Sales Tax Reductions in New Jersey

By Brian Greer on Wed, Feb 28, 2018 @ 03:05 PM

Topics: sales tax news

In New Jersey, 2018 began with good news for consumers.  The state sales tax decreased again, from 6.875% to 6.625%.  This was the second phase of a planned decrease to the sales tax.  In 2017, New Jersey implemented the first decrease from 7% to 6.875%.  This decrease occurred as part of a deal made at the end of 2016.  Lawmakers agreed to a sale tax decrease because there was a gasoline price hike of 23 cents adopted at the same time.  To compensate for the rise in gas prices, lawmakers implemented a plan to lower the sales tax rate over two years.  The increase gas price was significant because it provided more funding for road repair and other transportation department infrastructure needs.

There was also a drop in the sales tax rate charged on goods purchased in Urban Enterprise Zones.  Urban Enterprise Zones are areas identified as economically challenged and distressed.  The zones were created in an attempt to support businesses and encourage economic growth in these areas.  Currently New Jersey has 27 Urban Enterprise Zones in 32 cities across the state.  In these zones businesses receive special tax credits, discounts and exemptions in an effort to stimulate growth.  Businesses receive this status for three years and then must reapply for certification.  Additional program information and requirements can be reviewed here.  In 2018 the sales tax within Urban Enterprise Zones was also lowered  from 3.4375% to 3.3125%.

Brian Greer

Written by Brian Greer