Sales Tax in New Jersey: A Complete Guide for Ecommerce Sellers

New Jersey has a flat 6.625% rate with no local additions and two seller-favorable rules that distinguish it from most states: clothing is broadly exempt (no price cap), and separately stated shipping is not taxable. These rules matter for apparel sellers and any ecommerce seller who separately itemizes shipping charges. New Jersey is not an SST member state and must be registered directly through the Division of Taxation.

Quick reference

Economic nexus

New Jersey’s OR threshold: $100,000 in gross sales OR 200 or more separate transactions into New Jersey in the current or prior calendar year. Either condition alone triggers registration.

New Jersey enacted its economic nexus rules effective November 1, 2018.

Physical nexus

Physical presence in New Jersey creates nexus without any threshold:

• Warehouse, office, or storage facility in New Jersey
• Amazon FBA inventory in New Jersey fulfillment centers
• Employees, agents, or independent contractors in New Jersey
• Sales representatives in New Jersey

New Jersey’s proximity to New York City means many businesses with NY operations have New Jersey employees or facilities, creating physical nexus.

Registration

Register through the New Jersey Division of Taxation via its online registration portal (nj.gov/treasury/taxation). Registration is free. New Jersey issues a Certificate of Authority.

Tax rates

State rate: 6.625% flat

No local additions: New Jersey does not allow counties or municipalities to levy additional sales taxes. The 6.625% state rate is the only rate statewide.

Urban Enterprise Zones (UEZ): Designated economically distressed areas in New Jersey have a reduced 3.3125% rate (half the standard rate) for purchases made at qualifying businesses physically located within the zone. For ecommerce sellers shipping to UEZ addresses, the standard 6.625% rate applies: the UEZ rate applies to in-person retail purchases at UEZ businesses, not to remote delivery.

What’s taxable

Generally taxable: Electronics, furniture, sporting goods, toys, most tangible personal property.

Generally exempt:

• Prescription medications
• Most food for human consumption (groceries)
• Clothing and footwear (see below, broad exemption)
• Residential utilities
• Agricultural supplies

New Jersey’s clothing exemption: New Jersey broadly exempts clothing and footwear with no price cap. Any clothing or footwear item is exempt regardless of cost. Exceptions include:

• Fur clothing
• Accessories: handbags, wallets, jewelry, watches, sunglasses
• Protective equipment designed for sport
• Uniforms (some categories)

Notable New Jersey rules:

• Digital products: New Jersey taxes specified digital products, including downloaded software, digital audio, and digital audiovisual works
• SaaS: New Jersey taxes SaaS, remotely accessed software is taxable as a digital product
• Food: New Jersey broadly exempts food for home consumption. Prepared food and candy are taxable

Shipping taxability

New Jersey does not tax separately stated delivery charges. When shipping appears as a separate line item on the invoice, it is not taxable, regardless of whether the shipped goods are taxable.

When shipping is bundled into the sale price (not separately stated), the entire price including shipping is treated as the sale price and taxed if the goods are taxable.

Practical implication: Configure your ecommerce checkout to display shipping as a separate line item on New Jersey orders. This preserves the exemption on every shipment.

Marketplace facilitator rules

New Jersey enacted marketplace facilitator legislation effective November 1, 2018. Qualifying marketplace facilitators collect and remit New Jersey sales tax on marketplace-facilitated sales.

Remote sellers whose only New Jersey sales are through marketplace facilitators and who have no physical nexus may not need to separately register. Sellers with New Jersey physical nexus must register regardless.

State-specific notes

Clothing exemption, no price cap: New Jersey’s clothing exemption applies to any item of clothing regardless of price. A $2,000 coat is exempt the same as a $15 t-shirt. For apparel sellers, New Jersey should be configured as a clothing-exempt state in the calculation engine, and the shipping on clothing-only orders should also be exempt.

Shipping exemption: New Jersey joins Pennsylvania among major states that do not tax separately stated shipping. For sellers who currently include shipping in product prices, switching to separately stated shipping in New Jersey reduces the taxable base.

No local complexity: New Jersey’s flat statewide rate eliminates all rate lookup complexity. Any New Jersey address: 6.625%.