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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 

              Page 
 Date                Topic             Revision 
              Number 

                                       This revision updates information 
                     Taxability of 
 July 6, 2022 3 & 8                    about the taxability of medical 
                     Medical Cannabis  
                                       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 06625X .=
$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                                                                       Heating Pads 

 Blood Pressure Machines and Cuffs                                              Ice Packs 

Examples of mobility enhancing equipment include: 

 Canes                                                                          Wheelchairs 

 Crutches                                                                       Wheelchair Lifts 

 Hand Controls for Vehicles                                                      

For more information, see Health Care Products: Drugs, Grooming and Hygiene Products, 
Prosthetic Devices, Durable Medical Equipment, and Mobility Enhancing Equipment. 

Acne Products:                                                                  Astringents ................................................................E 
Creams or Lotions ............................................E                 Athlete’s Foot Treatments ...................................E 
Cleansers or Soaps ...........................................T                 Baby Bath Soaps—Liquid, Bar ...........................T 
Air Fresheners ..........................................................T      Baby Food .................................................................E 
Alcohol, Rubbing ....................................................E          Baby Formulas .........................................................E 
Alcohol, Swabs and Pads .....................................E                  Baby Lotions .............................................................T 
Alcoholic Beverages (prepackaged                                                Baby Pants ................................................................E 
or by the drink) ..................................................T            Baby Powder ............................................................T 
Allergy Relief Products .........................................E              Baby Shampoos ......................................................T 
Aluminum Foil .........................................................T        Baby Wipes ...............................................................E 
Ammonia ...................................................................T    Bags: 
Anesthetics ...............................................................E     Cloth, Plastic ..................................................... T 
Antacids .....................................................................E  Paper for household use  .............................. E 
Antibiotics .................................................................E  Baked Goods (see Prepared Food)……………* 
Antifungals ................................................................E   *Taxability depends on how product is sold. 
Antihistamines .........................................................E       Baking Cups: 
Antinauseants .......................................................... E      Foil  ......................................................................... T 
Antiperspirants ........................................................ T      Paper for household use ................................ E 
Arch Supports ..........................................................E       Baking Powder ........................................................ E 
Arthritis Relievers ...................................................E        Baking Soda ............................................................. E 
Artificial Tears ..........................................................E    Balloons ..................................................................... T 
Aspirins and Combinations ................................E                     Bandages ................................................................... T 
Asthma Preparations.............................................E               Band Aids .................................................................. T 

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Bar Mixes (liquid):                                                                  Breast Cream ............................................................ T 
Sweetened ........................................................... T              Breast Pump ............................................................. E 
Unsweetened ..................................................... E                  Breast Shells, Bra Pads .......................................... E 
Bath Beads, Oils, Sachets .....................................T                     Breath Freshener .................................................... T 
Bathing Caps ............................................................E           Bubble Bath .............................................................. T 
Bathroom Cleaners ................................................T                  Butane ........................................................................ E 
Batteries .....................................................................T     Cake Mixes ................................................................ E 
Batteries, Hearing aid ...........................................E                  Calling Cards, Telephone (prepaid): 
Bed Linens .................................................................T        Sale of Card......................................................... T 
Bed Pans for home use  ........................................E                     Additional Minutes .......................................... T 
Bee Sting Relievers ................................................E                Camera Lens and Eyeglass Cleaner Tissues.. T 
Beverage Flavorings/Enhancers—Liquid,                                                Candles ....................................................................... T 
Concentrated......................................................E                  Candy (see Candy) ................................................. T 
Beverage Powders (Kool-Aid,                                                          Taxable    unless product contains  flour 
lemonade, iced tea) .........................................E                       (e.g., Nestle Crunch®) or  requires 
Beverage Syrups:                                                                     refrigeration. 
Flavored ................................................................E           Canes .......................................................................... T 
Soda .......................................................................E        Sold pursuant to doctor’s prescription .... E 
Beverages, Sweetened:                                                                Canker Sore Preparations ................................... E 
Containing milk, milk products, or                                                   Cannabis: 
milk substitutes (soy, rice, etc.) ............E                                     Recreational………………………………………….T 
Containing more than 50% juice ..............E                                       Medical ...............................................................E 
Containing no milk products and                                                      Canned Goods: 
containing 50% or less juice .................T                                      Fruits .................................................................... E 
Beverages, Unsweetened  ...................................E                         Meats, Fish (except pet food)  ................... E 
Bibs ..............................................................................E Milk ...................................................................... E 
Bird Food ................................................................... T      Soup ..................................................................... E 
Birth Control Preparations .................................. E                      Vegetables ......................................................... E 
Biscuits, Crackers .................................................... E            Car Wash and Wax ................................................ T 
Blankets (except baby receiving blankets) .... T                                     Carbonated Beverages (see Beverages) 
Bleach—Liquid, Dry ............................................... T                 Carpet Cleaners ....................................................... T 
Blistex® (medicated) ............................................ E                  Carpet Deodorizers ...............................................T 
Blood Pressure Cuffs for home use  ................. E                               Castor Oil ...................................................................E 
Books (except certain textbooks                                                      Cat Food ....................................................................T 
approved by the school)  ............................... T                           CDs, Cassettes, DVDs ............................................T 
(see also Newspapers, Magazines, and                                                 Cereal Bars (see Candy) .......................................* 
Books and Specified Digital Products)                                                *Taxability depends on ingredients. 
Bottled Water:                                                                       Cereals ........................................................................E 
Sweetened .........................................................T                 Chapstick® (medicated) ......................................E 
Unsweetened ....................................................E                    Charcoal, Charcoal Briquettes ...........................E 
Braces—Ankle, Knee ............................................. E                   Cheese, Cheese Spreads ......................................E 
Bread and Rolls ....................................................... E            Chewing Gum ..........................................................T 

