Ultimate New Jersey Sales Tax Guide

This comprehensive guide will provide all the essential information on New Jersey sales tax rates.

You’ll explore how to calculate sales tax rates for counties and cities in New Jersey and find answers to a few other questions you may have. 

We'll also show you how to collect and file sales tax in New Jersey. And if sales tax filing looks time-consuming, we’ll share a white glove sales tax solution that’ll do all the heavy lifting and ensure you stay compliant throughout your sales tax lifecycle. 

New Jersey Sales Tax Rate Range 2023

New Jersey has a statewide sales tax of 6.625%. 

Unlike other states like New York, North Carolina, and South Dakota, New Jersey doesn’t impose any additional local sales taxes. 

For instance, the total sales tax of Atlantic City in Atlantic County is 6.625%. 

However, businesses in areas under the Urban Enterprise Zones (UEZs), like Trenton and Union City, can apply for partial sales tax exemption on a specific retail sale, with qualifying purchases being taxed at 3.3125%.

So what’s a UEZ?

A UEZ is a distressed area in New Jersey that falls under one or multiple municipalities. UEZs offer business and customer benefits to fuel local economic activity. 

New Jersey also allows some cities and counties to charge special taxes on specific purchases. 

For example, Millville, a city in Cumberland County, imposes a 2% special local tax in the Millville Sports and Entertainment District for food and drink, entry fees, hotel stays, etc. It’s used to fund projects in the sports and entertainment district.

How to Calculate Sales Tax in New Jersey

You can use these methods to calculate your sales tax:  

• Tax brackets that specify a tax rate for different sale amounts. 
• Multiply taxable receipts by the applicable New Jersey tax rate.

If you aren’t using tax brackets, ensure you calculate your sales tax to the third decimal point. You can then round up to the next cent if it’s $0.005 and above or round down if it’s less than $0.005. 

Next, let’s find out how state sales tax is collected in New Jersey.

Wondering what your city’s sales tax rates are? Find out here.

Collecting Sales Tax in New Jersey 

Here are the answers to some common questions regarding tax collection in New Jersey:

Do I have to Collect New Jersey Sales Tax from Customers?

New Jerseyan retailers who meet these two requirements are required to collect sales tax in New Jersey: 

• Has sales tax nexus in New Jersey
• Sells taxable products or services in New Jersey

What Creates Sales Tax Nexus in New Jersey?

New Jerseyan retailers who meet these requirements are required to collect state sales tax in New Jersey:

• Physical Location: If you have a warehouse, office, or distribution center located in New Jersey, you’ll have to get a seller’s permit.
• Employee Location: A company with employees or any other representation in New Jersey should pay taxes.
• Affiliate Nexus: If you make taxable sales of more than $100,000 or 200 transactions in the previous or current year, you’ll have to pay sales tax.
• Trade Shows: Sellers participating in seasonal or temporary trade shows must register for sales tax if they sell taxable goods and services.
• Tangible Personal Property:  Selling, leasing, or renting tangible personal property is subject to sales tax.

Do I Have to Collect Sales Tax from New Jersey Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?

New Jersey has a marketplace facilitator law, meaning online marketplaces like Amazon, Walmart, etc., should collect sales tax on behalf of third-party marketplace sellers. 

Like in many states, sales made via marketplaces still count toward your New Jersey economic nexus threshold. 

If you’re over the economic nexus threshold in New Jersey and only sell to New Jersey buyers via marketplaces, then you need to register for a New Jersey sales tax permit. But you can request to be placed on a non-reporting basis so that you aren't required to file New Jersey sales tax returns.

Read more about marketplace facilitator sales tax laws here.

Taxable Products in New Jersey

Most tangible personal property and services like candy, soft drinks, and prepared food are taxable.

Meanwhile, essentials like groceries, most frozen and canned food, prescribed medicines, and medical supplies for home use are tax-exempt.

Let’s take a closer look at how items are taxed in New Jersey: 

Are Groceries Taxable in New Jersey? 

No, groceries are tax-exempt in New Jersey.

Find out how taxes are collected on groceries across the United States.

Is Clothing Taxable in New Jersey?

Most clothing is tax-exempt in New Jersey.

Exceptions include fur clothing, accessories or equipment, sport or recreational equipment, or protective equipment (unless the protective equipment is necessary for the daily work of the user).

Are Digital Products Taxable in New Jersey?

Digital products, including books, movies, and music, are usually taxable in New Jersey. (Though streaming services are generally not taxable.)

Is Software-as-a-Service (SaaS) Taxable in New Jersey?

SaaS is non-taxable in New Jersey.

Are Services Taxable in New Jersey?

Yes, specified services are taxable in New Jersey. Taxable services include animal grooming, automobile repair, car washing, and lawn mowing. 

You can see which services are taxable and non-taxable in New Jersey here.

Tax-exempt Items

Some tax-exempt items in New Jersey are:

• Disposable paper items like towels, napkins, and paper plates.
  
• Food and food ingredients like baking products, frozen fruits, and canned vegetables.
  
• Dietary supplements that are labeled as a dietary supplement and identifiable by the “Supplement Facts” box on the label.
  
• Diabetic supplies, prosthetic devices, and durable medical equipment for home use. Examples include artificial limbs, corrective eyeglasses, and bedpans.
  
• Beverages containing milk, milk substitutes, or more than 50% juice.
  
• Fuels like Charcoal and cigarette lighter fluid.
  
• Magazines, newspapers, and newsletters that are sold as single copies or by subscription.
  
• Services like advertising, barber shop, beauty salon, and television subscription services. 

But to collect sales tax, you need a sales tax permit. Let’s find out how you can get one.

