The sales tax rate in Mercer County, New Jersey, is 6.625 percent. That figure comes entirely from the state. New Jersey does not let counties or municipalities add their own local sales tax, so the rate you pay in Trenton, Princeton, Hamilton, Lawrence, or any other Mercer County community is the same.1Justia. New Jersey Code 54:32B-3 – Taxes Imposed The one meaningful exception is a half-rate charged by certain qualified retailers inside Trenton’s Urban Enterprise Zone.
Why the Rate Is the Same in Every Mercer County Town
New Jersey’s Sales and Use Tax Act sets a single statewide rate instead of letting each county or city pick its own. The current 6.625 percent took effect January 1, 2018, when it dropped from 6.875 percent as part of a phased reduction.1Justia. New Jersey Code 54:32B-3 – Taxes Imposed For shoppers in Mercer County, that means no comparison shopping between municipalities to chase a lower tax. The number is fixed by the legislature, and only the legislature can move it.
The Trenton Urban Enterprise Zone Half-Rate
Trenton is designated as an Urban Enterprise Zone. Qualified retailers inside the zone can charge sales tax at 3.3125 percent, exactly half the standard rate, on certain in-person purchases.2New Jersey Division of Taxation. Urban Enterprise Zone A few conditions matter:
- The seller must be a UEZ-certified business. Not every store in the zone has qualified.
- You have to buy at the store’s physical location inside the zone.
- Online orders shipped into the zone still carry the full 6.625 percent.
If you shop regularly in Trenton, it is worth asking whether a store participates before you assume the discount applies.
What You Pay Sales Tax On
New Jersey applies the 6.625 percent tax to most tangible personal property, specified digital products, and certain services.3New Jersey Division of Taxation. Sales and Use Tax The exemption list, though, is unusually broad compared with many other states, and it covers a lot of ordinary household spending.
Clothing, Groceries, and Medicine Are Exempt
All articles of clothing and footwear for human use are exempt, from winter coats to baby diapers. The exemption does not reach fur clothing, clothing accessories or equipment, sport or recreational equipment, or protective equipment.4New Jersey Legislature. New Jersey Code 54:32B-8.4 – Clothing, Footwear, Exemption From Tax Running shoes you wear casually are exempt; a football helmet is not.
Other common exemptions include:5New Jersey Division of Taxation. New Jersey Sales Tax Guide
- Most food and food ingredients sold at supermarkets, bakeries, and produce markets for home preparation.
- Prescription and over-the-counter drugs, including anything labeled with a Drug Facts panel, and medical cannabis.
- Diabetic supplies, prosthetic devices, durable medical equipment for home use, and mobility-enhancing equipment sold with a prescription.
- Disposable towels, napkins, toilet tissue, paper plates, and paper cups bought for household use.
- All newspaper sales, and magazines sold by subscription.
Services: Which Ones Are Taxed
Professional advice from lawyers, doctors, and accountants is generally not subject to New Jersey sales tax. Hands-on work on physical property is. Installing, maintaining, servicing, or repairing tangible personal property is taxable, so paying someone to fix your dishwasher, tune up your car, or install a home security system triggers the 6.625 percent charge.1Justia. New Jersey Code 54:32B-3 – Taxes Imposed Laundering, dry cleaning, tailoring, and shoe repair are specifically carved out and are not taxed.
Digital Products
New Jersey taxes “specified digital products,” a narrower category than many people assume. It covers digital audio-visual works like movies and TV episodes, digital audio works like music, podcasts, and ringtones, and digital books, but only when they are delivered electronically to the buyer. Streaming without a download is exempt. Digital photographs, individual digital magazines, and similar items that do not fit those three defined categories may not qualify as specified digital products, though some can still be taxable under separate rules on information services.6New Jersey Division of Taxation. Specified Digital Products and New Jersey Sales Tax
Groceries vs. Prepared Food at the Register
The line between tax-free groceries and taxable prepared food is where most confusion happens. New Jersey taxes prepared food, which means food sold heated, food where the seller combined two or more ingredients, or food sold with eating utensils the seller provides.7New Jersey Division of Taxation. Sales of Prepared Food by Food Service Providers
“Heated” means above the air temperature of the room where it is sold. A rotisserie chicken from the deli counter is taxable. A frozen chicken you reheat at home is not. If you take food from a refrigerated case and warm it yourself in a store microwave, that does not count as sold in a heated state.
The utensils question is less obvious. Whether plates, forks, and napkins count as provided by the seller depends on what share of the store’s food sales are prepared food. Stores where prepared food makes up more than 75 percent of total food revenue are treated as providing utensils just by making them available anywhere in the store. Stores at or below that threshold only trigger the rule when they physically hand utensils to the customer.7New Jersey Division of Taxation. Sales of Prepared Food by Food Service Providers A sandwich shop with napkin dispensers on the counter is treated differently than a supermarket deli.
Bakery items like bread, rolls, cookies, and cakes are only taxable when the seller provides utensils. Bulk items containing four or more servings sold at a single price are also excluded from the prepared food definition.
What You Owe on Online and Out-of-State Purchases
When you buy something from an out-of-state retailer that does not collect New Jersey sales tax, whether online, by catalog, or while traveling, you still owe New Jersey use tax at the same 6.625 percent rate. The use tax exists so that out-of-state purchases do not undercut in-state retailers who do collect.
Individuals can report use tax on the New Jersey resident income tax return, Form NJ-1040. If you do not know the exact amount you spent, the Division of Taxation publishes an Estimated Use Tax Chart based on income level. If you do not file a New Jersey income tax return, or you want to pay sooner, you can remit directly on Form ST-18.8New Jersey Division of Taxation. Use Tax FAQ
Most people run into this with bigger purchases: furniture bought on vacation, equipment from a vendor in a state without sales tax, or orders from smaller online sellers that lack a New Jersey presence. The obligation is easy to overlook, but it is legally enforceable.
Large online marketplaces generally handle the tax for you. New Jersey law requires marketplace facilitators like Amazon, eBay, and Etsy to collect and remit the tax on sales they facilitate to New Jersey buyers, regardless of the individual seller’s registration status.9Justia. New Jersey Code 54:32B-3.6 – Sales and Use Tax, Marketplace Facilitators If the platform collected tax at checkout, you do not owe use tax on top of it.
If You Sell in Mercer County
Any business making taxable sales in New Jersey has to register before the first sale by filing a Business Registration Application, Form NJ-REG, with the Division of Revenue and Enterprise Services. That includes traditional retailers, occasional sellers at flea markets and craft shows, and nonprofits that make taxable sales.10New Jersey Division of Taxation. Starting a Business in NJ Out-of-state sellers must register as well once they pass either $100,000 in gross revenue from sales delivered into New Jersey or 200 separate transactions into the state, in the current or prior calendar year.11New Jersey Division of Taxation. Remote Sellers Collection, filing frequency, resale and nonprofit exemption certificates, and the penalty schedule for late returns are all handled through the Division of Taxation after registration.