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Chewing Tobacco ...................................................T               Corn and Callus Removers .................................. E 
Chips—Chocolate, Butterscotch, etc.                                                Cornstarch ................................................................. E 
(for use in baking):                                                               Cosmetics .................................................................. T 
Sweetened .........................................................T               Costumes ................................................................... E 
Unsweetened ....................................................E                  Cotton Balls .............................................................. T 
Chips—Potato, Corn, etc.  ...................................E                     Cough Preparations .............................................. E 
Christmas Trees .......................................................T           Covid-19 Test Kits……………………………………….T 
Christmas Tree Skirts—Paper, Cloth ...............T                                Cream, Milk, Half and Half .................................. E 
Cigarette Filters .......................................................T         Crepe Paper .............................................................. T 
Cigarette Papers .....................................................T            Crutches ..................................................................... T 
Cigarettes ..................................................................T     Sold pursuant to doctor’s prescription . E 
Cigars ..........................................................................T Cups: 
Cleaning Liquids, Powders ..................................T                      Paper for household use ............................ E 
Clotheslines ..............................................................T       Plastic, Foam ...................................................T 
Clothespins ...............................................................T       Cuticle Remove .......................................................T 
Clothing (see Clothing and Footwear)                                               Dandruff/Seborrhea Shampoo..........................T 
Cocktail Onions, Olives ........................................E                  Decongestants ........................................................E 
Cocktail Sauces .......................................................E           Decorations—Paper, Plastic ...............................T 
Cocoa, Instant ..........................................................E         Dental Floss ..............................................................T 
Cod Liver Oil .............................................................E       Dental Rinse .............................................................T 
Coffee—Beans, Packaged, Instant ...................E                               Denture Adhesives, Preparations .....................T 
Coffee Filters—Paper for household use  ......E                                    Deodorants, Antiperspirants ..............................T 
Coffee Pot Cleaners ...............................................T               Deodorizers—Room, Car, Carpet .....................T 
Cold Preparations and Remedies .....................E                              Depilatories ..............................................................T 
Cold Sore Preparations ........................................E                   Detergents ................................................................T 
Combs ........................................................................T    Diabetic Supplies (lancets, needles, 
Computers: (see also Services)                                                     syringes, test strips, wipes, etc.) ................E 
Computer Systems .......................................T                          Diapers (including disposable) ..........................E 
Hardware Components ..............................T                                Diaper Liners ............................................................E 
Prewritten Computer Software ................ T                                    Diarrhea Aids ...........................................................E 
Condiments (ketchup, mustard, etc.) .............. E                               Digestive Aids ..........................................................E 
Condoms ................................................................... T      Digital Property (see Specified 
Confections (see Candy) ...................................... T                   Digital Products) ...............................................T 
Constipation Products .......................................... E                 Dinnerware (disposable): 
Contact Lens Care Products (including                                              Paper for household use ............................E 
saline solution) ............................................... T                 Plastic, Foam ...................................................T 
Contact Lens Cleaner, Solution ......................... T                         Dips—Cheese, Onion, etc.  .................................E 
Contact Lenses (prescription) ............................ E                       Dish Detergents ......................................................T 
Contraceptive Preparations ................................ E                      Disinfectants. ............................................................T 
Cooking Wine .......................................................... E          Distilled Water .........................................................E 
Copper Cleaner ....................................................... T           Diuretics .....................................................................E 
Corn and Callus Pads ............................................ T                Dog Food ..................................................................T 