How to Register for a New Jersey Seller's Permit

If you need to collect sales tax in New Jersey, the next step is to register for your New Jersey sales tax permit. To register for a New Jersey sales tax license, submit the form NJ-REG online.

Check out how to register for a sales tax permit in the United States.

Do I Need a New Jersey seller's Permit if I’m only a Wholesaler? 

Yes. The state of New Jersey requires wholesalers who accept exemption certificates to be registered with the state.

Do I Need a New Jersey Seller's Permit if I Only Sell Temporarily in the State?

Yes. All retailers, even temporary or seasonal businesses, are required to register for a New Jersey sales tax permit 15 days before they start doing business in the state. 

How to Collect Sales Tax in New Jersey

New Jersey has a single sales tax rate of 6.625%. All sales sourced to New Jersey should be charged this single rate, unless you’re in a UEZ or a region where special taxes apply, 

Should You Collect Sales Tax on Shipping Charges in New Jersey?

Yes. New Jersey considers shipping a part of the taxable sale.

Check out how sales tax is calculated on shipping charges in every US state.

How to File and Pay Sales Tax in New Jersey

Just like income tax, the state collects sales tax too.

When you register for your New Jersey sales tax permit, the state assigns you a filing frequency and sales tax due dates. In New Jersey, although most sales tax filers file and pay quarterly, some sales tax filers may need to file quarterly but pay monthly. 

When your sales tax due date rolls around, your next step is to calculate how much sales tax you collected from buyers in the state and in each district. 

From there, you can file and pay New Jersey sales tax through multiple ways:

• File New Jersey sales tax online: File and pay via the New Jersey Division of Taxation’s Online Filing System. 
• File New Jersey sales tax by phone: Use the New Jersey EZ File System by calling 1-877-829-2866 (609-341-4800) and selecting option 1. You’ll still be required to submit New Jersey sales tax payments electronically.
• Let Zamp handle your New Jersey sales tax so you never have to look at a sales tax return again! 

There is no paper/mailing filing option for New Jersey sales tax returns. 

Learn how to file and pay sales tax in other US states here.

Next, let’s find answers to a few FAQs regarding New Jersey sales taxes. 

FAQs on Paying and Filing New Jersey Sales Tax

Here are some commonly asked questions and their answers:

1. What Is Use Tax?

Use tax is imposed on the use of taxable items and services in New Jersey when you don’t pay sales tax.

You may have to use tax if you:

• Didn’t pay sales tax of any kind.
• Paid sales tax to another jurisdiction at a rate lower than New Jersey’s.

Note: Use tax is applicable even if the out-of-state seller claims your purchase is tax-free or collects sales tax for another jurisdiction (if the amount paid to the out-of-state jurisdiction is less than the New Jersey tax rate).

2. Is New Jersey part of the Multistate Tax Commission or the Streamlined Sales Tax Project?

New Jersey is part of both the Multistate Tax Commission and the Streamlined Sales Tax Project.

The Multistate Tax Commission is an intergovernmental state tax agency that aims to facilitate uniform and consistent tax policy and administration among the states.

Meanwhile, the Streamlined Sales Tax Project aims to minimize costs and administrative burdens on retailers that collect sales tax, particularly retailers operating in multiple states. 

3. I didn’t Collect any New Jersey Sales Tax During this Period. Do I still Need to File a Return?

If you file monthly but didn’t collect any sales tax over the month, there is no need to file a New Jersey sales tax return. Instead, simply file a quarterly sales tax return as normal.  

If you file quarterly and still don’t collect any sales tax, simply file a “zero return” to let the state know you did not collect any sales tax.

4. What is the Penalty for Filing and/or Paying New Jersey Sales Tax Late?

The penalty for a late sales tax filing in New Jersey is 5% of the tax due each month you fail to pay the tax debt. The maximum penalty is 25% of the due tax debt. 

New Jersey also reserves the right to charge a $100 fine for each month the return is late.

The state may also charge a late payment penalty in addition to the late filing penalty, which is 5% of the sales tax due.

Additional penalties may apply if your tax bill is sent to collections.

5. Can I Get an Extension on Filing My New Jersey Sales Tax Return? 

Yes, you can request an extension to file your tax during unavoidable circumstances like a natural disaster, but not on time to pay. 

However, you’ll have to submit sufficient evidence to support your claim.

6. Does New Jersey Offer Sales Tax Holidays?

The state also offers a sales tax holiday on selective dates, like back-to-school tax holidays from August 26 to September 4, 2023. During a sales tax holiday, specific retail items will be tax-exempt. 

7. Can I Amend a New Jersey Sales Tax Return? 

Yes. Mistakes made on a monthly sales tax return can be amended on the next or any quarterly sales tax return filed in that same calendar year. You can amend your return online or via phone.

If you overpaid sales tax, you can request a refund by amending your return and filing Form A-3730.

8. How often will I be Required to File and Pay Sales Tax in New Jersey? 

You’ll have to pay sales tax monthly if you:

• Collected more than $30,000 in New Jersey sales tax in the previous calendar year. 
• Collected more than $500 in sales tax in the taxable month.

All other sellers are required to file and pay New Jersey sales tax quarterly.

9. New Jersey Sales Tax Due Dates

New Jersey sales tax is due by 11:59 p.m. on the 20th day of the month following the taxable period. 

If your sales tax filing due date falls on a weekend or holiday, it’s due the next business day.

Let’s take a look at the New Jersey quarterly sales tax filing due dates:

Let The Experts Handle Your Sales Taxes

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But not when you’ve Zamp!

Zamp is a white-glove solution that not only delivers pinpoint-accurate tax calculations but also simplifies the entire registration and filing process with just a click. With Zamp, you can say goodbye to tax worries and dedicate more time to your business.

Ready to embark on your stress-free tax journey today? Get started with Zamp now.