New Jersey's 6.625% uniform statewide rate (no local add-ons) is offset by exemptions on both groceries and all clothing — a combination shared by few states. New Jersey's Urban Enterprise Zones (UEZs) in distressed cities offer a reduced 3.3125% rate to attract shoppers and revitalize urban retail. The average negative local rate reflects UEZ discounts.
New Jersey sales tax overview
| Component | 2026 Rate |
|---|---|
| State sales tax | 6.63% |
| Avg local add-on | -0.030% |
| Avg combined | 6.60% |
| Maximum combined | 6.63% |
Note: New Jersey exempts both clothing and groceries. Designated Urban Enterprise Zones offer reduced 3.3125% rate. Average local rate is slightly negative due to UEZs.
New Jersey sales tax by city
Combined state + local sales tax rates for major cities in New Jersey:
| City | Combined Rate |
|---|---|
| Newark | 6.63% |
| Jersey City | 6.63% |
What's exempt in New Jersey
Groceries
Exempt from New Jersey state sales tax. Local jurisdictions may still tax.
Clothing & footwear
Exempt from New Jersey sales tax.
Prescription drugs
Exempt from sales tax (typical across most states).
How New Jersey sales tax is calculated
Sales tax in New Jersey is calculated by multiplying the pre-tax purchase price by the applicable combined rate. The formula is simple:
Sales Tax = Purchase Price × 6.60% (avg combined)
Total = Purchase Price + Sales Tax
The exact rate depends on where the purchase occurs — the state base rate (6.63%) plus any local city or county add-ons. New Jersey allows local jurisdictions to add their own taxes, so the rate varies by location.
Quick calculation examples at average rate 6.60%:
$100 item
$6.60 tax
$106.60 total
$250 item
$16.50 tax
$266.50 total
$500 item
$33.00 tax
$533.00 total
$1,000 item
$66.00 tax
$1066.00 total
Additional tax-free items in New Jersey
Beyond the standard exemptions, New Jersey also provides sales tax relief on these categories:
Exemptions may have conditions. Always verify with the New Jersey Department of Revenue for complete rules.
New Jersey sales tax in context: rates, history, and neighbors
New Jersey's 6.625% statewide sales tax (since 2018, when it dropped from 6.875%) is uniform across most of the state. NJ exempts both groceries AND all clothing — making everyday shopping notably cheaper than in NY or PA. Designated Urban Enterprise Zones (UEZs) in cities like Newark, Camden, Trenton, Jersey City, and Atlantic City charge a reduced rate of 3.3125% (half the standard rate) — a unique NJ economic development incentive. The slightly negative average local rate reflects UEZ discounts pulling the population-weighted average below the state base rate. Compared to neighbors: New York (~8.52% combined NYC), Pennsylvania (~6.34% combined), Delaware (0%) — NJ's broad exemptions plus moderate rate make it consumer-friendly. NJ also has tourism taxes (Atlantic City casinos) that don't affect general retail.
Online shopping & New Jersey sales tax
New Jersey requires economic nexus — remote sellers with $100,000+ or 200+ NJ transactions must collect NJ's 6.625% sales tax. NJ is a member of the Streamlined Sales Tax (SST) Agreement. NJ also taxes digital goods including downloaded software, streaming subscriptions, and digital music at the standard rate.
Use Tax reminder: If you purchase taxable goods online from a seller who does NOT collect New Jersey sales tax, you technically owe Use Tax — the same rate as sales tax, reportable on your New Jersey state tax return. Use Tax enforcement on consumers is rare but the obligation exists for significant purchases.
How much New Jersey sales tax on common purchases?
Using New Jersey's average combined rate of 6.60%:
| Purchase | Price | Sales Tax | Total |
|---|---|---|---|
| Grocery cart | $150 | Exempt | $150.00 |
| Clothing / shoes | $120 | Exempt | $120.00 |
| Prescription drug | $80 | Exempt | $80.00 |
| Smartphone | $999 | $65.93 | $1064.93 |
| Laptop / tablet | $1,299 | $85.73 | $1384.73 |
| New car ($35,000) | $35,000 | $2310.00 | $37310.00 |
| Home appliance | $1,500 | $99.00 | $1599.00 |
| Restaurant meal | $60 | $3.96 | $63.96 |
Based on New Jersey's average combined rate of 6.60%. Exact tax depends on city/county. Use our calculator above for specific locations and amounts.