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Doilies—Paper, Foil ...............................................T                Flea Collars ................................................................ T 
Douches:                                                                            Floor Cleaners and Polishes ............................... T 
Antiseptic, Anti-Infectious .........................E                              Floor Coverings, Rugs ........................................... T 
Cleaning, Deodorizing ................................T                             Floor Finishes (wax) ............................................... T 
Drain Openers, Cleaners ......................................T                     Floor Wax Remover ............................................... T 
Drawer Liners ...........................................................T          Flowers ....................................................................... T 
DVDs, CDs .................................................................T        Food Coloring .......................................................... E 
Dyes .............................................................................T Food Wraps: 
Ear Preparation, Ache Aids .................................E                       Aluminum Foil .................................................. T 
Ear Syringes ..............................................................E        Paper Freezer Wrap for household use .. E 
Eczema Preparations .............................................E                  Plastic Storage Bags ...................................... T 
Eggs—Fresh, Dried ................................................E                 Plastic Wrap ...................................................... T 
Electrical Supplies...................................................T             Waxed Paper for household use  ............... E 
Energy Bars (see Candy) ......................................*                     Foot Care Preparations ........................................ E 
*Taxability depends on ingredients.                                                 Foot Deodorizers .................................................... T 
Epsom Salt:                                                                         Footwear (see Clothing and Footwear) 
Garden Use........................................................ T                Freezer Packs (blue ice) ........................................ T 
Medical Use (for humans)  .......................... E                              Frozen Foods (see also Ice Cream)  ................. E 
Expectorants ............................................................. E        Fruit ............................................................................. E 
Eye Preparations ..................................................... E            Fruit Drinks: 
Eyeglass Cleaner Tissues ..................................... T                    Containing 50% or less juice ...................... T 
Eyeglass Frames  (fitted with  corrective                                           Containing over 50% juice .......................... E 
lenses) ......................................................................... E Fuels: 
Eyeglasses (corrective) ......................................... E                 Charcoal ............................................................. E 
Fabric Softeners ...................................................... T           Charcoal Lighter .............................................. E 
Facial Cleansing Pads ............................................ T                Cigarette Lighter Fluid .................................. E 
Feminine Napkins, Tampons .............................. E                          Fungicides ................................................................. E 
Fever Blister Aids ....................................................E            Furniture .................................................................... T 
Fiberglass Cleaner ..................................................T              Furniture Polishes and Cleansers  .................... T 
Film, Film Processing .............................................T                Fuses ...........................................................................T 
Firewood ...................................................................E       Garbage Pails ...........................................................T 
First Aid Kits..............................................................T       Garden Supplies......................................................T 
First Aid Products:                                                                 Gatorade ....................................................................T 
Bandages ........................................................... T              Gelatin and Gelatin Desserts ..............................E 
Healing Agents, Solutions, etc. ................. E                                 Gift Certificates ........................................................E 
Fishing Bait ............................................................... T      Gift Wrap, Bows, Boxes, Tags .............................T 
Flags:                                                                              Gloves .........................................................................E 
State of New Jersey........................................ E                       Glucose Meters for home use  ...........................E 
United States of America. ............................ E                            Granola Bars (see Candy) ....................................* 
All Others ........................................................... T            *Taxability depends on ingredients. 
Flashlights ................................................................. T     Greeting Cards ........................................................T 
Flatware ...................................................................... T   Grenadine ..................................................................E 

