1
Rev. 07/22
New Jersey Sales Tax Guide
Tax Topic Bulletin S&U-4
Contents
Introduction....................................................................................................................................................................... 3
New for 2022 .................................................................................................................................................................... 3
Sales Tax Law .................................................................................................................................................................... 3
Use Tax ................................................................................................................................................................................ 5
Grocery, Drug, and Household Items ...................................................................................................................... 5
Services ............................................................................................................................................................................ 14
Coupons .......................................................................................................................................................................... 17
Prepared Food ............................................................................................................................................................... 18
Newspapers, Magazines, and Books ..................................................................................................................... 19
Specified Digital Products ......................................................................................................................................... 19
Clothing and Footwear .............................................................................................................................................. 20
Leasing ............................................................................................................................................................................. 24
Claim for Refund of Sales Tax .................................................................................................................................. 24
Business Registration and Collecting Sales Tax ................................................................................................ 25
Other Taxes and Fees ................................................................................................................................................. 29
Connect With Us ........................................................................................................................................................... 31
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Revision History
Date
Page
Number
Topic Revision
July 6, 2022 3 & 8
Taxability of
Medical Cannabis
This revision updates information
about the taxability of medical
cannabis effective July 1, 2022.
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Introduction
This bulletin has been designed as a guide to New Jersey Sales Tax and the taxability of certain
items and services sold at retail. The lists of taxable and exempt items given throughout this
publication are not meant to be all-inclusive. If after reading this bulletin you are unsure
whether an item is taxable, contact
the New Jersey Division of Taxation. Information on the
taxability of boats is available on the Division’s website.
New for 2022
Retail sales of recreational cannabis are subject to Sales Tax (N.J.S.A. 54:32B-3(a)). Any business
involved in the sale of cannabis must be registered with the Division.
For more information, see Recreational Cannabis and Licensed Cannabis Establishments.
Retail sales of medical cannabis are
not taxable
effective July 1, 2022.
Sales Tax Law
The New Jersey Sales and Use Tax Act imposes a tax on the receipts from every retail sale of
tangible personal property, specified digital products, and the sale of certain services, except
as otherwise provided in the Act. Tangible personal property can include prewritten computer
software delivered electronically. In addition, most services performed on tangible personal
property and specified digital products are taxable unless they are specifically exempted by
law. Exempt items include most food sold as grocery items, most clothing and footwear,
disposable paper products for household use, prescription drugs, and over-the-counter drugs.
Streamlined Sales and Use Tax Agreement (SSUTA)
The Streamlined Sales and Use Tax Agreement affects the New Jersey Sales Tax treatment of
certain products and services, including, but not limited to, candy, soft drinks, prepared food,
certain clothing and footwear, grooming and hygiene products, and lease transactions.
More information on the Streamlined Sales and Use Tax Agreement is available online.
Urban Enterprise Zones
New Jersey has established Urban Enterprise Zones in a number of economically distressed
cities in the State. Within these zones, qualified businesses that have a UZ-2 certificate may
charge Sales Tax at half of the regular rate on sales of tangible personal property qualified for
the reduced rate. In order for the qualified UEZ seller to offer this reduced rate, the purchaser
must place the order in person at the seller’s place of business in the zone. In addition, the
purchaser must accept delivery at the seller’s place of business within the zone, or the seller
must deliver the property from its business location in the zone, not from another location.
More information on Urban Enterprise Zones and the benefits available to qualified UEZ
businesses is provided on the Division’s website
.
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Salem County Reduced Sales Tax
Certain sales made by businesses located in Salem County are subject to Sales Tax at half of
the regular rate. Although there are certain exceptions, the reduced rate applies solely to retail
sales of tangible personal property. The following are not eligible for the reduced rate:
• Motor vehicles;
• Alcoholic beverages;
• Cigarettes;
• Mail-order, catalog, or internet sales;
• Sales of services (e.g., maintenance and/or repairs);
• Prepared food, meals, and beverages;
• Telephone and electronically communicated sales;
• Sales made from locations outside the county;
• Charges for admissions or amusements;
• Charges for room occupancy, including hotels and transient accommodations such as
short-term rentals of rooms, homes, or other lodging;
• Cannabis.
To qualify for the reduced rate, the sale must be made in person from a place of business
regularly operated by the seller for the purpose of making retail sales. In addition, the
purchaser must accept delivery at the seller’s place of business in Salem County, or the seller
must deliver the property to the purchaser from the seller’s location in Salem County.
Transient Accommodations
New Jersey taxes occupancies of certain types of real property, such as hotels and motels.
Current law extends similar tax treatment to transient accommodations.
Transient accommodations are short-term rentals such as:
• Vacation rentals;
• Houses;
• Rooms;
• Similar lodging for guests on a transient basis.
New Jersey property owners who provide transient accommodations are now required to
collect and remit New Jersey Sales Tax, the State Occupancy Fee, the Municipal Occupancy
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Fee (if applicable), and in some cases, other municipal taxes, fees, and assessments. They must
be registered with the State to collect and remit these taxes and fees.
Certain transient accommodations are exempt from tax. See
Taxes Imposed on Charges for
the Rental of Transient Accommodations for exclusions.
Use Tax
Use Tax is due when taxable tangible personal property, specified digital products, or services
are purchased for use in New Jersey but Sales Tax is not collected, or is collected at a rate less
than New Jersey’s rate. This commonly happens when purchases are made online, by phone
or mail order, or outside the State. If the items are delivered to a New Jersey address, the
purchaser must pay Use Tax based on the purchase price, including any delivery/shipping
charges. The Use Tax rate is the same as the Sales Tax rate, which is 6.625%.
No Sales Tax Paid. If no Sales Tax is paid on a taxable item or service, the purchaser owes
6.625% Use Tax to New Jersey.
Example:
A New Jersey resident buys a pool table for $3,000 plus $50 for shipping from a
company based in another state. The pool table is delivered to the purchaser’s home. The
seller does not charge Sales Tax. The purchaser owes Use Tax of $202.06 ($3,050
X .06625 =
$202.06).
Sales Tax Paid to Another State at a Rate Less Than New Jersey’s Rate. If
Sales Tax is paid to another state (including Sales Tax paid to a city, county, or other
jurisdiction within a state) at a total rate less than 6.625% on a purchase that would have been
taxed in New Jersey, the purchaser owes Use Tax on the difference between the two rates. No
credit is allowed for Sales Tax paid to a foreign country.
Example:
On a trip to Maine, Judy Chang buys an antique desk for her office for $4,000 and
pays Maine Sales Tax at the rate of 5.5%. The difference, $45 (1.125% of the purchase price),
is due to New Jersey as Use Tax.
For more information, see Use Tax in New Jersey
.
Grocery, Drug, and Household Items
Beginning on page 5 is a list of items commonly found in a retail store, with an indication of
whether the item is taxable (T) or exempt (E) from Sales Tax
when sold to an individual
consumer.
Most items of food and drink purchased in a food store (supermarket, grocery store, produce
market, bakery, etc.) are not subject to Sales Tax. Some items found on the list may become
taxable if sold as prepared food. See the definition of prepared food
. For more information,
see the Notice regarding food and food products. Food and beverages that can be purchased
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with government benefits from the Supplemental Nutrition Assistance program (SNAP) are
exempt from Sales Tax. Thus, taxable items such as candy and soft drinks are not subject to
tax when purchased with SNAP benefits.
Sales of disposable paper products, such as towels, napkins, toilet tissue, paper plates, and
paper cups, are exempt from Sales Tax when purchased “for household use.” This exemption
does
not
apply to the sale of disposable paper products for industrial, commercial, or other
business use.
Food and food ingredients
(exempt) means substances, whether in liquid, concentrated, solid,
frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are
consumed for their taste or nutritional value. This term does not include tobacco and nicotine
products, alcoholic beverages, candy, or soft drinks.
Dietary supplements
(exempt) are any products required by the federal government to be
labeled as a dietary supplement that are identifiable by the “Supplement Facts” box on the
label. Many items that are commonly marketed as health supplements, energy bars, or meal
replacement bars do not fall within the definition of “dietary supplements.” These items could
be taxable as candy if they meet the definition below.
Candy
(taxable) means a preparation of sugar, honey, or other natural or artificial sweeteners
in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of
bars, drops, or pieces. Any preparation containing flour or requiring refrigeration is not
considered “candy.”