Collecting sales tax in New Jersey: business guide
If you sell goods or taxable services to New Jersey customers, here's what you need to know:
- Registration: Register for a New Jersey sales tax permit/license through the New Jersey Department of Revenue before making your first taxable sale. Most states process registrations online within a few days.
- Economic nexus (online sellers): If you have $100,000+ in New Jersey annual sales or 200+ transactions, you must collect New Jersey sales tax even without a physical presence in the state — per South Dakota v. Wayfair (2018). You must collect both state (6.63%) and applicable local rates.
- Destination vs origin sourcing: New Jersey uses destination-based sourcing for most sales — the tax rate where the buyer receives the goods applies. Always use the customer's delivery address to determine the rate.
- Filing frequency: Frequency depends on your New Jersey sales volume — monthly for high-volume sellers, quarterly or annually for low-volume sellers. Check with the New Jersey Department of Revenue for your specific filing schedule.
- Marketplace sales: If you sell through Amazon, Etsy, eBay, or similar platforms, the marketplace is required to collect and remit New Jersey sales tax on your behalf — you don't need to collect it separately on marketplace transactions.
- Resale certificates: Businesses purchasing goods for resale can provide a New Jersey resale certificate to suppliers to avoid paying sales tax on wholesale purchases. Keep copies of all resale certificates for audits.
Streamlined Sales Tax (SST): New Jersey is a full member of the Streamlined Sales Tax (SST) Agreement, which simplifies multi-state sales tax registration and compliance through a single registration portal (streamlinedsalestax.org).
New Jersey-specific business compliance details
New Jersey businesses register with the NJ Division of Taxation at nj.gov/treasury/taxation for a Sales and Use Tax registration. Filing frequency: monthly for most, quarterly for smaller, semi-annually for very small. Out-of-state sellers with $100,000+ in NJ sales (or 200+ transactions) must collect NJ tax (economic nexus, since November 2018). NJ is a Streamlined Sales Tax (SST) Agreement member. Marketplace facilitators collect NJ tax. NJ uses destination-based sourcing — but with a uniform statewide rate (except UEZs), complexity is manageable. UEZ businesses must register with their local UEZ board to charge the reduced 3.3125% rate. Penalties: 5% of unpaid tax + interest.
New Jersey sales tax frequently asked questions
What are New Jersey's Urban Enterprise Zones (UEZs) and how do they work?
New Jersey's Urban Enterprise Zones (UEZs) are designated areas in economically distressed cities (including Newark, Jersey City, Trenton, Camden) where retailers charge half the normal sales tax rate — 3.3125% instead of 6.625%. The goal is to attract shoppers to urban areas and boost local retail. Both residents and visitors pay the reduced rate when shopping in UEZ businesses. Services like dry cleaning, shoe repair, and car repair in UEZs are fully exempt (0%).
Does New Jersey tax clothing and shoes?
No — all clothing and footwear is fully exempt from New Jersey sales tax, with no price limit. Whether you're buying a $20 T-shirt or a $500 designer dress, zero sales tax applies. This makes New Jersey one of the most clothing-tax-friendly states in the Northeast, alongside Pennsylvania. Combined with the grocery exemption, NJ's zero-tax list covers two of the largest everyday spending categories.
How does New Jersey's rate compare to neighboring New York?
New Jersey charges 6.625% uniformly statewide. New York City charges 8.875% combined (4% NY state + 4.5% NYC + 0.375% MCTD). For a $500 clothing purchase: $0 in NJ (clothing exempt) vs $0 in NYC (clothing under $110/item exempt — above that you pay). For a $200 pair of shoes: $0 in NJ vs $8.10 in NYC (only the $90 over $110 threshold is taxed). NJ's broader clothing exemption saves NYC-adjacent shoppers meaningfully.