New Jersey is a state located in the northeastern region of the United States has almost 130 miles of Atlantic coast. The state offers peaceful living and easy commuting to New York City as well as natural beauty, outstanding food, lively locals, excellent educational institutes, and a good economy.
All these perks, along with a favorable business environment, and plenty of employment opportunities, forces thousands of people to move to the Garden State.
If you are mulling over to relocate, expand, or start your business in NJ State, it is essential to learn about the New Jersey Sales Tax. To help you with this, our experts have put together a great guide on New Jersey Sales Tax, which makes your business a lot easier. And once you are familiar with NJ Sales Tax calculation, you can always use our New Jersey Sales Tax Calculator to instantly calculate your sales tax.
Businesses and Sellers who have Nexus are required to pay Sales tax to New Jersey on the retail sales of tangible personal property and taxable service. They must collect, manage, and transfer it to the New Jersey Division of Revenue and Enterprise Services while staying in compliance with state laws and avoid penalties and interest.
The sales tax determined on four factors:
To calculate Sales Tax in New Jersey, follow the steps below:
As a business owner, you are only required to collect sales tax if you are eligible for collecting sales tax and have Sales Tax Nexus in the New Jersey State. And to determine your Nexus in New Jersey, you must have any of the following:
Once you have determined that your Nexus is with New Jersey, next is to deduce the Sales Tax rate (State + Local Sales Tax) applicable on your product, for which you can refer the tables below:
As New Jersey only collects statewide sales tax and no other local sales tax, so tax charged would be 6.625%, regardless of location. However, there are the following two exceptions:
After determining the sales tax rate according to the location and type of purchases, it is easy to calculate the sales tax amount charged on the product and gross price (amount after tax) of a product.
Example # 1:
For instance, you are selling a Portable Speakers on your store in Golden Triangle, New Jersey, having a net price tag of $55. The amount that a buyer has to pay (including sales tax) on a check out would be:
Net Price (amount before Tax) of a Portable Speakers: $15
Total Sales Tax rate: 0.00% (Golden Triangle) + 0.00% (Jackson County) + 6.625% (New Jersey State) = 6.625%
Total Sales Tax amount = $15 x 6.625% = $1
Gross Price (Amount after Tax) = 15 + 1 = $16
It means the buyer has to pay $16 for a Portable Speakers on a cash counter.
Using our Sales Tax Calculator:
All of the steps mentioned above can be skipped to get an instant result using our Sales Tax Calculator. All you need is:
Our calculator will automatically calculate the result, and represents it in 3 different forms, as shown in the image below:
In the example above, we have explained to you to calculate the Sales Tax amount payable in a product, and the Gross Price of the Product.
But there are also instances when you are required to deduce how much sales tax buyer has actually paid on a product or you may want to check the accuracy of the sales tax indicated on your item's receipt.
This is where the Reverse Sales Tax Calculation Kicks in. And luckily, our New Jersey Sales Tax Calculator can perform this calculation like a Pro.
Your buyer has paid $75 for a Wireless Keyboard at your store in Glendora, New Jersey. Now the buyer is inquiring how much the Wireless Keyboard actually cost before the sales tax was added. So you need to follow the steps below to determine the amount before tax (net price) of a Wireless Keyboard:
Gross Price (Amount after Tax) of Wireless Keyboard: $75
Total Sales Tax rate: 0.00% (Glendora) + 0.00% (Camden County) + 6.625% (New Jersey State) = 6.625%.
Gross Price with sales tax = [Net Price × (tax rate in decimal form + 1)]
20 = [Net Price x ((6.625/100) + 1)]
20 = Net Price x 1.07
$18.7 = Net Price
So the original Price (net price) of the Wireless Keyboard was $69.4.
Using our Sales Tax Calculator:
You can also use our Sales Tax Calculator for Reverse Sales Tax calculation to skip the aforementioned manual method. All you need is:
Our calculator will automatically calculate the result and represents it in 3 different forms.
Answer: The current general sales tax rate collected by New Jersey on the state level is 6.625%. Fortunately, no county, city, or municipalities are allowed to collect local sales tax.
Answer: Over-the-counter drugs, prescription, Groceries (except when sold in or by restaurants or similar establishments), Gasoline, household paper products, and most types of clothing and footwear are exempted from New Jersey Sales Tax.
Answer: most types of clothing are exempted from Sales tax in Nj except for fur clothing.
Answer: Prepared food sold in or by restaurants or similar establishments are taxed in New Jersey.