Soft drinks
(taxable) are nonalcoholic beverages in liquid form that contain natural or artificial
sweeteners. Beverages that contain milk or milk products; soy, rice, or similar milk substitutes;
or more than 50% fruit or vegetable juice are not considered “soft drinks” and are not subject
to Sales Tax.
Prescription drugs and over-the-counter (OTC) drugs
(for human use) also are exempt from
Sales Tax if there is a label identifying the product as a drug, such as a “Drug Facts” panel or
a statement of active ingredients. The OTC drug exemption does not apply to any
grooming
and hygiene product,
which means a soap or cleaning solution, shampoo, toothpaste,
mouthwash, antiperspirant, suntan lotion, or sunscreen.
Diabetic supplies, prosthetic devices, and durable medical equipment for home use
are
exempt from Sales Tax.
Mobility enhancing equipment
also is exempt when sold pursuant to
a doctor’s prescription. Repair and replacement parts for the exempt devices and equipment
also are not subject to Sales Tax.
Examples of
prosthetic devices
include:
Artificial Limbs
Hearing Aids
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Corrective Eyeglasses and Contact Lenses
Heart Valves
Pacemakers
Examples of durable medical equipment include:
Bed Pans
Blood Pressure Machines and Cuffs
Heating Pads
Ice Packs
Examples of mobility enhancing equipment include:
Canes
Crutches
Hand Controls for Vehicles
Wheelchairs
Wheelchair Lifts
For more information, see Health Care Products
: Drugs, Grooming and Hygiene Products,
Prosthetic Devices, Durable Medical Equipment, and Mobility Enhancing Equipment.
Acne Products:
Creams or Lotions ............................................E
Cleansers or Soaps ...........................................T
Air Fresheners ..........................................................T
Alcohol, Rubbing ....................................................E
Alcohol, Swabs and Pads .....................................E
Alcoholic Beverages (prepackaged
or by the drink) ..................................................T
Allergy Relief Products .........................................E
Aluminum Foil .........................................................T
Ammonia ...................................................................T
Anesthetics ...............................................................E
Antacids .....................................................................E
Antibiotics .................................................................E
Antifungals ................................................................E
Antihistamines .........................................................E
Antinauseants .......................................................... E
Antiperspirants ........................................................ T
Arch Supports ..........................................................E
Arthritis Relievers ...................................................E
Artificial Tears ..........................................................E
Aspirins and Combinations ................................E
Asthma Preparations.............................................E
Astringents ................................................................E
Athlete’s Foot Treatments ...................................E
Baby Bath Soaps—Liquid, Bar ...........................T
Baby Food .................................................................E
Baby Formulas .........................................................E
Baby Lotions .............................................................T
Baby Pants ................................................................E
Baby Powder ............................................................T
Baby Shampoos ......................................................T
Baby Wipes ...............................................................E
Bags:
Cloth, Plastic ..................................................... T
Paper
for household use
.............................. E
Baked Goods (see Prepared Food
)……………*
*Taxability depends on how product is sold.
Baking Cups:
Foil ......................................................................... T
Paper
for household use ................................
E
Baking Powder ........................................................ E
Baking Soda ............................................................. E
Balloons ..................................................................... T
Bandages ................................................................... T
Band Aids .................................................................. T
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Bar Mixes (liquid):
Sweetened ........................................................... T
Unsweetened ..................................................... E
Bath Beads, Oils, Sachets .....................................T
Bathing Caps ............................................................E
Bathroom Cleaners ................................................T
Batteries .....................................................................T
Batteries, Hearing aid ...........................................E
Bed Linens .................................................................T
Bed Pans
for home use
........................................E
Bee Sting Relievers ................................................E
Beverage Flavorings/Enhancers—Liquid,
Concentrated......................................................E
Beverage Powders (Kool-Aid,
lemonade, iced tea) .........................................E
Beverage Syrups:
Flavored ................................................................E
Soda .......................................................................E
Beverages, Sweetened:
Containing milk, milk products, or
milk substitutes (soy, rice, etc.) ............E
Containing more than 50% juice ..............E
Containing no milk products and
containing 50% or less juice .................T
Beverages, Unsweetened ...................................E
Bibs ..............................................................................E
Bird Food ................................................................... T
Birth Control Preparations .................................. E
Biscuits, Crackers .................................................... E
Blankets (except baby receiving blankets) .... T
Bleach—Liquid, Dry ............................................... T
Blistex® (medicated) ............................................ E
Blood Pressure Cuffs
for home use
................. E
Books (except certain textbooks
approved by the school) ............................... T
(see also
Newspapers, Magazines, and
Books and Specified Digital Products)
Bottled Water:
Sweetened .........................................................T
Unsweetened ....................................................E
Braces—Ankle, Knee ............................................. E
Bread and Rolls ....................................................... E
Breast Cream ............................................................ T
Breast Pump ............................................................. E
Breast Shells, Bra Pads .......................................... E
Breath Freshener .................................................... T
Bubble Bath .............................................................. T
Butane ........................................................................ E
Cake Mixes ................................................................ E
Calling Cards, Telephone (prepaid):
Sale of Card......................................................... T
Additional Minutes .......................................... T
Camera Lens and Eyeglass Cleaner Tissues.. T
Candles ....................................................................... T
Candy (see Candy
) ................................................. T
Taxable
unless
product contains flour
(e.g., Nestle Crunch®) or requires
refrigeration.
Canes .......................................................................... T
Sold pursuant to doctor’s prescription .... E
Canker Sore Preparations ................................... E
Cannabis:
Recreational………………………………………….T
Medical ...............................................................E
Canned Goods:
Fruits .................................................................... E
Meats, Fish (except pet food) ................... E
Milk ...................................................................... E
Soup ..................................................................... E
Vegetables ......................................................... E
Car Wash and Wax ................................................ T
Carbonated Beverages (see Beverages
)
Carpet Cleaners ....................................................... T
Carpet Deodorizers ...............................................T
Castor Oil ...................................................................E
Cat Food ....................................................................T
CDs, Cassettes, DVDs ............................................T
Cereal Bars (see Candy
) .......................................*
*Taxability depends on ingredients.
Cereals ........................................................................E
Chapstick® (medicated) ......................................E
Charcoal, Charcoal Briquettes ...........................E
Cheese, Cheese Spreads ......................................E
Chewing Gum ..........................................................T
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Chewing Tobacco ...................................................T
Chips—Chocolate, Butterscotch, etc.