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Grip Tape ...................................................................T        Instant Cocoa, Coffee, Tea .................................. E 
Guest Towels—Paper for household use  ......E                                         Insulin ......................................................................... E 
Hair Care Products:                                                                   Iodine, Tincture of .................................................. E 
Brushes, Combs ...............................................T                       Itch, Rash Relievers ................................................ E 
Conditioners .....................................................T                   Jams and Jellies ....................................................... E 
Curler Papers ....................................................T                   Jewelry Cleaners ..................................................... T 
Rinses ..................................................................T            Juice Drinks: 
Shampoos, including Minoxidil-based ...T                                              Containing 50% or less juice ........................ T 
Halloween Masks ...................................................T                  Containing over 50% juice ............................ E 
Hand Cleaners .........................................................T              Keys ............................................................................. T 
Hand Lotion ..............................................................T           Laundry Soaps and Detergents ........................ T 
Hay Fever Aids .........................................................E             Lawn Bags ................................................................. T 
Headache Relief Aids ............................................E                    Laxatives .................................................................... E 
Health/Fitness Equipment (weights,                                                    Leather Cleaners (saddle soap) ......................... T 
exercise balls, steps, etc.) .............................T                           Leavening Agents ................................................... E 
Heating Pads ............................................................E            Lemonade: 
Hemorrhoid Treatments ......................................E                         Liquid, sweetened ............................................. T 
H.I.V. Testing Kits (only when sample is                                              Powdered............................................................. E 
sent to lab for analysis and report) ..........E                                      Lice Treatments (for humans) ............................ E 
Hosiery, all types ....................................................E              Light Bulbs ................................................................ T 
Hot Chocolate, Instant .........................................E                     Lighter Fluid ............................................................. E 
Hypodermic Syringes and Needles:                                                      Linens .......................................................................... T 
Diabetic Use ......................................................E                  Liners—Garbage Can, Shelf, etc. ...................... T 
Disposable (for nondiabetic use) ..............T                                      Lint Removers .......................................................... T 
Reusable (for home use) ..............................E                               Lip Balms (medicated) .......................................... E 
Ibuprofen ...................................................................E        Lipstick ........................................................................ T 
Ice ................................................................................E Liquid Nicotine…………………………………………...T 
Ice Buckets, Ice Chests..........................................T                    Litter Box Liners ......................................................T 
Ice Cream:                                                                            Lotions: 
Individually wrapped bars,  sandwiches,                                               Cleansing .............................................................T 
popsicles, cones                                                                      Moisturizing ........................................................T 
(single item or by the box) ............................ E                            Lunch Bags: 
By the gallon or part of a gallon ................. E                                 Paper for household use  ..............................E 
Ice Cream Cones (hand-dipped) ...................... T                                Plastic ..................................................................T 
Iced Tea:                                                                             Lye  ..............................................................................T 
Liquid, sweetened ............................................. T                     Magazines (or periodicals), qualified: 
Liquid, unsweetened ....................................... E                         (see Newspapers, Magazines, and Books) 
Powdered, sweetened or unsweetened ... E                                              Sold as single copies (hard copies) ..........T 
Icing/Frosting ........................................................... E          Sold as single copies (electronic) ..............E 
Ingrown Nail Preparations .................................. E                        Sold by subscription ......................................E 
Insect Bite and Sting Preparations ................... E                              Makeup ......................................................................T 
Insecticides, Repellents ........................................ T                   Makeup Remover ...................................................T 

