Is NJ sales tax 7%?
No. New Jersey’s statewide sales tax is 6.625%.
In terms of small purchases, rounding to the nearest cent is able to make the effective rate feel a bit higher. Older articles might still reference the 7% rate used from July 15, 2006 through December 31, 2016, for more than a decade.
Does the NJ sales tax rate change by city or county?
In general, no. New Jersey obtains one general statewide rate — rather than allowing cities or counties to add their own local layer.
When can a reduced New Jersey sales tax rate apply?
A reduced rate can apply merely in specific programs. Such a rate is for eligible in-person sales and only when the seller is authorized.
- Urban Enterprise Zone (UEZ): Certified UEZ vendors might charge 3.3125% on many qualifying purchases linked with their zone business location.
- Salem County reduced rate: Certain authorized Salem County sellers might charge the same reduced rate — on eligible in-person retail sales.
What does NJ sales and use tax mean?
Sales tax is what the seller collects at checkout. On the other hand, use tax is what the buyer may owe when a taxable item is purchased — without New Jersey tax and then used in the state.
How do you calculate sales tax in NJ?
Multiply the taxable price by the rate for that sale. And then, round the result to the nearest cent as outlined below:
- Confirm the item or service is taxable — not exempt
- Check whether a program rate is allowed for the transaction — UEZ or Salem County
- Multiply price × rate to get the tax
- Add the tax to the price
What items are generally exempt from NJ sales tax?
Specific everyday essentials are tax-free as listed below:
- Most unprepared grocery-type food
- Most everyday clothing and footwear
- Prescription drugs — and many over-the-counter medicines
- Disposable paper products for household use
Wasserman Accounting assists with NJ sales tax
If you want a quick review of your selling mechanism, which purchases qualify for exemptions and whether you should be collecting use tax, reach out to us. Wasserman Accounting presents support in aligning your setup with New Jersey’s sales and use tax rules.