(for use in baking):
Sweetened .........................................................T
Unsweetened ....................................................E
Chips—Potato, Corn, etc. ...................................E
Christmas Trees .......................................................T
Christmas Tree Skirts—Paper, Cloth ...............T
Cigarette Filters .......................................................T
Cigarette Papers .....................................................T
Cigarettes ..................................................................T
Cigars ..........................................................................T
Cleaning Liquids, Powders ..................................T
Clotheslines ..............................................................T
Clothespins ...............................................................T
Clothing (see Clothing and Footwear
)
Cocktail Onions, Olives ........................................E
Cocktail Sauces .......................................................E
Cocoa, Instant ..........................................................E
Cod Liver Oil .............................................................E
Coffee—Beans, Packaged, Instant ...................E
Coffee Filters—Paper
for household use
......E
Coffee Pot Cleaners ...............................................T
Cold Preparations and Remedies .....................E
Cold Sore Preparations ........................................E
Combs ........................................................................T
Computers: (see also Services
)
Computer Systems .......................................T
Hardware Components ..............................T
Prewritten Computer Software ................ T
Condiments (ketchup, mustard, etc.) .............. E
Condoms ................................................................... T
Confections (see Candy
) ...................................... T
Constipation Products .......................................... E
Contact Lens Care Products (including
saline solution) ............................................... T
Contact Lens Cleaner, Solution ......................... T
Contact Lenses (prescription) ............................ E
Contraceptive Preparations ................................ E
Cooking Wine .......................................................... E
Copper Cleaner ....................................................... T
Corn and Callus Pads ............................................ T
Corn and Callus Removers .................................. E
Cornstarch ................................................................. E
Cosmetics .................................................................. T
Costumes ................................................................... E
Cotton Balls .............................................................. T
Cough Preparations .............................................. E
Covid-19 Test Kits……………………………………….T
Cream, Milk, Half and Half .................................. E
Crepe Paper .............................................................. T
Crutches ..................................................................... T
Sold pursuant to doctor’s prescription . E
Cups:
Paper for household use ............................ E
Plastic, Foam ...................................................T
Cuticle Remove .......................................................T
Dandruff/Seborrhea Shampoo..........................T
Decongestants ........................................................E
Decorations—Paper, Plastic ...............................T
Dental Floss ..............................................................T
Dental Rinse .............................................................T
Denture Adhesives, Preparations .....................T
Deodorants, Antiperspirants ..............................T
Deodorizers—Room, Car, Carpet .....................T
Depilatories ..............................................................T
Detergents ................................................................T
Diabetic Supplies (lancets, needles,
syringes, test strips, wipes, etc.) ................E
Diapers (including disposable) ..........................E
Diaper Liners ............................................................E
Diarrhea Aids ...........................................................E
Digestive Aids ..........................................................E
Digital Property (see
Specified
Digital Products) ...............................................T
Dinnerware (disposable):
Paper for household use ............................E
Plastic, Foam ...................................................T
Dips—Cheese, Onion, etc. .................................E
Dish Detergents ......................................................T
Disinfectants. ............................................................T
Distilled Water .........................................................E
Diuretics .....................................................................E
Dog Food ..................................................................T
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Doilies—Paper, Foil ...............................................T
Douches:
Antiseptic, Anti-Infectious .........................E
Cleaning, Deodorizing ................................T
Drain Openers, Cleaners ......................................T
Drawer Liners ...........................................................T
DVDs, CDs .................................................................T
Dyes .............................................................................T
Ear Preparation, Ache Aids .................................E
Ear Syringes ..............................................................E
Eczema Preparations .............................................E
Eggs—Fresh, Dried ................................................E
Electrical Supplies...................................................T
Energy Bars (see Candy
) ......................................*
*Taxability depends on ingredients.
Epsom Salt:
Garden Use........................................................ T
Medical Use (for humans) .......................... E
Expectorants ............................................................. E
Eye Preparations ..................................................... E
Eyeglass Cleaner Tissues ..................................... T
Eyeglass Frames (fitted with corrective
lenses) ......................................................................... E
Eyeglasses (corrective) ......................................... E
Fabric Softeners ...................................................... T
Facial Cleansing Pads ............................................ T
Feminine Napkins, Tampons .............................. E
Fever Blister Aids ....................................................E
Fiberglass Cleaner ..................................................T
Film, Film Processing .............................................T
Firewood ...................................................................E
First Aid Kits..............................................................T
First Aid Products:
Bandages ........................................................... T
Healing Agents, Solutions, etc. ................. E
Fishing Bait ............................................................... T
Flags:
State of New Jersey........................................ E
United States of America. ............................ E
All Others ........................................................... T
Flashlights ................................................................. T
Flatware ...................................................................... T
Flea Collars ................................................................ T
Floor Cleaners and Polishes ............................... T
Floor Coverings, Rugs ........................................... T
Floor Finishes (wax) ............................................... T
Floor Wax Remover ............................................... T
Flowers ....................................................................... T
Food Coloring .......................................................... E
Food Wraps:
Aluminum Foil .................................................. T
Paper Freezer Wrap
for household use ..
E
Plastic Storage Bags ...................................... T
Plastic Wrap ...................................................... T
Waxed Paper
for household use
............... E
Foot Care Preparations ........................................ E
Foot Deodorizers .................................................... T
Footwear (see Clothing and Footwear
)
Freezer Packs (blue ice) ........................................ T
Frozen Foods (see also Ice Cream) ................. E
Fruit ............................................................................. E
Fruit Drinks:
Containing 50% or less juice ...................... T
Containing over 50% juice .......................... E
Fuels:
Charcoal ............................................................. E
Charcoal Lighter .............................................. E
Cigarette Lighter Fluid .................................. E
Fungicides ................................................................. E
Furniture .................................................................... T
Furniture Polishes and Cleansers .................... T
Fuses ...........................................................................T
Garbage Pails ...........................................................T
Garden Supplies......................................................T
Gatorade ....................................................................T
Gelatin and Gelatin Desserts ..............................E
Gift Certificates ........................................................E
Gift Wrap, Bows, Boxes, Tags .............................T
Gloves .........................................................................E
Glucose Meters
for home use
...........................E
Granola Bars (see Candy
) ....................................*
*Taxability depends on ingredients.
Greeting Cards ........................................................T
Grenadine ..................................................................E
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Grip Tape ...................................................................T
Guest Towels—Paper
for household use
......E
Hair Care Products:
Brushes, Combs ...............................................T
Conditioners .....................................................T
Curler Papers ....................................................T
Rinses ..................................................................T
Shampoos, including Minoxidil-based ...T
Halloween Masks ...................................................T
Hand Cleaners .........................................................T
Hand Lotion ..............................................................T
Hay Fever Aids .........................................................E
Headache Relief Aids ............................................E
Health/Fitness Equipment (weights,
exercise balls, steps, etc.) .............................T
Heating Pads ............................................................E
Hemorrhoid Treatments ......................................E
H.I.V. Testing Kits (only when sample is
sent to lab for analysis and report) ..........E
Hosiery, all types ....................................................E
Hot Chocolate, Instant .........................................E
Hypodermic Syringes and Needles:
Diabetic Use ......................................................E
Disposable (for nondiabetic use) ..............T
Reusable (for home use) ..............................E
Ibuprofen ...................................................................E
Ice ................................................................................E
Ice Buckets, Ice Chests..........................................T
Ice Cream:
Individually wrapped bars, sandwiches,
popsicles, cones
(single item or by the box) ............................ E
By the gallon or part of a gallon ................. E
Ice Cream Cones (hand-dipped) ...................... T
Iced Tea:
Liquid, sweetened ............................................. T
Liquid, unsweetened ....................................... E
Powdered, sweetened or unsweetened ... E
Icing/Frosting ........................................................... E
Ingrown Nail Preparations .................................. E
Insect Bite and Sting Preparations ................... E
Insecticides, Repellents ........................................ T
Instant Cocoa, Coffee, Tea .................................. E
Insulin ......................................................................... E
Iodine, Tincture of .................................................. E
Itch, Rash Relievers ................................................ E
Jams and Jellies ....................................................... E
Jewelry Cleaners ..................................................... T
Juice Drinks:
Containing 50% or less juice ........................ T
Containing over 50% juice ............................ E
Keys ............................................................................. T
Laundry Soaps and Detergents .
....................... T
Lawn Bags ................................................................. T
Laxatives .................................................................... E
Leather Cleaners (saddle soap) ......................... T
Leavening Agents ................................................... E
Lemonade:
Liquid, sweetened ............................................. T
Powdered............................................................. E
Lice Treatments (for humans) ............................ E
Light Bulbs ................................................................ T
Lighter Fluid ............................................................. E
Linens .......................................................................... T
Liners—Garbage Can, Shelf, etc. ...................... T
Lint Removers .......................................................... T
Lip Balms (medicated) .......................................... E
Lipstick ........................................................................ T
Liquid Nicotine…………………………………………...T
Litter Box Liners ......................................................T
Lotions:
Cleansing .............................................................T
Moisturizing ........................................................T
Lunch Bags:
Paper
for household use
..............................E
Plastic ..................................................................T
Lye ..............................................................................T
Magazines (or periodicals), qualified:
(see Newspapers, Magazines, and Books
)
Sold as single copies (hard copies) ..........T
Sold as single copies (electronic) ..............E
Sold by subscription ......................................E
Makeup ......................................................................T
Makeup Remover ...................................................T
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Maraschino Cherries .............................................E
Marshmallow Fluff .................................................E
Marshmallows..........................................................T
Matches .....................................................................T
Meats ..........................................................................E
Medicines (for pets) ..............................................T
Menstrual Cramp Relievers ................................E
Metal Cleaners and Polishes ..............................T
Mildew Remover .....................................................T
Milk (fresh, powdered), Cream,
Half and Half .....................................................E
Mineral Oil ................................................................E
Mineral or Herbal Supplements
(in form of pills, capsules, etc.) ..................E
Mixes for Soups ......................................................E
Mixes for alcoholic beverages:
Liquid, sweetened (see Beverages
)
Liquid, unsweetened......................................E
Powdered ...........................................................E
Mops, Mop Handles ..............................................T
Motion Sickness Remedies .................................E
Mouthwash ...............................................................T
Movies (see Specified Digital Products
) ........T
Muscle Ache Relievers ..........................................E
Music (see Specified Digital Products
) ........... T
Nail Biting Deterrents ........................................... T
Nail Polish ................................................................. T
Nail Polish Remover .............................................. T
Napkins, Table—Paper for household use ... E
Nasal Sprays, Decongestants ............................. E
Newspapers .............................................................. E
Nicotine Gum or Patch ......................................... E
Non-stick Cooking Sprays .................................. E
Nursing Bottles, Nipples, Funnels .................... T
Nursing Pads—Paper ............................................ E
Nuts:
Sweetened (see Candy)
Unsweetened ..................................................... E
Oil—Cooking, Salad .............................................. E
Olives .......................................................................... E
Oral Pain Relievers ................................................. E
Oven Cleaners ......................................................... T
Oven Cooking Bags:
Paper
for household use
................................ E
Plastic or Aluminum ........................................ T
Ovulation Testing Kits .......................................... T
Oxygen ....................................................................... E
Paint Remover ......................................................... T
Paper Bags
for household use
.......................... E
Paper Goods (plates, towels, etc.)