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Maraschino Cherries .............................................E Oven Cooking Bags:
Marshmallow Fluff .................................................E Paper for household use ................................ E
Marshmallows..........................................................T Plastic or Aluminum ........................................ T
Matches .....................................................................T Ovulation Testing Kits .......................................... T
Meats ..........................................................................E Oxygen ....................................................................... E
Medicines (for pets) ..............................................T Paint Remover ......................................................... T
Menstrual Cramp Relievers ................................E Paper Bags for household use .......................... E
Metal Cleaners and Polishes ..............................T Paper Goods (plates, towels, etc.)
Mildew Remover .....................................................T for household use ............................................ E
Milk (fresh, powdered), Cream, Paperback Books .................................................... T
Half and Half .....................................................E Peroxide, Hydrogen (for medical use) ............ E
Mineral Oil ................................................................E Pet Foods .................................................................. T
Mineral or Herbal Supplements Pet Shampoo ........................................................... T
(in form of pills, capsules, etc.) ..................E Pet Supplies .............................................................. T
Mixes for Soups ......................................................E Petroleum Jelly ........................................................ E
Mixes for alcoholic beverages: Pets .............................................................................. T
Liquid, sweetened (see Beverages) Pickles ......................................................................... E
Liquid, unsweetened......................................E Pies, Pie Crusts ........................................................ E
Powdered ...........................................................E Pillows ......................................................................... T
Mops, Mop Handles ..............................................T Place Mats:
Motion Sickness Remedies .................................E Cloth and plastic ............................................... T
Mouthwash ...............................................................T Paper for household use ................................ E
Movies (see Specified Digital Products) ........T Plants (including fruit, vegetable) .................... T
Muscle Ache Relievers ..........................................E Plates:
Music (see Specified Digital Products) ........... T Paper for household use ................................E
Nail Biting Deterrents ........................................... T Plastic, Foam .......................................................T
Nail Polish ................................................................. T Poison Ivy and Oak Treatment
Nail Polish Remover .............................................. T Preparations ....................................................E
Napkins, Table—Paper for household use ... E Polishing Cloths and Mitts ..................................T
Nasal Sprays, Decongestants ............................. E Popcorn:
Newspapers .............................................................. E Popped, sweetener added ........................T
Nicotine Gum or Patch ......................................... E Popped, no sweetener added ..................E
Non-stick Cooking Sprays .................................. E Unpopped, any flavor..................................E
Nursing Bottles, Nipples, Funnels .................... T Powdered Beverage Mix ......................................E
Nursing Pads—Paper ............................................ E Pregnancy Testing Kits .........................................T
Nuts: Prescription Contraceptives ...............................E
Sweetened (see Candy) Prescription Drugs (for human use) ................E
Unsweetened ..................................................... E Presoaks, Laundry ..................................................T
Oil—Cooking, Salad .............................................. E Preserves ...................................................................E
Olives .......................................................................... E Pretzels (unheated) ................................................E
Oral Pain Relievers ................................................. E Propane ......................................................................E
Oven Cleaners ......................................................... T Puddings ....................................................................E

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Pumpkins: Sponges ..................................................................... T
Used for decoration .....................................T Stain and Spot Remover ...................................... T
Used for food .................................................E Starch:
Rainhoods .................................................................E Corn ..................................................................... E
Ringtones (see Specified Digital Products) ..T Laundry ............................................................... T
Rock Salt ....................................................................T Static Remover ........................................................ T
Rogaine® Foam/Solution ...................................E Stationery .................................................................. T
Rubber Gloves .........................................................E Steel Wool ................................................................. T
Rug Cleaners and Shampoos .............................T Stirrers—Wood, Plastic ........................................ T
Rug Deodorizers .....................................................T Straws:
Salads (potato salad, coleslaw, etc.) ................* Paper for household use .............................. E
(see Prepared Food) Plastic .................................................................. T
*Taxability depends on how product is Sugar and Sugar Substitutes ............................. E
sold. Sunburn Relief Products ...................................... E
Salt and Salt Substitutes ......................................E Sunglasses................................................................. T
Sandwich Bags: Sunscreens ................................................................ T
Paper for household use ............................E Surgical Adhesive ................................................... T
Plastic ..................................................................T Table Covers:
Sanitary Napkins, Tampons ................................E Paper for household use .............................. E
Scouring Pads ..........................................................T Plastic .................................................................. T
Seeds—Flower or Vegetable..............................T Tampons (and like products) ............................. E
Shampoos ................................................................. T Tape ............................................................................. T
Shaving Cream ........................................................ T Tea—Prepackaged, Dry, or Instant ..................E
Shelf Liners................................................................ T Tears, Artificial .........................................................E
Shoe Inserts (Odor Eaters) .................................. E Teething Lotions .....................................................E
Shoe Laces ................................................................ E Telephone Calling Cards (prepaid):
Shoe Polish ............................................................... T Additional Minutes .........................................T
Shoes (see Clothing and Footwear) Sale of Card .......................................................T
Shower Caps ............................................................ T Tenderizers (spices) ...............................................E
Sinus Relievers ......................................................... E Thermometers (reusable) for home use ........E
Skin Bleaches ........................................................... T Tile Cleaners .............................................................T
Skin Irritation Relievers ........................................ E Tissue—Facial and Toilet
Sleep Aids.................................................................. E for household use .........................................E
Snuff ............................................................................ T Tobacco .....................................................................T
Soap ............................................................................ T Toilet Bowl Cleaners ..............................................T
Soap Pads .................................................................. T Toilet Bowl Deodorizers .......................................T
Soup Mixes ............................................................... E Tooth Ache Relievers ............................................E
Spaghetti ................................................................... E Tooth Polish .............................................................T
Sparklers, Party Poppers, Glow Worms .......... T Toothbrushes ...........................................................T
Specified Digital Products (see Specified Toothpaste ................................................................T
Digital Products).............................................. T Toothpicks ................................................................T
Spices .......................................................................... E Towelettes for household use ..........................E

