Understanding New Jersey Sales Tax

Published Tuesday 3 June 2025

Table of contents:

• How much is sales tax in New Jersey?
• New Jersey sales tax rates by county
• How to calculate New Jersey sales tax
• Sales tax exemptions in New Jersey
• Online sales tax rules for New Jersey businesses
• Use tax vs. sales tax in New Jersey
• FAQs about New Jersey sales tax

How much is sales tax in New Jersey?

As of April 2025, the New Jersey sales tax rate is 6.625% statewide. However, certain areas have reduced tax rates because they fall within New Jersey’s Urban Enterprise Zones (UEZs). Camden, Trenton and Newark are a few cities that are located within UEZs, and eligible businesses operating within these zones can charge a lower sales tax rate of 3.3125% on qualifying transactions.

If you buy a taxable item for $100 in a standard zone, for example, you would pay $6.63 in sales tax. But if you buy the same thing from a business that’s participating in a UEZ program, the tax would only be $3.31.

New Jersey sales tax rates by county

Unlike many other states, New Jersey imposes a uniform sales tax across all counties. Whether you’re in Bergen County or Ocean County, the base rate of 6.625% stays the same.

There are some exceptions to this, though, such as local and luxury taxes for areas like Atlantic City and Cape May County, as well as for certified businesses operating within UEZs. Eligible businesses that participate in UEZ programs in areas like Salem County, Essex County, and Camden County can charge a reduced rate of 3.3125%.

Review New Jersey sales tax by county for some of the most popular areas:

If you’re unsure whether your business falls within a UEZ, you can look up participating municipalities through the New Jersey Urban Enterprise Zone Authority. If your business is eligible, you may apply for a certification that allows you to charge the lower UEZ sales tax rate.

How to calculate New Jersey sales tax

To calculate New Jersey sales tax for any transaction, use this formula:

Purchase price x 0.06625 = Sales tax amount

Suppose someone buys a $250 item. Calculating sales tax would give you $250 x 0.06625 = $16.56 in sales tax. So the total amount you’d charge would be $266.56.

While New Jersey sales tax is a uniform rate across the state, certain businesses located in UEZ areas may qualify to charge reduced rates. Use a sales tax calculator for New Jersey to look up tax rates, including luxury taxes, UEZ reduced rates, and any other special rates for your location for more information on what to expect.

Need help calculating sales tax in New Jersey?

Use Avalara’s New Jersey sales tax calculator to find accurate rates by location and stay compliant with state requirements.

Sales tax exemptions in New Jersey

New Jersey offers several exemptions to its state sales tax, which can benefit both consumers and certain businesses. Understanding these exemptions helps ensure compliance while also preventing overpayment of taxes. The following categories are typically exempt from New Jersey sales tax:

• Most clothing and footwear: Everyday apparel like shirts, pants, dresses, and shoes are tax-exempt, but accessory items like jewelry or handbags, protective clothing, and sports equipment are still taxable.
• Unprepared food: Groceries like fruits, vegetables, meats, dairy products, and other uncooked foods aren’t subject to sales tax. Prepared foods like hot meals from a deli or restaurant are generally taxable.
• Prescription and some non-prescription medicine: Medications that a licensed practitioner prescribes are exempt from New Jersey sales tax. Some over-the-counter meds, such as insulin and certain medical supplies, may also be exempt if they meet certain criteria.

Exempt organizations

Sales to nonprofit organizations, government agencies, and certain educational institutions may also be exempt from New Jersey sales tax, but this exemption isn’t automatic. To qualify, businesses must:

• Register with the New Jersey Division of Taxation for certificate of exemption
• Present the certificate of exemption at the time of purchase and file Form ST-5

Only state-recognized organizations that hold a valid ST-5 certificate are eligible for tax-exempt purchases. If a business misuses or doesn’t collect the proper documentation, it could face fines or legal penalties.

Proper documentation

In New Jersey, nonprofits are responsible for collecting and maintaining the right documentation as evidence that supports the tax-exempt status of their transactions. Proper documentation should include :

• Completed and signed exemption certificates, such as ST-3, ST-4, ST-5
• Records of each exempt sale, with dates, items sold, and buyer details
• Keeping these documents for at least three years in case of a state audit

If nonprofit organizations don’t present valid exemption certificates at the time of sale, sellers should charge sales tax, even if the buyer claims to be exempt. Ultimately, the burden of proof is up to the seller, so accurate documentation is vital.

Online sales tax rules for New Jersey businesses

Online shopping has become more common than ever, making online sales tax in New Jersey an important consideration for remote sellers. Even if your business is located in another state, if you sell online to New Jersey customers, the state sales tax would apply.

Economic nexus in New Jersey

Since New Jersey imposes a uniform rate across all counties, there aren’t any local or county nexus rules for collecting and remitting sales tax. Each county follows the state economic nexus rule, where out-of-state sellers must collect and remit business sales tax for New Jersey if:

• They make more than $100,000 in revenue from sales to New Jersey customers, or
• They make 200 or more separate transactions in the state

Check with the NJ Division of Taxation for additional information and what applies to online sales in the state.

Marketplace facilitators

Platforms like Amazon, Etsy, and eBay are considered marketplace facilitators and collect and remit sales taxes on behalf of third-party sellers.

If you sell through your own website or direct channels, you're responsible for handling your business’s New Jersey sales tax compliance. However, if you sell through a platform like Etsy or eBay then the platform will collect sales tax on your behalf.

Do you sell remotely? Learn more about your responsibilities with the New Jersey Division of Taxation remote seller FAQs and get accurate tax estimates with a New Jersey state tax calculator.

Use tax vs. sales tax in New Jersey

Sales tax and use tax in New Jersey both apply to taxable purchases, but in different scenarios. While sales tax is collected by the business or seller on purchases made within New Jersey, use tax applies when New Jersey sales tax wasn't collected. Common transactions that use tax would apply to include:

• Out-of-state purchases that businesses ship to New Jersey
• Any online order where sales tax wasn’t charged
• Purchases from a state with a lower tax rate

If you purchase and use taxable goods in New Jersey but aren’t charged tax at the point of sale, you’re responsible for reporting and paying a use tax.

FAQs about New Jersey sales tax

1. Do I need a sales tax permit to sell in New Jersey?

Yes. Businesses in New Jersey that sell taxable goods or services must register for a New Jersey Sales Tax Certificate of Authority before collecting tax. You can register online through the New Jersey Division of Revenue and Enterprise Services.

2. Are digital products taxable in New Jersey?

Yes. Most digital products like eBooks, movies, music downloads, and prewritten software are subject to sales tax in New Jersey, as long as they are electronically delivered.

3. Is shipping taxable in New Jersey?

Shipping charges may be taxable if they’re part of the sale and not separately stated. If the shipping cost is separate from the item price, or the item is exempt from sales tax, then the shipping fee is also exempt from sales taxes.

4. Do freelancers or service-based businesses need to charge sales tax?

Not usually, as most professional and personal services aren’t subject to sales tax in New Jersey. But services that involve repairing, installing, or generally maintaining tangible personal property may be taxable. Auto repair services, for example, would be taxable.

5. How often do I need to file sales tax returns?

The state assigns your filing frequency based on your estimated annual taxes. Most businesses file either monthly or quarterly. After registering, you should get a notification from the Division of Taxation with your assigned filing schedule. Typically, businesses that collect more than $500 per month in sales tax file monthly, while businesses that collect less than $500 per month in sales tax are permitted to file quarterly.

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