tax when you buy them. The tax is calculated on the purchase price and collected at the time of sale or registration.

How to understand your receipt

When you shop in New Jersey, your receipt shows the subtotal, the sales tax amount, and the total you owe. The tax line is usually labeled "Sales Tax" or "NJ Tax." You can verify the math by multiplying the subtotal by 0.06625.

If you buy a mix of taxable and non-taxable items — for example, groceries and a magazine — the store's register automatically applies tax only to the taxable items. You do not need to do anything; the cashier or online system handles it.

Keep receipts if you need them for business deductions, returns, or your records. The receipt shows what was taxed and what was not, which can be useful if you have questions about a charge.

Frequently Asked Questions

Do I pay sales tax on clothes at every store in New Jersey?

Only on items priced at $110 or more per piece. A $95 shirt has no tax; a $120 shirt does. This applies at all retailers. Accessories like belts, scarves, and hats are always taxed regardless of price.

Is there sales tax on groceries if I buy them at a convenience store?

No. Groceries are exempt at any store — supermarkets, convenience stores, or gas stations. The exemption applies to food you cook at home. Hot food, prepared sandwiches, and drinks you consume when ready are taxed.

What if I buy something online from a company with no store in New Jersey?

They typically do not collect sales tax. New Jersey law says you owe use tax on the purchase, but most consumers do not report it. If the seller does have a warehouse or office in New Jersey, they should collect tax on your order.

Are prescription glasses and contacts taxed?

Prescription eyeglasses and contact lenses are taxed. Prescription medications are exempt, but eyewear is treated as a tangible good and subject to the 6.625 percent rate.

Do I pay sales tax on a haircut or manicure?

No. Personal services like haircuts, manicures, and massage are not taxed. If you buy a product separately — like shampoo or nail polish — that product is taxed when you purchase it.