for household use
............................................ E
Paperback Books .................................................... T
Peroxide, Hydrogen (for medical use) ............ E
Pet Foods .................................................................. T
Pet Shampoo ........................................................... T
Pet Supplies .............................................................. T
Petroleum Jelly ........................................................ E
Pets .............................................................................. T
Pickles ......................................................................... E
Pies, Pie Crusts ........................................................ E
Pillows ......................................................................... T
Place Mats:
Cloth and plastic ............................................... T
Paper
for household use
................................ E
Plants (including fruit, vegetable) .................... T
Plates:
Paper
for household use
................................E
Plastic, Foam .......................................................T
Poison Ivy and Oak Treatment
Preparations ....................................................E
Polishing Cloths and Mitts ..................................T
Popcorn:
Popped, sweetener added ........................T
Popped, no sweetener added .
.................E
Unpopped, any flavor..................................E
Powdered Beverage Mix ......................................E
Pregnancy Testing Kits .........................................T
Prescription Contraceptives ...............................E
Prescription Drugs (for human use) ................E
Presoaks, Laundry ..................................................T
Preserves ...................................................................E
Pretzels (unheated) ................................................E
Propane ......................................................................E
Puddings ....................................................................E
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Rev. 07/22
Pumpkins:
Used for decoration .....................................T
Used for food .................................................E
Rainhoods .................................................................E
Ringtones (see Specified Digital Products
) ..T
Rock Salt ....................................................................T
Rogaine® Foam/Solution ...................................E
Rubber Gloves .........................................................E
Rug Cleaners and Shampoos .............................T
Rug Deodorizers .....................................................T
Salads (potato salad, coleslaw, etc.) ................*
(see Prepared Food
)
*Taxability depends on how product is
sold.
Salt and Salt Substitutes ......................................E
Sandwich Bags:
Paper
for household use
............................E
Plastic ..................................................................T
Sanitary Napkins, Tampons ................................E
Scouring Pads ..........................................................T
Seeds—Flower or Vegetable..............................T
Shampoos ................................................................. T
Shaving Cream ........................................................ T
Shelf Liners................................................................ T
Shoe Inserts (Odor Eaters) .................................. E
Shoe Laces ................................................................ E
Shoe Polish ............................................................... T
Shoes (see Clothing and Footwear
)
Shower Caps ............................................................ T
Sinus Relievers ......................................................... E
Skin Bleaches ........................................................... T
Skin Irritation Relievers ........................................ E
Sleep Aids.................................................................. E
Snuff ............................................................................ T
Soap ............................................................................ T
Soap Pads .................................................................. T
Soup Mixes ............................................................... E
Spaghetti ................................................................... E
Sparklers, Party Poppers, Glow Worms .......... T
Specified Digital Products (see
Specified
Digital Products).............................................. T
Spices .......................................................................... E
Sponges ..................................................................... T
Stain and Spot Remover ...................................... T
Starch:
Corn ..................................................................... E
Laundry ............................................................... T
Static Remover ........................................................ T
Stationery .................................................................. T
Steel Wool ................................................................. T
Stirrers—Wood, Plastic ........................................ T
Straws:
Paper
for household use
.............................. E
Plastic .................................................................. T
Sugar and Sugar Substitutes ............................. E
Sunburn Relief Products ...................................... E
Sunglasses................................................................. T
Sunscreens ................................................................ T
Surgical Adhesive ................................................... T
Table Covers:
Paper
for household use
.............................. E
Plastic .................................................................. T
Tampons (and like products) ............................. E
Tape ............................................................................. T
Tea—Prepackaged, Dry, or Instant ..................E
Tears, Artificial .........................................................E
Teething Lotions .....................................................E
Telephone Calling Cards (prepaid):
Additional Minutes .........................................T
Sale of Card .......................................................T
Tenderizers (spices) ...............................................E
Thermometers (reusable)
for home use
........E
Tile Cleaners .............................................................T
Tissue—Facial and Toilet
for household use
.........................................E
Tobacco .....................................................................T
Toilet Bowl Cleaners ..............................................T
Toilet Bowl Deodorizers .......................................T
Tooth Ache Relievers ............................................E
Tooth Polish .............................................................T
Toothbrushes ...........................................................T
Toothpaste ................................................................T
Toothpicks ................................................................T
Towelettes
for household use
..........................E
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Rev. 07/22
Towels:
Cloth ....................................................................T
Paper
for household use
..............................E
Trashbags and Liners ............................................T
Undergarments, Disposable ...............................E
Underpads, Disposable—Paper ........................E
Upholstery Cleaners ..............................................T
Vacuum Cleaner Bags:
Cloth, Plastic .....................................................T
Paper
for household use
..............................E
Vaporizer Tablets.................................................... T
Vaseline® ................................................................ E
Vegetables ................................................................ E
Vitamins ..................................................................... E
Wart Removers ........................................................ E
Water:
Sweetened ......................................................... T
Unsweetened .................................................... E
Water Conditioners ............................................... T
Water Pills ................................................................. E
Water Repellent ...................................................... T
Wax .............................................................................. T
Wax Remover ........................................................... T
Waxed Paper
for household use
...................... E
Wheelchairs .............................................................. T
Sold pursuant to doctor’s prescription... E
Whipped Cream ...................................................... E
Whiteners, Laundry ................................................ T
Wigs ............................................................................ T
Window Cleaning Liquids ................................... T
Windshield Washer Solution .............................. T
Wipes:
Handi Wipes® (rayon) .................................. T
Witch Hazel .............................................................. E
Wool Washes ........................................................... T
Wrapping Paper, Bows ......................................... T
Wraps:
Foil, Plastic ......................................................... T
Paper
for household use
.............................. E
Services
The following is a list of common services, with an indication of whether the service is taxable
(T) or exempt (E) from Sales Tax.
