What is the New Jersey sales tax rate in 2025?+
The New Jersey state sales tax rate in 2025 is 6.625%. This rate has been in effect since January 1, 2018, when NJ reduced it from 7% as part of a transportation funding deal. Unlike states such as California or Texas, New Jersey does not allow local municipalities to add their own sales taxes on top of the state rate, so the rate is uniform across the state outside of Urban Enterprise Zones.
What is the Urban Enterprise Zone (UEZ) rate in New Jersey?+
The UEZ rate is 3.3125%, exactly half the standard 6.625% rate. Urban Enterprise Zones are designated economically distressed areas where certified retailers can charge the reduced rate to attract shoppers and stimulate local economies. Major UEZ cities include Newark, Camden, Trenton, Elizabeth, Plainfield, Irvington, Bridgeton, Millville, and Salem. Businesses must register and be approved as UEZ participants to apply the lower rate.
Are groceries taxed in New Jersey?+
Most unprepared food and groceries for home consumption are exempt from New Jersey sales tax. This covers fresh produce, meat, dairy, bread, canned goods, and packaged snacks. Prepared food such as restaurant meals, hot deli items, and catered food is fully taxable at 6.625%. Beverages that are not water or not primarily juice may also be taxable depending on the product category.
Is clothing taxable in New Jersey?+
Most clothing and footwear are exempt from New Jersey sales tax. The exemption covers standard apparel worn on the body including shirts, pants, shoes, coats, dresses, and athletic wear. Exceptions include formal wear rentals, fur clothing (costing more than $175), and accessories not worn on the body such as handbags and wallets. This exemption makes NJ a popular shopping destination for residents of neighboring taxable-clothing states like Pennsylvania.
How do I remove NJ sales tax from a tax-inclusive price?+
To find the pre-tax price from a total that includes NJ 6.625% tax, divide the total by 1.06625. For example, $213.25 divided by 1.06625 equals exactly $200.00 pre-tax. The tax portion is $13.25. Never subtract 6.625% directly from the total because the tax was calculated on the net price, not the gross. This calculator's Remove Tax mode performs this calculation automatically.
Are prescription drugs taxed in New Jersey?+
No. Prescription drugs are fully exempt from New Jersey sales tax. Most over-the-counter medications that are defined as drugs (items intended to treat, cure, or prevent a disease or condition) are also exempt. Common OTC products like aspirin, cold medicine, antacids, and allergy relief are not taxed. Vitamins and supplements are generally taxable unless prescribed by a physician.
Does New Jersey tax digital products and streaming services?+
Yes. New Jersey taxes most digital products and electronically delivered software. This includes streaming video services, streaming music, downloaded software, and prewritten applications delivered over the internet. The taxable classification covers subscriptions that provide access to digital content. Custom software written specifically for one customer is generally exempt as a professional service under NJ law.
How much NJ sales tax do I pay on a $500 electronics purchase?+
Electronics are fully taxable in New Jersey at the standard 6.625% rate. On a $500 purchase you would pay $33.13 in NJ sales tax for a total of $533.13. If you purchase from a certified UEZ retailer in a qualifying city, the 3.3125% rate applies and you pay only $16.56 in tax for a total of $516.56, saving $16.56 compared to the standard rate.
Is there sales tax on cars in New Jersey?+
Yes. Motor vehicle purchases in New Jersey are subject to a 6.625% sales tax collected by the NJ Motor Vehicle Commission at registration. The tax is based on the purchase price or fair market value, whichever is higher. Trade-in credits can reduce the taxable base. NJ also charges additional title and registration fees on top of the sales tax. Leased vehicles are taxed on the monthly lease payment rather than the full vehicle value.
How does NJ sales tax compare to neighboring states?+
New Jersey at 6.625% is lower than New York City (8.875% combined), Pennsylvania's Philadelphia rate (8%), and Connecticut (6.35%). Delaware has no sales tax at all, making it the most tax-advantaged neighboring state for major purchases. New York's state-only rate is 4% but NYC adds 4.875%. For shoppers near the Delaware Valley, crossing into Delaware can save 6.625% on big-ticket items like furniture or appliances.
What is NJ use tax and when do I owe it?+
Use tax is the counterpart to sales tax. If you buy a taxable item from an out-of-state seller who does not collect NJ sales tax and you bring or ship the item to New Jersey, you owe NJ use tax at the same 6.625% rate. For example, buying furniture from a Delaware dealer who ships to your NJ home triggers use tax. Residents are required to report unpaid use tax on their NJ-1040 annual state tax return, though individual enforcement is limited.
What items are fully exempt from New Jersey sales tax?+
Key NJ sales tax exemptions include: most unprepared groceries for home consumption, prescription and qualifying OTC drugs, most clothing and footwear, residential energy (gas, electricity, heating oil), agricultural products, manufacturing equipment used directly in production, newspapers and most magazines, and sales to qualified exempt organizations such as non-profits and government entities. Businesses should use Form ST-4 (exempt use certificate) or Form ST-5 (exempt organization certificate) to document tax-exempt purchases.