New Jersey sales tax changes
Tracking state and local sales tax rate and rule changes in New Jersey
Avalara TaxRates > New Jersey Sales Tax Overview > New Jersey Tax Rate Changes
New Jersey sales tax changes effective January 2018
As part of an ongoing plan to offset 2016 and 2017 fuel tax rate increases, New Jersey will decrease the state sales and use tax rate from 6.875 percent to 6.625 percent as of Jan. 1, 2018.
The new rate applies to all taxable sales made on or after the first, as well as to tangible personal property and specified digital products sold on or before Dec. 31, 2017, but delivered on or after Jan. 1 — one of those quirks that complicates sales and use tax compliance.
The New Jersey Division of Taxation reminds businesses to make all necessary changes to their point of sale systems by January 1 “to make sure they’re charging the correct amount of New Jersey sales tax." It adds that the rate change does not affect the taxability of any products or services. “What was taxable before is still taxable, just at the new, lower rate."
Sales tax guide for New Jersey businesses
Our free, online guide covers all aspects of managing New Jersey sales tax compliance. Topics include:
- Business registration
- Collecting sales tax
- Filing sales tax returns
- State nexus obligations
- And more!
The New Year will bring a new state sales and use tax rate to New Jersey. Beginning January 1, 2017, the New Jersey sales and use tax will decrease from 7% to 6.875%. The rate will drop further (to 6.625%) on January 1, 2018.
The 6.875% rate applies to services rendered, and tangible personal property or specified digital products sold ordelivered, between January 1, 2017 and December 31, 2017. For example, if a product is sold on December 31, 2016 but delivered on January 2, 2017, the 6.875% applies. Additional information, including a sales tax collection schedule, is available from the New Jersey Division of Taxation.
Sales tax drops, fuel tax increases
The sales tax rate is decreasing to help offset a gas tax rate increase, which is funding transportation improvements. Although New Jersey last increased the gas tax in 1988, drivers in The Garden State were loath to pay more taxes at the pump.
The tax on diesel fuel tax on gross receipts remained unchanged on November 1; however, like sales tax, a 12.85% diesel fuel tax rate change will occur in stages. The diesel tax rate jumps to 8.995% of gross receipts for the period January 1, 2017 through June 30, 2017. On July 1, 2017, the 12.85% rate takes effect. Additional information.
The New Jersey Division of Taxation has announced a local occupancy tax rate increase.
Effective March 1, 2016, the Township of Montclair, in Essex County, New Jersey, imposed a 3% municipal occupancy tax.