Accounting Services:
Professional Services .....................................E
Electronic Filing Charges ..............................T
Admission Charges:
Spectator Sports (baseball games,
basketball games, professional
wrestling events, etc.) ..............................T
Participant Sports (bowling, fishing,
swimming, etc.) ..........................................E
Places of Amusement (movie theaters,
amusement parks, trade shows,
craft shows, etc.) ........................................T
Advertising Services (in general) ......................E
Alarm Monitoring ...................................................T
Animal Boarding at Seller’s Facility .................T
Animal Grooming ...................................................T
Answering Services, Telephone ........................T
Appliance Repairs ..................................................T
Appraisals—Jewelry, Real Estate, etc. .............E
Architectural Services (in general) ...................E
Armored Car Services ...........................................T
Automobile Repairs:
Inspection Service ...........................................E
Labor ....................................................................T
Parts .....................................................................T
Barber Shop Services ............................................E
Beauty Parlor Services ..........................................E
Beeper and Paging Services ...............................T
Boat Docking Fees:
Slip Rentals ........................................................E
Storage (water or land) .................................T
Bookkeeping Services ...........................................E
Calligraphy ................................................................T
Cable or Satellite Television Subscription .....E
New Jersey Sales Tax Guide
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Rev. 07/22
Car Washing .............................................................T
Carpet Cleaning ......................................................T
Catering Services ....................................................T
Child/Day Care ........................................................E
Chimney Sweeping (residential) ....................... E
Cleaning Services (janitorial) .............................. T
Computer Maintenance/Repair ........................ T
Credit Check/Report ............................................. T
Credit Repair Services ........................................... E
Data Processing Services ..................................... E
Debt Collection ....................................................... E
Delivery Charges:
On Taxable Items ............................................ T
On Nontaxable Items .................................... E
Disc Jockey ................................................................ E
Dry Cleaning:
Clothing .............................................................. E
Other ................................................................... T
Document Fees Imposed by Motor Vehicle
Dealerships:
For taxable motor vehicle sales ................. T
For nontaxable motor vehicle sales ......... E
Separately stated fees for title and
registration charged by New Jersey
Motor Vehicle Commission ................... E
Electronic Filing Charges ..................................... T
Employment Agency Fees ................................... E
Extended Warranty Agreements ...................... T
Facsimile (Fax) Services ........................................ T
Floor Covering Installation ................................. T
Garbage Removal:
Contractual (30 days or more) ................... E
Noncontractual ................................................T
Home Repairs (except residential heating
systems) ............................................................T
Gift Wrapping .........................................................T
Information Services .............................................T
Insurance Premiums ..............................................E
Interior Design .........................................................E
Internet Access Charges ......................................E
Investigation and Detective Services ..............T
Jewelry:
Cleaning .............................................................T
Engraving ...........................................................T
Sizing ...................................................................T
Landscaping Services ............................................T
Laundry Services:
Clothing ..............................................................E
Other ...................................................................T
Lawn Mowing Services .........................................T
Locker Rentals .........................................................T
Mail Processing Services for
Advertising/Promotional
Material:
Distributed in NJ.......................................... T
Distributed outside NJ .............................. E
Maintenance Agreements (in general)........... T
Manufacturer’s Rebate (automobile, etc.) .... T
Massage Services ................................................... T
Provided pursuant to doctor’s
Prescription ................................................... E
Membership Fees*:
Discount Clubs ................................................. E
Health/Fitness/Athletic/Sporting Clubs . T
Shopping Clubs ............................................... T
Professional/Social Clubs ............................. E
*Tax does not apply to memberships in clubs whose members are predominantly age 18 or under
or when charges are made by qualified exempt organizations or New Jersey State or local
government entities.
Moving Services ......................................................E
Parking:
Parking, storing, or garaging a
motor vehicle .................................................T
At facility owned/operated by
employer ..........................................................E
Atlantic City casino hotel $3 parking
fee .......................................................................E
New Jersey Sales Tax Guide
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Rev. 07/22
Parking receipts subject to tax imposed
by any other law or ordinance .................E
Provided by a municipality, county, or
municipal/county parking authority ......E
Provided to employee by employer ..........E
Residential ...........................................................E
Pest Control:
Inspection ............................................................E
Treatment ............................................................T
Pet Sitting at Owner’s Home .............................E
Photocopying Services .........................................T
Photographer’s Services ......................................T
Prewritten Computer Software Delivered
Electronically:
Sold to individuals .......................................... T
Used directly in the conduct of the
purchaser’s business/trade ......................... E
Printing Services ..................................................... T
Professional Services (doctor, lawyer, etc.) ... E
Restaurant Meals .................................................... T
Safe Deposit Box Rental ...................................... T
Scanning—Photos, Records, etc. ...................... T
Security Guard and Patrol Services ................. T
Security Systems Services ................................... T
Service Contracts (in general) ............................ T
Shoe Repair .............................................................. E
Silk-Screening, Monogramming,
Embroidering:
Purchase of Clothing Included ............. E
Services Only ............................................... T
Snow Removal ......................................................... T
Space for Storage ................................................... T
Storage Service Charges ...................................... T
Tanning Sessions ....................................................T
Tattooing ...................................................................T
By prescription in conjunction with
reconstructive breast surgery.....................E
Telecommunications Services
(landline and wireless telephone,
telegraph, pagers, alarm monitoring, etc.)
...............................................................................T
Telephone Answering Services .........................T
Tips and Gratuities (separately stated
and paid in full to employees) ...................E
Towing ........................................................................E
Transportation (see also Delivery Charges
,
) .E
Trash Removal:
Contractual (30 days or more) ................... E
Noncontractual ................................................ T
Travel Agency Fees ................................................ E
Typing Services ....................................................... E
Utilities (natural gas, electricity) ....................... T †
Videography ............................................................. T
Website Design ....................................................... E
Website Hosting ..................................................... E
Window Washing ................................................... T
†Included in rate
Delivery Charges for Taxable Property and Services
Sales Tax is imposed on the charges for delivery of property (or services) from a seller directly
to a customer if the items sold are subject to tax. Tax is not imposed on delivery charges for
nontaxable items like clothing, property purchased for resale, and property covered by any
other statutory exemption provision.
Delivery charges
are defined as charges by the seller for preparation and delivery to a location
designated by the purchaser of personal property or services including, but not limited to,
transportation, shipping, postage, handling, crating, and packing. If a shipment includes both
exempt and taxable property, the seller should allocate the delivery charge by using:
• A percentage based on the total sales price of the taxable property compared to the
total sales price of all property in the shipment; or
New Jersey Sales Tax Guide
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Rev. 07/22
• A percentage based on the total weight of the taxable property compared to the total
weight of all property in the shipment.
Thus, only the portion of the delivery charge that relates to the taxable property or service is
subject to Sales Tax. In these mixed transactions, if the seller does not allocate the delivery
charge, the entire delivery charge is taxable.
For information about delivery charges on out-of-state sales, see
Out-of-State Sales & New
Jersey Sales Tax.
Coupons
The following guidelines apply to retail sale transactions involving the use of coupons.
• When a manufacturer issues a coupon entitling a purchaser to pay a reduced price on
an item, and the seller is
reimbursed
by the manufacturer, distributor, or other third
party, the tax is due on the full regular price of the item. The sales price is composed of
the amount paid and the amount of the coupon value. The coupon value reflects a
payment or reimbursement by another party to the seller.
Example: A store issues a coupon labeled “mfr.” entitling the holder to purchase an item for
$10 less than the regular price.
Regular price $ 99.95
6.625% Sales Tax + 6.62
Total before discount $ 106.57
Manufacturer’s coupon – 10.00
Customer pays $ 96.57
• When a store issues a coupon entitling a purchaser to a discounted price on the item or
a free or reduced price on an additional item, and the seller receives
no reimbursement
from the manufacturer or other third party, the Sales Tax is due from the purchaser on
only the discounted price, which is the actual receipt.
Example: A store issues a coupon entitling the holder to purchase a product for 50 cents less
than the regular price.
Regular price $ 2.37
Store coupon – 0.50
Taxable receipt $ 1.87
6.625% Sales Tax + 0.12
Customer pays $ 1.99
• When a store issues a coupon entitling a purchaser to pay a reduced price on an item,
and the seller is
reimbursed
by a manufacturer, distributor, or other third party, the tax
New Jersey Sales Tax Guide
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Rev. 07/22
is due on the full regular price of the item. The sales price is composed of the amount
paid and the amount of the coupon value.
• When a manufacturer or a seller issues a coupon involving a
third-party reimbursement
,
but does not disclose that fact to the purchaser on the coupon or in an accompanying
advertisement, the seller will collect from the purchaser only the tax due on the reduced
price, but will be required to pay the tax based on the entire sales price (i.e., the amount
of the price paid and the reimbursement Received from the manufacturer or other third
party
).
For more information, see Coupons, Discounts & New Jersey Sales Tax
.
Prepared Food
Sales of prepared food are subject to Sales Tax.
Prepared food,
which includes beverages,
means:
• Food sold in a heated state or heated by the seller; or
• Two or more food ingredients combined by the seller and sold as a single item; or
• Food sold with eating utensils provided by the seller.
Food that is only cut, repackaged, or pasteurized by the seller, as well as eggs, fish, meat,
poultry, and foods that contain these raw animal foods that require cooking by the consumer
are not treated as prepared food.