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Towels:                                                                          Water Repellent ...................................................... T 
Cloth ....................................................................T      Wax .............................................................................. T 
Paper for household use  ..............................E                         Wax Remover ........................................................... T 
Trashbags and Liners ............................................T               Waxed Paper for household use  ...................... E 
Undergarments, Disposable ...............................E                       Wheelchairs .............................................................. T 
Underpads, Disposable—Paper ........................E                            Sold pursuant to doctor’s prescription... E 
Upholstery Cleaners ..............................................T              Whipped Cream ...................................................... E 
Vacuum Cleaner Bags:                                                             Whiteners, Laundry ................................................ T 
Cloth, Plastic .....................................................T            Wigs ............................................................................ T 
Paper for household use  ..............................E                         Window Cleaning Liquids ................................... T 
Vaporizer Tablets.................................................... T          Windshield Washer Solution .............................. T 
Vaseline®  ................................................................ E    Wipes: 
Vegetables ................................................................ E    Handi Wipes® (rayon) .................................. T 
Vitamins ..................................................................... E Witch Hazel .............................................................. E 
Wart Removers ........................................................ E         Wool Washes ........................................................... T 
Water:                                                                           Wrapping Paper, Bows ......................................... T 
Sweetened ......................................................... T            Wraps: 
Unsweetened .................................................... E               Foil, Plastic ......................................................... T 
Water Conditioners ............................................... T             Paper for household use  .............................. E 
Water Pills ................................................................. 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:                                                             Appliance Repairs ..................................................T 
Professional Services .....................................E                     Appraisals—Jewelry, Real Estate, etc. .............E 
Electronic Filing Charges ..............................T                        Architectural Services (in general) ...................E 
Admission Charges:                                                               Armored Car Services ...........................................T 
Spectator Sports (baseball games,                                                Automobile Repairs: 
basketball games, professional                                                   Inspection Service ...........................................E 
wrestling events, etc.) ..............................T                          Labor ....................................................................T 
Participant Sports (bowling, fishing,                                            Parts .....................................................................T 
swimming, etc.) ..........................................E                      Barber Shop Services ............................................E 
Places of Amusement (movie theaters,                                             Beauty Parlor Services ..........................................E 
amusement parks, trade shows,                                                    Beeper and Paging Services ...............................T 
craft shows, etc.) ........................................T                     Boat Docking Fees: 
Advertising Services (in general) ......................E                        Slip Rentals ........................................................E 
Alarm Monitoring ...................................................T            Storage (water or land) .................................T 
Animal Boarding at Seller’s Facility .................T                          Bookkeeping Services ...........................................E 
Animal Grooming ...................................................T             Calligraphy ................................................................T 
Answering Services, Telephone ........................T                          Cable or Satellite Television Subscription .....E 

