New Jersey’s sales tax system is relatively straightforward, with a single statewide rate applied consistently across all counties. That simplicity, however, doesn’t remove the responsibility of collecting, reporting, and remitting sales tax accurately. Staying compliant is essential for every business operating in the Garden State.
What is the sales tax rate in New Jersey?
The statewide sales tax rate is 6.625%. Since there is no local sales tax jurisdiction, businesses only have one simple rate to keep track of statewide.
How to calculate sales tax in New Jersey?
To calculate sales tax, multiply your total sales by 0.06625. The result is the amount you owe. While the math is simple, manually tracking and reporting sales tax can become tedious and error-prone, especially for businesses processing multiple transactions daily. Automating this process with a tool like DAVO saves time and reduces risk so you can stay focused on running your business.
Use our sales tax calculator
For a quick calculation, enter New Jersey’s sales tax of 6.625% and your total sales into our sales tax calculator to see how much you owe.
Are all goods taxable in New Jersey?
No. Many essential items are exempt from sales tax. For example, unprepared food, most groceries, prescription medications, and medical supplies are not taxable. For the most up-to-date list of exemptions, refer to the latest Tax Guide from the New Jersey Division of Taxation.
Is there sales tax on restaurant food in New Jersey?
Yes. While groceries and unprepared food are exempt, prepared meals, such as those served in restaurants, are taxable. The Division of Taxation provides clear guidelines on what qualifies as “prepared food.”
Does New Jersey have sales tax on clothes?
Most clothing and footwear are exempt from sales tax. However, exceptions include fur clothing, accessories, athletic or recreational gear, and protective equipment (unless required for everyday work). The Division of Taxation’s guide will have more details on taxable apparel.
Are all services taxable in New Jersey?
Not all services are taxable. For example, pet grooming services are taxable, while child care services are not. The taxability depends on the type of service, so it’s important to review state guidance to confirm.
Who pays sales tax?
In New Jersey, sales tax is a pass-through tax. Customers pay the tax at the point of sale, and businesses collect it on the state’s behalf. Managing this can be time-consuming, especially if you have many transactions each day. DAVO can automate the process so you stay compliant and free up time for your business.
What is the business owner responsible for?
Business owners must collect sales tax, hold it securely, and remit it to the state on time and in full. Some states offer discounts or vendor compensation for this work, but New Jersey does not. To see which states provide discounts, explore our full guide on sales tax vendor compensation.
How do I collect sales tax in New Jersey?
Before you can collect sales tax in New Jersey, your business must register for a sales tax permit with the New Jersey Division of Taxation. Registration can be completed online or by submitting the required forms by mail. To apply, you’ll need a federal EIN from the IRS. Once your application is approved and any fees are paid, you’re authorized to begin collecting sales tax. Since sales tax is a pass-through tax, you simply add it to the final bill for your customers.
With DAVO, there’s no need to worry about the details. DAVO connects directly with your existing POS system and automatically collects the sales tax for you.
Make your sales tax less taxing with DAVO.
When is my sales tax payment due in New Jersey?
Sales tax returns are due on the 20th of the month. How often you file depends on your revenue and the amount of tax you collect. Large-volume businesses usually file monthly, while low-volume businesses may qualify for quarterly or annual filing. Check with the Division of Taxation to confirm your filing frequency.
How to pay New Jersey sales tax?
New Jersey businesses can file and pay sales tax either online or by mail. The fastest and most secure option is to file electronically through the Division of Taxation’s online portal, where you can pay by credit card, debit card, or e-check. Filing by mail is also available, but it’s generally slower and less secure.
Instead of managing this yourself, DAVO handles payment automatically. From collecting to preparing and submitting your sales tax payments, DAVO ensures your sales tax is filed accurately and on time – guaranteed.
Where does revenue from sales tax go?
Sales tax collected in New Jersey goes to the State Treasury. These funds support essential services like schools, road construction, and police and fire protection.
How to manage tax-exempt sales?
Some organizations, such as schools or religious groups, are exempt from paying sales tax. To sell tax-free, they must provide you with an exemption certificate at the time of sale. You’re required to keep this certificate on file. If you don’t, you could be held responsible for paying the tax during an audit.
What happens if I miss a payment?
New Jersey enforces strict penalties for late filing or payment. The late filing penalty is 5% of the tax due for each month (or part of a month) the return is late, up to a maximum of 25%. The state may also charge $100 for each month a return is late. Always confirm the latest penalties with the Division of Taxation.
How DAVO helps with New Jersey sales tax
Ever miss a New Jersey state sales tax payment deadline? Or face penalties because of it? Do you worry about earmarking sufficient funds for your New Jersey sales tax obligations or question the cost efficiency of your current bookkeeping solution?
If so, DAVO is your answer. It’s specifically designed for Garden State small business owners, including pizzerias in Hoboken, boutiques in Princeton, and service providers in Cherry Hill, who need to focus on customers and growth rather than tax collection and filing. We’ll handle all your sales tax responsibilities.
DAVO automates the New Jersey sales tax cycle for businesses, collecting funds daily, preparing documentation, and submitting payments. It works in perfect harmony with your existing POS system, significantly reducing manual processes. And because DAVO helps ensure your New Jersey sales taxes will be remitted accurately and punctually, you gain both peace of mind and valuable time to devote to your business priorities.
Simplify your sales tax with DAVO by selecting your POS system.
Additional New Jersey sales and use tax information:
New Jersey Division of Taxation
(609) 826-4400