The following are
not
treated as prepared food,
unless
the seller provides eating utensils with
the items:
• Food sold by a seller that is a manufacturer;
• Food sold in an unheated state by weight or volume as a single item; and
• Bakery items sold as such, including bread, rolls, buns, bagels, donuts, cookies, muffins, etc.
Eating utensils
include plates, knives, forks, spoons, glasses, cups, napkins, or straws. The sale
of prepared food by restaurants, taverns, delicatessens, or other establishments engaged in
selling food that fits within the definition of prepared food is subject to Sales Tax.
For more information, see
Sales of Food and Food Ingredients, Candy, Dietary Supplements,
and Soft Drinks Sold by a Grocery Store.
Cottage Food Operators (Home Bakers) Cottage Food Operators who sell cottage
food products are considered to be running a business, and must register that business with
the State of New Jersey. For tax purposes, Cottage Food Operators are treated the same as
New Jersey Sales Tax Guide
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Rev. 07/22
any other seller: if the product they sell is taxable, they must collect and remit Sales Tax. For
information regarding definitions or permit procedures, see Cottage Food Operators- Baked
Goods.
For more information, see Sales of Prepared Food by Food Service Providers
or Sales of Food
and Food Ingredients, Candy, Dietary Supplements, and Soft Drinks Sold by a Grocery Store
.
Newspapers, Magazines, and Books
Sales of newspapers are exempt from Sales Tax. Magazines and periodicals sold by
subscription are exempt whether or not they are accessed by electronic means. Magazines
sold as single copies are taxable when sold in printed form; however, they are exempt when
delivered electronically. Membership periodicals also are exempt. A “membership periodical”
is any periodical distributed by a nonprofit organization to its members as a benefit of
membership in the organization. For more information, see
Newspapers, Magazines,
Periodicals & New Jersey Sales Tax.
Sales of books, both hardback and softback, including sales of the Bible or other sacred
scripture, are taxable whether the book is delivered in hard copy or electronically.
Specified Digital Products
New Jersey imposes tax on retail sales of specified digital products and on charges for
installing, maintaining, servicing, or repairing those products, when billed to a New Jersey
address.
Specified digital product
means an electronically transferred digital audio-visual work, digital
audio work, or digital book. A digital code that provides a purchaser with a right to obtain the
product is treated the same as a specified digital product. Transferred electronically means
obtained by the purchaser by means other than tangible storage media.
Digital audio-visual work
means a series of images which, when shown in succession, create
the illusion of motion, together with accompanying sounds, if any.
Digital audio work
means a series of musical, spoken, or other sounds, including a ringtone. A
“Ringtone” is a digital sound file that is downloaded onto the purchaser’s device, used to alert
the purchaser of communication.
Digital book
means a work that is generally recognized in the ordinary and usual sense as a
book.
The term specified digital product
does not include
streaming services, video programming
services – such as video-on-demand television – or broadcasting services, including content
to provide such services.
New Jersey Sales Tax Guide
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Rev. 07/22
Receipts from sales of a specified digital product that is streamed or otherwise accessed, but
not delivered electronically to the purchaser, are not taxable. Other types of property that are
delivered electronically, such as digital photographs, digital magazines, etc., are also not
taxable.
Clothing and Footwear
Sales of articles of clothing and footwear for human use are exempt from New Jersey Sales
Tax. This exemption does not apply to 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).
Clothing
includes footwear, all inner and outer wear, headgear, gloves and mittens, neckwear,
and hosiery normally worn on the human body, including baby receiving blankets, bunting,
diapers, diaper inserts, and baby pants. Disposable undergarments for adults also are exempt.
Exempt Clothing and Footwear (not made of fur)
Aprons (household and shop)
Arch Supports
Athletic Supporters
Baby Receiving Blankets
Bathing Caps
Bathing Suits
Beach Capes and Coats
Belts and Suspenders
Bibs
Boots
Bowling Shirts (if suitable for ordinary
street wear)
Coats, Jackets, and Wraps (for either
evening or daytime wear)
Costumes (e.g., Halloween, dance;
whether for adults or children)
Diapers (including disposable, whether
for adults or children)
Djellabas
Dress Shields
Dresses (including evening wear)
Ear Muffs
Footlets
Formal Wear
Garters and Garter Belts
Girdles
Gloves and Mittens (for general use)
Hand Muffs
Hats and Caps
Head and Neck Scarves and Bandannas
Hosiery and Peds
Incontinence Briefs
Lab Coats
Leotards and Tights
Neckties
Overshoes
Pantyhose
Rainwear
Rubber Gloves (for home or work use)
Rubber Pants
Safety Clothing (normally worn in
hazardous occupations)
Sandals
Saris
Shoe Insoles (e.g., Dr. Scholl’s®)
Shoe Laces
New Jersey Sales Tax Guide
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Rev. 07/22
Shoes (including safety shoes, sneakers
and tennis shoes)
Shoulder Pads (for dresses, jackets, etc.)
Ski Masks
Sleepwear
Slippers
Socks
Steel-Toed Shoes
Stockings
Thermal Underwear
Underwear
Uniforms (athletic, school, scout, work,
etc.)
Wedding Apparel
Work Clothes, Work Uniforms
Yarmulkes, Turbans, and Fezzes
Protective Equipment
Protective equipment
means items for human wear and designed as protection of the wearer
against injury or disease, or as protections against damage or injury to other persons or
property, but not suitable for general use. Protective equipment necessary for the daily work
of the user is specifically exempt. However, protective equipment such as goggles or helmets
worn for sport or recreational activities is taxable. Examples of protective equipment include:
Breathing Masks
Clean Room Apparel and Equipment
Ear and Hearing Protectors
Face Shields
Hard Hats
Helmets
Protective Goggles
Respirators (paint or dust)
Safety Glasses and Goggles
Safety Belts
Tool Belts
Welders’ Gloves and Masks
Sport or Recreational Clothing and Footwear/Equipment
Sport or recreational equipment that is worn only in conjunction with a particular sport or
recreational activity is taxable. Articles that can be adapted for general use not exclusively
connected with a sporting activity are exempt from tax.
Taxable:
Athletic Shoes (cleated or spiked)
Ballet and Tap Shoes
Baseball and Hockey Gloves
Bicycle Shorts (padded)
Bowling Shoes
Fishing Boots (waders)
Gloves (e.g., baseball, bowling, boxing,
hockey, golf)
Goggles (nonprescription)
Golf Shoes
Hand and Elbow Guards
Helmets (sports and motorcycle)
Ice Skates
Life Preservers and Vests
Mouth Guards
Protective Masks
Roller Blades
Roller Skates (boot and screw-on)
Shin Guards and Padding
New Jersey Sales Tax Guide
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Rev. 07/22
Shoulder Pads
Ski Boots
Skin Diving Suits
Snorkel and Scuba Masks
Sweatbands
Swim Fins
Track Shoes and Cleats
Wetsuits and Fins
Exempt:
Athletic Supporters
Children’s Sports and Play Uniforms
(e.g., football, baseball, karate)
Hooded Shirts
Jogging or Running Shoes, Suits
Knitted Caps or Hats
Overshoes, Coats, Mittens, Parkas, and
Trousers (sometimes sold in the trade as
hunting, skating, and skiing apparel but
suitable for general outdoor wear and
commonly worn other than in a particular
sport)
Pullovers, Turtlenecks, and Other
Sweaters
Ski Masks
Fur Clothing
Sales of fur garments and articles meeting the definition of fur clothing are taxable.
Fur
clothing
is defined as clothing that is required to be labeled as a fur product and the value of
the fur components in the product is more than three times the value of the next most
valuable tangible component.
Fur
means any animal skin with hair, fleece, or fur fibers attached either in its raw or processed
state. It does not include skins that have been converted into leather or suede, or those from
which the hair, fleece, or fur fiber has been completely removed. Examples of items that may
be taxed as fur clothing include:
Boots
Capes
Coats
Collars
Ear and Hand Muffs
Hats
Neck Scarves
Jackets
Vests
Wraps
For more information, see the Notice to fur clothing sellers.
