New Jersey's current sales tax rate

New Jersey charges 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 has been in place since 2006 and does not vary by county or municipality — it is the same whether you shop in Newark or Cape May.

The 6.625% rate is lower than the national average. Some states charge 7% or higher, and a few charge nothing at all. New Jersey's rate sits in the middle range, though what matters more to your wallet is what the state actually taxes, since many common purchases are exempt.

Key Takeaways

  • New Jersey's statewide sales tax is 6.625% and applies to most tangible goods you buy in stores or online.
  • Groceries, prescription medications, and most clothing under $110 per item are exempt from sales tax in New Jersey.
  • Services like haircuts, repairs, and restaurant meals are taxed, though prepared food has its own rules.
  • The tax applies to your purchase price before any discounts or coupons are subtracted.

What is and is not taxed in New Jersey

New Jersey exempts unprepared food — meaning groceries you cook at home. Bread, milk, vegetables, meat, and frozen dinners all avoid the tax. But prepared food does not: restaurant meals, deli counter items, and food from a hot bar are taxed at the full 6.625% rate.

Prescription medications are also exempt, whether you buy them at a pharmacy or through mail order. Over-the-counter drugs like aspirin or cold medicine are taxed. Clothing and footwear under $110 per item are exempt — a pair of jeans for $89 is tax-free, but a winter coat for $150 is taxed on the full amount. The $110 threshold applies per item, not per transaction.

Services are generally taxed. A haircut, car repair, plumbing work, or house cleaning all trigger the 6.625% tax. Digital goods like e-books, streaming subscriptions, and downloaded software are taxed. Gasoline at the pump is taxed, as are utilities like electricity and natural gas.

How the tax is calculated at checkout

The sales tax is calculated on the subtotal before coupons or discounts are applied. If you buy a $50 item with a $10 coupon, you pay tax on $40, not $50. However, if you use a manufacturer's coupon (one that comes from the company, not the store), the store may calculate tax on the full price and then explore the coupon — the rules vary by retailer, so ask at checkout if you are unsure.

Online purchases from out-of-state sellers have become taxable in New Jersey. If you order from Amazon, Walmart, or another major retailer, the tax is usually added automatically at checkout, even if the seller is based elsewhere. Smaller sellers may not collect it, in which case you technically owe the tax yourself when you file your state income tax return — though few people do.

Clothing and footwear exemptions explained

The $110 per-item clothing exemption is one of New Jersey's most useful tax breaks, but it has specific boundaries. The exemption covers clothing, footwear, and certain accessories like belts, scarves, and gloves. It does not cover jewelry, handbags, or sports equipment.

The $110 limit applies to the price of a single item before any discount. A $120 winter coat is fully taxed. A $100 coat is fully exempt. A $110 coat is exempt. If a store marks down a $150 coat to $100, you pay no tax on the $100 sale price. The exemption is generous enough that most everyday clothing purchases avoid tax entirely.

Restaurant meals and prepared food

Any food served hot or ready to eat is taxed. This includes restaurant meals, takeout from a deli, pizza, rotisserie chicken, and items from a hot food bar. The tax applies whether you eat in the restaurant or take the food home. A sandwich from a deli counter is taxed; a loaf of bread from the grocery shelf is not.

Some borderline items depend on how they are sold. A frozen pizza you buy from the grocery freezer is not taxed. A hot pizza from a pizzeria is taxed. A bakery cake from the grocery store bakery section is usually taxed because it is considered prepared food, while a packaged cake from the shelf is not. When in doubt, the cashier can tell you whether an item is taxed.

Sales tax on online and mail orders

Online retailers are required to collect New Jersey sales tax on orders shipped to New Jersey addresses. This applies to Amazon, Walmart, Target, and virtually all major sellers. The tax is added to your order total before you complete checkout, so you see the final price including tax.

Smaller online sellers, particularly those based outside New Jersey, may not collect the tax. If you receive an order without tax charged, you are technically required to report the purchase on your New Jersey income tax return and pay the tax yourself. In practice, this rarely happens, but it is the law. When you shop online, check whether tax is included in the final price before you buy.

Frequently Asked Questions

Do I pay sales tax on groceries in New Jersey?

No, unprepared food like fruits, vegetables, meat, bread, and milk are exempt. But prepared food — deli items, hot food bar items, and restaurant meals — are taxed at 6.625%. Frozen dinners and packaged foods you cook at home are not taxed.

Is clothing always tax-free in New Jersey?

Clothing and footwear under $110 per item are tax-free. A $100 shirt is exempt; a $120 shirt is fully taxed. Accessories like belts and scarves under $110 are also exempt, but jewelry and handbags are always taxed regardless of price.

Do I owe sales tax on items I buy from out-of-state online sellers?

Major retailers like Amazon and Walmart collect New Jersey sales tax automatically. Smaller sellers may not, in which case you technically owe the tax when you file your state income tax return, though enforcement is rare. Check your receipt to see whether tax was charged.

What is the difference between a manufacturer coupon and a store coupon for tax purposes?

Store coupons are subtracted before tax is calculated. Manufacturer coupons may be subtracted after tax is calculated, depending on the store's policy. The difference is usually small, but ask the cashier if you want to know the exact amount for a specific purchase.

Are prescription medications taxed in New Jersey?

No, prescription medications are exempt from sales tax. Over-the-counter drugs like aspirin, cold medicine, and pain relievers are taxed at 6.625%.