The sales tax rate in Cape May, New Jersey starts at the state’s 6.625% and goes up from there depending on what you buy and where you buy it. A meal or hotel room in Wildwood, North Wildwood, or Wildwood Crest carries an extra 2% tourism sales tax, bringing the rate on those purchases to 8.625%. Hotel stays anywhere in the county pick up additional occupancy fees that can push the all-in lodging rate as high as 13.625%.
The 6.625% State Rate
Every taxable purchase in Cape May County begins with New Jersey’s state sales tax of 6.625%, in effect since January 1, 2018.1Justia. New Jersey Code 54:32B-3 – Taxes Imposed It applies to most tangible goods — electronics, furniture, souvenirs, beach gear — along with certain services and digital products.2Division of Taxation. NJ Division of Taxation – Sales and Use Tax Sellers add it at checkout and send it to the state.
Clothing, footwear, and most groceries are exempt, so you won’t see the charge on those receipts. For everything else, 6.625% is the floor.
The Extra 2% in the Wildwoods
Three Cape May County municipalities impose an additional 2% tourism sales tax: Wildwood, North Wildwood, and Wildwood Crest. The surcharge rides on top of the state rate for tourism-related purchases, making the combined rate 8.625%.3Division of Taxation. Cape May County Tourism Sales Tax
It applies to three categories of spending, assuming the purchase is already subject to state sales tax:
- Meals and drinks sold by restaurants, taverns, and caterers, whether eaten in or taken out. Vending machine sales are excluded.
- Admissions to amusement rides, sporting events, concerts, plays, movies, and cover charges at nightclubs and cabarets.
- Hotel, motel, and boarding house room rentals.
Here is the detail that catches visitors off guard: Cape May City is not part of the tourism district. The 2% applies only in the three Wildwood municipalities.3Division of Taxation. Cape May County Tourism Sales Tax A restaurant meal in Cape May City is taxed at 6.625%. The same meal in Wildwood is taxed at 8.625%.
Hotel and Lodging Rates
Lodging is where the math gets layered. Several fees stack on the base sales tax, and the total depends on which town you’re in.
State Occupancy Fee
New Jersey charges a State Occupancy Fee on every hotel, motel, and transient accommodation rental subject to sales tax. The standard rate is 5%, but in municipalities that already levy their own tourism or luxury taxes on lodging, the state reduces its fee so the combined rate doesn’t exceed 13.625%.4Justia. New Jersey Code 54:32D-1 – State Hotel, Motel, and Transient Accommodation Occupancy Fee In the Wildwoods, the fee drops to 3.15%.5New Jersey Department of the Treasury. Hotel Occupancies and New Jersey Taxes
Municipal Occupancy Tax
Under P.L. 2003, c.114, any New Jersey municipality can impose a local occupancy tax of up to 3% on hotel room charges.6New Jersey Legislature. P.L. 2003, c. 114 Cape May City has adopted it at the full 3%.7City of Cape May. Chapter 457: Taxation – City of Cape May Not every town in the county imposes it, so the charge depends on where you stay.
Tourism Assessment in the Wildwoods
Hotels in Wildwood, North Wildwood, and Wildwood Crest also carry a 1.85% Cape May County Tourism Assessment on room charges, separate from the 2% tourism sales tax.5New Jersey Department of the Treasury. Hotel Occupancies and New Jersey Taxes
What a Wildwoods Hotel Bill Totals
For a hotel room in Wildwood, North Wildwood, or Wildwood Crest, the layers come to:
- NJ sales tax: 6.625%
- Tourism sales tax: 2%
- Tourism assessment: 1.85%
- State Occupancy Fee (reduced): 3.15%
- Total: 13.625%
That total isn’t coincidence. State law caps the combined rate at 13.625%, and the State Occupancy Fee is reduced until the total hits that ceiling.4Justia. New Jersey Code 54:32D-1 – State Hotel, Motel, and Transient Accommodation Occupancy Fee
In Cape May City, you won’t see the tourism sales tax or tourism assessment, but you will see the 6.625% sales tax, a State Occupancy Fee of up to 5%, and the 3% municipal occupancy tax. The same cap logic applies, so the State Occupancy Fee is reduced if the combination would otherwise exceed 13.625%. Either way, lodging bills carry a double-digit tax load, and the charges appear as separate line items on your invoice.
Short-Term Rentals Through Airbnb and VRBO
Vacation rentals booked through platforms face the same tax obligations as traditional hotels. New Jersey law treats these platforms as “transient space marketplaces” and requires them to collect and remit the sales tax, State Occupancy Fee, and any applicable local occupancy taxes or assessments for the property owner.8New Jersey Department of the Treasury. Taxes Imposed on the Rental of Transient Accommodations If payment goes through the platform, the platform handles the tax. Owners who rent directly, outside a platform, are responsible for collecting and remitting the taxes themselves.
What You Won’t Pay Sales Tax On
Several everyday purchases are exempt from the 6.625% state sales tax throughout Cape May County, including in the Wildwoods.
Clothing and Footwear
Most clothing and shoes are completely exempt, with no price cap.9Justia. New Jersey Code 54:32B-8.4 – Clothing, Footwear, Exemption from Tax A swimsuit at a Cape May boutique is tax-free. So are winter boots at an outlet. The exemption does not cover fur clothing, accessories like handbags and jewelry, sport and recreational equipment, or protective equipment like hard hats. A beach cover-up is tax-free; a surfboard is not.
Groceries
Food and food ingredients sold for off-premises consumption are exempt under N.J.S.A. 54:32B-8.2. Stocking a rental kitchen for the week at a Cape May grocery store means no sales tax on most of what’s in your cart. Two exceptions: candy and soft drinks are taxable even at the grocery store, and so is prepared food like deli sandwiches or hot buffet items. In the Wildwoods, prepared food sold by a restaurant also carries the extra 2% tourism tax.3Division of Taxation. Cape May County Tourism Sales Tax
Prescriptions and Medical Items
Prescription medications are exempt. Over-the-counter drugs and medical devices get more complicated treatment that depends on the specific product. Vitamins and dietary supplements sold with a standard nutrition label are generally exempt as food, but products labeled as supplements or drugs may be treated differently. The label is the tell: a “Supplement Facts” panel and a “Nutrition Facts” panel point to different tax treatments.