Accessories
Clothing accessories or equipment, although worn on the body, are not considered clothing
or footwear and are taxable. Some examples are:
Backpacks and Fanny Packs
Barrettes
Belt Buckles (sold separately)
Bobby Pins
New Jersey Sales Tax Guide
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Rev. 07/22
Briefcases
Cosmetics
Costume Masks (sold separately)
Elastic and Fur Ponytail Holders
Hair Bows
Hairclips
Hairnets
Handbags and Shoulder or Tote Bags
Handkerchiefs
Headbands
Jewelry
Key Cases
Key Rings
Patches and Emblems (sold separately)
Shower Caps
Sunglasses (nonprescription)
Sweatbands
Umbrellas
Wallets and Cell Phone Cases
Watches
Watch Bands
Wigs and Hair Pieces
Yarn Goods, Yarns, Sewing Equipment, and Supplies
Common wearing apparel materials intended to be used in either making or repairing clothes
are exempt. These materials include:
Bra and Slip Repair
Buttons
Denim and Leather Patches
Elastic
Fabrics
Lace
Ribbons
Seam-Binding and Bias Tape
Snaps, Hooks, and Eyes
Thread
Yarn
Zippers
Note: If these items are used on products other than wearing apparel, such as doll clothes
and afghans, they are taxable.
Any item that does not become an integral part of the clothing is taxable. Some examples
are:
Chalk
Fabrics and Yarns (used to make items
other than apparel such as rugs, pillows,
etc.)
Instruction Books
Knitting Needles
Measuring Tapes
Needles
Patterns
Pins
Sewing Machines
Scissors
Tape Measures
Thimbles
24
Rev. 07/22
Leasing
A lessor must collect Sales Tax from the lessee (person who leases or rents property) on a
lease or rental transaction. For leases or rentals with a term of
six months or less,
Sales Tax
must be collected with each periodic payment. For leases or rentals of
more than six months,
the full amount of tax is due up front in the period in which the lessee takes delivery of the
property.
For transactions with a term of more than six months, the tax must be calculated using either
the original purchase price of the property, or the total of the periodic payments required
under the agreement, including interest charges directly paid by the lessee. When Sales Tax is
paid on the purchase price, it does not have to be paid again if the lease is renewed or if the
same property is subsequently leased to another party.
For more information, see the Notice regarding leases and rentals and Leases and Rentals
.
Claim for Refund of Sales Tax
Refunds Requested by Individuals From Sellers. If New Jersey Sales Tax was incorrectly
charged and collected by the seller, the purchaser can request a refund of the Sales Tax paid
directly from the seller. If the purchaser is unable to recover the tax from the seller, the
purchaser can request a refund from the Division of Taxation.
Refunds Requested by Individuals From the Division of Taxation. To request a refund
from the Division, a purchaser must file a Claim for Refund (Form A-3730
) within four years
from the date of payment of the Sales Tax. Individuals must provide an explanation and submit
supporting documentation to substantiate the claim. Documentation includes items such as
copies of invoices or receipts and proof of tax paid.
Refunds Requested by Businesses From the Division of Taxation. Businesses that have
improperly collected and/or paid Sales Tax to the State on their monthly remittance statement
(Form ST-51) may correct the error on their quarterly Sales Tax return (Form ST-50
) only if the
error is discovered within the same calendar quarter. If the error is discovered after the return
for that quarter has been filed, the business must file an amended quarterly return for the
period in which the error occurred. When filing the quarterly return, the business must take
credit for all payments made for the quarter (including payments submitted in error). Quarterly
returns can be amended
online or by phone through the Business Paperless Telefiling System.
If the amended quarterly return results in an overpayment for the quarter, the business must
file a Claim for Refund (Form A-3730
) to obtain a refund. Businesses must have records of
canceled sales, returns, or uncollectible receipts to substantiate any claim for a refund of Sales
Tax remitted to the State.
Special rules apply to qualified Urban Enterprise Zone businesses. See Urban Enterprise Zones.
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Business Registration and Collecting Sales Tax
Registering a Business
Any person or organization engaged in a business, trade, profession, or occupation in New
Jersey must register with the State for tax purposes by filing a Business Registration
Application, Form NJ-REG, at least 15 business days before starting business or opening an
additional place of business in this State. Registration ensures that the business will receive all
the forms and information it needs to comply with New Jersey tax laws.
Form NJ‑REG may be filed online
through the Division of Revenue and Enterprise Services’ NJ
Business Gateway Services. A Public Records Filing also is required for corporations, limited
liability companies, limited partnerships, and limited liability partnerships. More information
on Public Records Filing is available in the
New Jersey Complete Business Registration Package
(NJ REG) or by calling 609-292-9292.
Collecting Sales Tax
In general, every New Jersey business selling taxable items or services must collect and remit
New Jersey Sales Tax when sales are completed by delivery to a New Jersey location or
performance of the service in this State. Sales Tax must be separately stated on any sales
slip, invoice, receipt, or other statement of the price payable.
Sales and Use Tax Returns
Every business that is on a reporting basis for Sales Tax purposes must file Sales Tax returns.
Information on filing requirements and reporting methods
is available on the Division of
Taxation’s website.
Exemption Certificates
New Jersey has exemption certificates that can be used to purchase property and services
without paying Sales Tax under certain conditions. Each exemption certificate has a specific
use. The New Jersey seller
accepting
an exemption certificate
must
always be registered with
New Jersey. The most common certificates are the Resale Certificate (Form ST‑3
), Exempt Use
Certificate (Form ST‑4), and Exempt Organization Certificate (Form ST‑5).
The seller should accept an exemption certificate only if it is fully completed. As long as the
certificate is completed by the purchaser and provided to the seller, the seller is relieved of
responsibility for collecting Sales Tax, even if it is later determined that the purchaser was not
eligible for the exemption.
Only one exemption certificate is necessary for additional purchases of the same general type.
Keep a record of each sale covered by a blanket certificate. Keep this certificate for at least
four years from the date of the last purchase covered by the certificate.
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SSUTA Exemption Certificate. The Streamlined Sales and Use Tax Agreement provides for
simplification and standardization in the administration of exemptions. There is a uniform
exemption certificate, Streamlined Sales and Use Tax Agreement Certificate of Exemption
(Form ST-SST
), which is accepted by all SSUTA member states.
Sales to Government Agencies
Any New Jersey State agency, political subdivision of the State of New Jersey, federal agency,
the United Nations, or any other international organization of which the United States is a
member is exempt from paying Sales Tax. In transactions with government agencies, the
acceptable proof of exemption from Sales Tax is:
• A copy of a government purchase order, official contract, or order on official government
letterhead signed by a qualified officer. When the amount of the transaction is $150 or less,
a fully completed Exempt Use Certificate (Form ST‑4
) form can be issued instead; and
• Payment must be made by the agency’s check or voucher or with a GSA SmartPay 2 credit
card that has 0, 6, 7, 8, or 9 as the sixth digit of the account number (credit card charged to
and paid directly by the federal government). If payment is made with a GSA SmartPay card
having a 1, 2, 3, or 4 as the sixth digit, the transaction is taxable because the card is billed
to and paid by the employee.
In addition, certain exemptions are granted to qualified foreign diplomatic and consular
personnel who reside in the United States. See Diplomat/Consular Sales Tax Exemptions
.
For more information, see Tax Treatment of Nonprofit Organizations and Government Entities,
and Diplomat/Consular Sales Tax Exemptions.
Out-of-State Sales
If taxable items are sold and delivered to the purchaser out of State, New Jersey Sales Tax
should not be collected. If the property is shipped out of state to a recipient other than the
purchaser (e.g., in a gift transaction), the sale also is not subject to New Jersey Sales Tax. The
seller must keep a record showing both the out-of-State destination and the method of
delivery to that location, such as parcel post receipts, bills of lading, etc.
Sales are taxable, however, if an out-of-state customer picks up the property in New Jersey.
They also are taxable if the property is delivered to the customer’s location in New Jersey, even
though the customer may intend to ship the property out of state at a later date. However,
out-of-state purchasers who are registered with New Jersey and “qualified out-of-state sellers”
may make tax-exempt purchases in New Jersey of property and services purchased for resale.
For more information, see Out-of-State Sales & New Jersey Sales Tax
.
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Accounting Methods
The accrual method of accounting must be used for Sales Tax records. Under the accrual
method, all items of income are included in the gross receipts when they are earned,
although
actual payment may not be received until later.