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Car Washing .............................................................T systems) ............................................................T
Carpet Cleaning ......................................................T Gift Wrapping .........................................................T
Catering Services ....................................................T Information Services .............................................T
Child/Day Care ........................................................E Insurance Premiums ..............................................E
Chimney Sweeping (residential) ....................... E Interior Design .........................................................E
Cleaning Services (janitorial) .............................. T Internet Access Charges ......................................E
Computer Maintenance/Repair ........................ T Investigation and Detective Services ..............T
Credit Check/Report ............................................. T Jewelry:
Credit Repair Services ........................................... E Cleaning .............................................................T
Data Processing Services ..................................... E Engraving ...........................................................T
Debt Collection ....................................................... E Sizing ...................................................................T
Delivery Charges: Landscaping Services ............................................T
On Taxable Items ............................................ T Laundry Services:
On Nontaxable Items .................................... E Clothing ..............................................................E
Disc Jockey ................................................................ E Other ...................................................................T
Dry Cleaning: Lawn Mowing Services .........................................T
Clothing .............................................................. E Locker Rentals .........................................................T
Other ................................................................... T Mail Processing Services for
Document Fees Imposed by Motor Vehicle Advertising/Promotional
Dealerships: Material:
For taxable motor vehicle sales ................. T Distributed in NJ.......................................... T
For nontaxable motor vehicle sales ......... E Distributed outside NJ .............................. E
Separately stated fees for title and Maintenance Agreements (in general)........... T
registration charged by New Jersey Manufacturer’s Rebate (automobile, etc.) .... T
Motor Vehicle Commission ................... E Massage Services ................................................... T
Electronic Filing Charges ..................................... T Provided pursuant to doctor’s
Employment Agency Fees ................................... E Prescription ................................................... E
Extended Warranty Agreements ...................... T Membership Fees*:
Facsimile (Fax) Services ........................................ T Discount Clubs ................................................. E
Floor Covering Installation ................................. T Health/Fitness/Athletic/Sporting Clubs . T
Garbage Removal: Shopping Clubs ............................................... T
Contractual (30 days or more) ................... E Professional/Social Clubs ............................. E
Noncontractual ................................................T
Home Repairs (except residential heating

*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 At facility owned/operated by
Parking: employer ..........................................................E
Parking, storing, or garaging a Atlantic City casino hotel $3 parking
motor vehicle .................................................T fee .......................................................................E

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Parking receipts subject to tax imposed Purchase of Clothing Included ............. E
by any other law or ordinance .................E Services Only ............................................... T
Provided by a municipality, county, or Snow Removal ......................................................... T
municipal/county parking authority ......E Space for Storage ................................................... T
Provided to employee by employer ..........E Storage Service Charges ...................................... T
Residential ...........................................................E Tanning Sessions ....................................................T
Pest Control: Tattooing ...................................................................T
Inspection ............................................................E By prescription in conjunction with
Treatment ............................................................T reconstructive breast surgery.....................E
Pet Sitting at Owner’s Home .............................E Telecommunications Services
Photocopying Services .........................................T (landline and wireless telephone,
Photographer’s Services ......................................T telegraph, pagers, alarm monitoring, etc.)
Prewritten Computer Software Delivered ...............................................................................T
Electronically: Telephone Answering Services .........................T
Sold to individuals .......................................... T Tips and Gratuities (separately stated
Used directly in the conduct of the and paid in full to employees) ...................E
purchaser’s business/trade ......................... E Towing ........................................................................E
Printing Services ..................................................... T Transportation (see alsoDelivery Charges, ) .E
Professional Services (doctor, lawyer, etc.) ... E Trash Removal:
Restaurant Meals .................................................... T Contractual (30 days or more) ................... E
Safe Deposit Box Rental ...................................... T Noncontractual ................................................ T
Scanning—Photos, Records, etc. ...................... T Travel Agency Fees ................................................ E
Security Guard and Patrol Services ................. T Typing Services ....................................................... E
Security Systems Services ................................... T Utilities (natural gas, electricity) ....................... T †
Service Contracts (in general) ............................ T Videography ............................................................. T
Shoe Repair .............................................................. E Website Design ....................................................... E
Silk-Screening, Monogramming, Website Hosting ..................................................... E
Embroidering: 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

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• 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 

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New Jersey Sales Tax Guide

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

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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.

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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)                    Formal Wear 
Arch Supports                                  Garters and Garter Belts 
Athletic Supporters                            Girdles 
Baby Receiving Blankets                        Gloves and Mittens (for general use) 
Bathing Caps                                   Hand Muffs 
Bathing Suits                                  Hats and Caps 
Beach Capes and Coats                          Head and Neck Scarves and Bandannas 
Belts and Suspenders                           Hosiery and Peds 
Bibs                                           Incontinence Briefs 
Boots                                          Lab Coats 
Bowling Shirts (if suitable for ordinary       Leotards and Tights 
street wear)                                   Neckties 
Coats, Jackets, and Wraps  (for  either        Overshoes 
evening or daytime wear)                       Pantyhose 
Costumes    (e.g.,  Halloween,   dance;        Rainwear 
whether for adults or children)                Rubber Gloves (for home or work use) 
Diapers (including disposable, whether         Rubber Pants 
for adults or children)                        Safety Clothing (normally worn in 
Djellabas                                      hazardous occupations) 
Dress Shields                                  Sandals 
Dresses (including evening wear)               Saris 
Ear Muffs                                      Shoe Insoles (e.g., Dr. Scholl’s®) 
Footlets                                       Shoe Laces 

