New Jersey Sales Tax Rates and What They Apply To

New Jersey's Sales Tax Rate

New Jersey has a 6.625% sales tax on most retail purchases. This is the statewide rate that applies when you buy taxable goods at a store, online, or through mail order. The rate is uniform across all counties — you pay the same percentage whether you shop in Bergen County, Atlantic County, or anywhere else in the state.

Unlike some states, New Jersey does not allow municipalities to add local sales taxes on top of the state rate. What you see at checkout is what you pay, with no additional county or city tax layered on.

Key Takeaways

• New Jersey's statewide sales tax is 6.625% and applies the same way in every county.
• 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 taxable goods sometimes are.
• Online purchases from out-of-state sellers are subject to New Jersey sales tax if the seller has a physical presence in the state.

What Is and Isn't Taxed in New Jersey

Not everything you buy is subject to the 6.625% rate. Groceries — food you prepare at home — are exempt. This includes bread, milk, vegetables, meat, and canned goods. However, prepared foods, restaurant meals, and items like candy, soda, and hot foods are taxed.

Prescription medications are also exempt from sales tax. Over-the-counter medicines like aspirin or cold medicine are taxed, but prescriptions filled by a pharmacist are not.

Clothing and footwear under $110 per item are exempt. A shirt that costs $80 is tax-free. A pair of shoes for $105 is tax-free. But a winter coat for $150 is taxed on the full amount. Accessories like belts, hats, and gloves are taxed regardless of price.

Most services are not taxed — haircuts, car repairs, plumbing work, and medical visits do not have sales tax added. However, if you buy a taxable product as part of a service (like parts in a repair job), the parts may be taxed depending on how the business structures the charge.

When You Pay Sales Tax on Services and Labor

The line between a service and a taxable sale can be unclear. If you take your car to a mechanic and they charge you $200 for labor and $100 for parts, the parts are usually taxed but the labor is not. The total bill would be $300 plus $6.63 in tax (6.625% of the $100 parts).

Some services bundled with products are taxed as a single transaction. For example, if a florist charges you one price for flowers and delivery together, the entire charge may be taxed. If they separate the flower cost from the delivery fee, only the flowers are taxed. Always ask the business how they are breaking down the charge if you want to know the exact tax.

Sales Tax on Online and Out-of-State Purchases

When you order from an online retailer, you owe New Jersey sales tax if that retailer has a physical presence in the state — a warehouse, office, or employee location. Large retailers like Amazon, Walmart, and Target have operations in New Jersey, so they collect and send the 6.625% tax to the state.

If you order from a small seller with no physical presence in New Jersey, they are not required to collect the tax at checkout. However, you are technically responsible for paying it yourself through a use tax when you file your state income tax return. In practice, most individual shoppers do not report this, but the obligation exists.

The same rule applies to mail orders and phone orders. If the company ships from a New Jersey location or has a New Jersey office, they collect sales tax. If they ship from out of state and have no New Jersey presence, they typically do not.

Special Sales Tax Situations

Resale certificates allow businesses to buy goods without paying sales tax if they plan to resell them. A retail store buying inventory from a wholesaler uses a resale certificate to avoid tax on that purchase. The tax is paid later when the customer buys the finished product. This is not available to individual consumers.

Temporary sales tax holidays do not exist in New Jersey the way they do in some other states. There is no back-to-school tax-free week or holiday shopping period. The 6.625% rate applies year-round on taxable items.

Trade-in allowances on items like cars or appliances reduce the taxable amount. If you trade in a used car worth $5,000 toward a new car priced at $20,000, you pay sales tax only on the $15,000 difference, not the full purchase price.

How Sales Tax Appears on Your Receipt

When you check out at a store or online, the sales tax is calculated on the subtotal of taxable items only. If your cart has a $50 shirt (taxed), a $30 book (taxed in New Jersey), and a $20 gallon of milk (not taxed), the tax is applied only to the $80 in taxable goods. Your receipt will show the subtotal, the tax amount, and the total due.

Some receipts break down which items are taxed and which are not. Others show a single tax line. Either way, the math should reflect 6.625% of only the taxable portion of your purchase.

Frequently Asked Questions

Do I pay sales tax on groceries in New Jersey?

No, unprepared groceries like milk, bread, vegetables, and meat are exempt. Prepared foods, restaurant meals, candy, soda, and hot foods are taxed. If you are unsure whether an item counts as a grocery, the receipt will show whether tax was charged.

Is clothing always tax-free in New Jersey?

Clothing and footwear under $110 per item are tax-free. Items over $110 are taxed on the full price. Accessories like belts, scarves, and hats are taxed regardless of cost. The $110 threshold applies to each individual item, not your total purchase.

Do I owe sales tax on items I buy from someone in another state?

If the seller has a physical location in New Jersey, they must collect 6.625% sales tax. If they have no New Jersey presence, they typically do not collect it, but you may owe use tax on your state income tax return. Most individual shoppers do not report this, though the obligation technically exists.

Are haircuts and repairs taxed in New Jersey?

No, services like haircuts, car repairs, and plumbing are not subject to sales tax. However, if the service includes taxable products (like parts in a repair), those parts may be taxed separately depending on how the business structures the invoice.

What is the difference between sales tax and use tax?

Sales tax is collected by the seller at the point of purchase. Use tax is a tax you owe on items you buy from out-of-state sellers who do not collect sales tax. It is the same rate (6.625%) and is meant to level the playing field between local and remote purchases. You report it on your state income tax return.