In the hustle and bustle of everyday life in the Garden State, sometimes the little things get overlooked. Among the personal stuff we take for granted, a difference as small as a ¼ of a percent might not seem like much, but it adds up. For those not aware, the sales tax in New Jersey, starting January 1st of this year, is 6.625%. For authorized reduced rate collectors in Urban Enterprise Zones (EUZs), the rate is now 3.3125% (link).
The drop in the sales tax started in 2017 when it went down to 6.875%. It was the first change in New Jersey’s sales tax since it went up to 7% on July 15, 2006, from 6%.
On its website (link), the New Jersey Division of Taxation gives instruction on how to calculate the tax for applicable transactions, stating that sellers have the option of calculating sales tax due using either the tax bracket (Form ST-75) or by multiplying the taxable receipts by the applicable tax rate. If the tax bracket is not used, the seller must:
- Calculate the tax to the third decimal point.
- Round up to the next cent, if one-half cent ($0.005) or higher.
- Round down, if less than $0.005.
According to the Tax Foundation (link), New Jersey has the fourth highest sales tax – and the highest property tax – in the nation.