Example: Frank Smith, owner of Mr. F’s Appliance Store, sold a flat-screen television to a
customer in March, but did not actually receive full payment until May. He must include the
amount of the sale in his gross receipts for March and pay the Sales Tax due with his Sales Tax
return due April 20, even though he did not receive payment until May.
Keeping Records
New Jersey retailers are required to keep records and file New Jersey Sales and Use Tax returns.
In addition, records must be kept for Income Tax and, depending on the nature of the
business, other taxes as well. Maintaining good records will ensure the accuracy of tax returns
and will protect the business in the event of an audit or investigation by the State.
Sales Records
Retailers registered to do business in New Jersey are responsible for collecting Sales Tax and
remitting it to the State. They also can accept New Jersey exemption certificates. These
certificates exempt the purchaser from paying New Jersey Sales and Use Tax on property
and/or services. The seller must keep exemption certificates for at least four years from the
date of the last transaction covered by the certificate. Certificates must be in the physical
possession of the seller and available for inspection by the Division of Taxation. It is essential
that businesses maintain clear, accurate records of all sales.
There are two principles to remember when collecting Sales Tax:
1. Sellers hold any Sales Tax collected in trust for the State; and
2. All receipts are considered to be taxable until the contrary is established.
Keep daily records of the sales made. These records can be used to make monthly totals
showing the following information:
• Gross receipts from sales;
• Receipts from sales that are not subject to tax;
• Receipts from taxable sales;
• Purchases that are subject to Use Tax;
• Lease/rental transactions that are subject to tax;
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• Amount of Sales Tax due the State (whether collected or billed).
Use the amounts from these totals to complete the monthly and/or quarterly tax returns.
Retention of Records
All books, records, certificates, and other documents necessary to determine the tax liability
to New Jersey must be available for inspection by the Division of Taxation for at least four
years. If adequate records have not been kept, the State may estimate the tax liability of the
business based on any available information, including external indicators.
Photocopies or Electronically Stored Records
Books of account (cash books, ledgers, journals, etc.) must be kept. Photocopies or
electronically stored records are not acceptable for audit purposes. However, if certain
conditions are met, sales invoices, purchase invoices, credit memoranda, etc., may be
photocopied or electronically stored to be kept for inspection. If a business intends to destroy
the originals before the four year limit, written permission must be received from the Director
of the Division of Taxation.
Data Processing Records
Automatic data processing tax accounting can be used if it:
• Provides a method of producing visible records for verification;
• Traces any transaction back to the original source or forward to a final total;
• Has the ability to reconstruct transactions that do not have detailed printouts made at the
time the transactions were processed;
• Provides an audit trail designed to identify underlying documents such as sales invoices,
purchase invoices, credit memoranda, etc.; and
• Prepares a written general ledger with source references to coincide with financial reports
for the tax reporting periods.
Keep records such as punched cards, magnetic tapes, flash drives and disks for at least four
years. A description of the business system must be available and include:
• The application being performed;
• The procedures employed (flow charts, diagrams, etc.); and
• The controls used to ensure accuracy.
Document important changes in the system and their effective dates.
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Other Taxes and Fees
Atlantic City Luxury Sales Tax
The Atlantic City Luxury Tax is imposed on certain rentals, sales, and services within Atlantic
City. The Luxury Tax rate is 9% with the exception of alcoholic beverages sold by the drink,
which are subject to a rate of 3%. If the item is subject to both taxes, the State Sales Tax rate
is reduced to the extent that the city rate exceeds 6%, and the maximum combined Atlantic
City rate and New Jersey rate cannot exceed 12.625%. In addition, certain room rentals in
Atlantic City are subject to a 1% State Occupancy Fee. (See
State Occupancy Fee and Municipal
Occupancy Tax
below.) For more information, see Atlantic City: Luxury Tax, New Jersey Sales
Tax & Other Fees.
Cape May County Tourism Sales Tax
Certain businesses in Cape May County must collect a 2% Tourism Sales Tax on predominantly
tourism-related retail sales in addition to the State Sales Tax. At present, businesses in
Wildwood, Wildwood Crest, and North Wildwood are required to collect the Tourism Sales
Tax. “Tourism-related sales” include the following (if also taxable under the Sales and Use Tax
Act):
• Hotel, motel, and transient accommodations such as short-term rentals of rooms, homes
or other lodging*;
• Food and drink sold by restaurants, taverns, and other similar establishments for
consumption on or off the premises (including mobile sellers and other sellers of prepared
food), or by caterers (but
not
including vending machine sales); and
• Admission charges to any place of amusement, including charges for admission to rides,
sporting events and exhibitions, dramatic or musical arts performances, movie theaters,
and cover charges to nightclubs and cabarets.
In addition to the Tourism Sales Tax, the rent for every occupancy of a room in a hotel, motel,
and transient accommodations such as short-term rentals of rooms, homes or other lodging
or similar facility that is subject to the New Jersey Sales Tax also is subject to a Tourism
Assessment of 1.85% and a State Occupancy Fee of 3.15%. (See
State Occupancy Fee and
Municipal Occupancy Tax
below.)
The law authorizes Wildwood, Wildwood Crest, and North Wildwood to adopt or amend an
ordinance that imposes the 2% Tourism Sales Tax on charges for the rental of transient
accommodations which occur in Wildwood, Wildwood Crest, and North Wildwood. The Cape
May County Tourism Tax will apply to charges for the rental of transient accommodations
on
the first day of the first full month following 90 days after receipt of the ordinance by the State
Treasurer.
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State Occupancy Fee and Municipal Occupancy Tax
An Occupancy Fee of 5% is imposed on the rent for every occupancy of a room in a hotel,
motel, and transient accommodations such as short-term rentals of rooms, homes or other
lodging or similar facility in most New Jersey municipalities. The fee is imposed at a lower rate
in certain municipalities: 3.15% in Wildwood, Wildwood Crest, and North Wildwood; 1% in
Newark, Jersey City, and Atlantic City. The fee applies to room rentals that are subject to New
Jersey Sales Tax and is in addition to the Sales Tax.
A Municipal Occupancy Tax of up to 3% also may be imposed by any New Jersey municipality
(other than Newark, Jersey City, Atlantic City, Wildwood, Wildwood Crest, and North
Wildwood) that adopts an ordinance assessing the tax on occupancies in that municipality.
For more information, see Hotel Occupancies and New Jersey Taxes
.
Meadowlands Regional Hotel Use Assessment
A Meadowlands Regional Hotel Use Assessment of 3% is imposed on the rent for every
occupancy of a room in a hotel, motel or similar facility in the Hackensack Meadowlands
District, including any hotels located on State-owned land. The district designated by the New
Jersey Meadowlands Commission is a 30.4 square-mile area along the Hackensack River
covering portions of 14 municipalities in Bergen and Hudson Counties.
The assessment applies to room rentals that are subject to New Jersey Sales Tax and is in
addition to the Sales Tax and any other taxes or fees. For more information, see
Hotel
Occupancies and New Jersey Taxes.
Domestic Security Fee
Motor vehicle rental companies doing business in New Jersey are required to pay a $5 per day
Domestic Security Fee for each rental day a motor vehicle is rented under agreements of 28
days or less. The fee is due for the quarter in which the rental agreement ends and is separate
from and in addition to any Sales Tax due on the rental transaction. For more information, see
the Notice to Motor Vehicle Rental Companies
.
Motor Vehicle Tire Fee
A fee of $1.50 is imposed on the sale of new tires, including new tires that are component
parts of a new or used motor vehicle that is either sold or leased, if the transaction is subject
to New Jersey Sales Tax. The $1.50 fee is imposed per tire, including the spare tire sold as part
of a motor vehicle, and also applies to sales of new tires in connection with a repair or
maintenance service. It does not apply to the sale of recapped tires. The tire fee must be
collected from the purchaser by the retail seller and, in general, must be separately stated on
any bill, invoice, receipt, or similar document.
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Tobacco and Nicotine Products Wholesale Sales and Use Tax
The Tobacco and Nicotine Products Wholesale Sales and Use Tax is imposed on the sale, use,
or distribution of tobacco or nicotine products, other than cigarettes. The tax paid by the
distributor or wholesaler is calculated on the amount paid by the distributor or wholesaler to
buy the products from the manufacturer. Cigarettes are exempt from this tax.
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This document is designed to provide guidance to taxpayers and is accurate as of the date
issued.