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                                                               New Jersey Sales Tax Guide 

Shoes  (including  safety  shoes,  sneakers         Thermal Underwear 
and tennis shoes)                                   Underwear 
Shoulder Pads (for dresses, jackets, etc.)          Uniforms  (athletic,  school,  scout,  work, 
Ski Masks                                           etc.) 
Sleepwear                                           Wedding Apparel 
Slippers                                            Work Clothes, Work Uniforms 
Socks                                               Yarmulkes, Turbans, and Fezzes 
Steel-Toed Shoes 
Stockings 

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                                     Protective Goggles 
Clean Room Apparel and Equipment                    Respirators (paint or dust) 
Ear and Hearing Protectors                          Safety Glasses and Goggles 
Face Shields                                        Safety Belts 
Hard Hats                                           Tool Belts 
Helmets                                             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:                                            Golf Shoes 
Athletic Shoes (cleated or spiked)                  Hand and Elbow Guards 
Ballet and Tap Shoes                                Helmets (sports and motorcycle) 
Baseball and Hockey Gloves                          Ice Skates 
Bicycle Shorts (padded)                             Life Preservers and Vests 
Bowling Shoes                                       Mouth Guards 
Fishing Boots (waders)                              Protective Masks 
Gloves (e.g., baseball, bowling, boxing,            Roller Blades 
hockey, golf)                                       Roller Skates (boot and screw-on) 
Goggles (nonprescription)                           Shin Guards and Padding 

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                                                              New Jersey Sales Tax Guide 

Shoulder Pads                                   Sweatbands 
Ski Boots                                       Swim Fins 
Skin Diving Suits                               Track Shoes and Cleats 
Snorkel and Scuba Masks                         Wetsuits and Fins

Exempt: 
Athletic Supporters                             hunting, skating, and skiing apparel but 
Children’s Sports and Play Uniforms             suitable for general  outdoor wear  and 
(e.g., football, baseball, karate)              commonly worn other than in a particular 
Hooded Shirts                                   sport) 
Jogging or Running Shoes, Suits                 Pullovers,    Turtlenecks,     and Other
Knitted Caps or Hats                            Sweaters 
Overshoes,  Coats,  Mittens,  Parkas,  and      Ski Masks 
Trousers (sometimes sold in the trade as 

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                                           Hats 
Capes                                           Neck Scarves 
Coats                                           Jackets 
Collars                                         Vests 
Ear and Hand Muffs                              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                       Belt Buckles (sold separately) 
Barrettes                                       Bobby Pins 

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                                                      New Jersey Sales Tax Guide 

Briefcases                                  Key Cases 
Cosmetics                                   Key Rings 
Costume Masks (sold separately)             Patches and Emblems (sold separately) 
Elastic and Fur Ponytail Holders            Shower Caps 
Hair Bows                                   Sunglasses (nonprescription) 
Hairclips                                   Sweatbands 
Hairnets                                    Umbrellas 
Handbags and Shoulder or Tote Bags          Wallets and Cell Phone Cases 
Handkerchiefs                               Watches 
Headbands                                   Watch Bands 
Jewelry                                     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                         Ribbons 
Buttons                                     Seam-Binding and Bias Tape 
Denim and Leather Patches                   Snaps, Hooks, and Eyes 
Elastic                                     Thread 
Fabrics                                     Yarn 
Lace                                        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                                       Needles 
Fabrics  and  Yarns  (used  to  make  items Patterns 
other than apparel such as rugs, pillows,   Pins 
etc.)                                       Sewing Machines 
Instruction Books                           Scissors 
Knitting Needles                            Tape Measures 
Measuring Tapes                             Thimbles 

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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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New Jersey Sales Tax Guide

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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New Jersey Sales Tax Guide

• 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. 

Connect With Us 
 Email your State tax questions; 

 Visit a Regional Information Center;  

 Call (609) 292-6400;  

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 This document is designed to provide guidance to taxpayers and is accurate as of the date 
 issued.  

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