Does New Jersey Have Sales Tax on Clothes? The Definitive Guide

Yes, but with a delightful twist! New Jersey generally exempts most clothing and footwear from sales tax. This makes the Garden State a happy hunting ground for shoppers looking to refresh their wardrobes without the added sting of sales tax on most items. Let’s delve into the specifics and unveil the nuances of this consumer-friendly policy.

New Jersey’s Clothing Sales Tax Exemption: The Core Principles

The state of New Jersey has a long-standing history of understanding that clothing is a necessity, not a luxury. This understanding is reflected in its sales tax exemption on most articles of clothing and footwear. This policy aims to ease the financial burden on families and individuals, particularly those on a tight budget, and boost the local retail economy by attracting shoppers from neighboring states. However, the devil is always in the details, and understanding the scope and limitations of this exemption is crucial.

What Qualifies as “Clothing” Under New Jersey Law?

The term “clothing” is broadly defined, but essentially encompasses items worn on the human body as coverings. This includes a wide range of apparel, from everyday wear like shirts, pants, dresses, and coats, to more specialized items like work uniforms and athletic wear. Footwear, including shoes, boots, and sandals, also falls under this exemption. Accessories are generally subject to sales tax.

Exceptions to the Rule: When Clothing Is Taxed in New Jersey

While the vast majority of clothing and footwear is exempt, certain categories remain subject to New Jersey’s sales tax. These exceptions usually involve items that are not considered essential or that are used for purposes beyond basic apparel.

• Fur Clothing: Clothing made entirely of fur or where fur represents more than three times the value of the next most valuable material is taxable. Think luxurious fur coats.
• Accessories: Accessories, such as jewelry, handbags, wallets, umbrellas, and briefcases, are generally not exempt from sales tax. These items are viewed as supplementary to clothing, rather than essential coverings.
• Protective Equipment: Some types of protective equipment may be taxable, particularly if they are not considered everyday apparel. For example, certain types of safety gear worn in industrial settings might be subject to sales tax.
• Custom-Made Clothing: While the clothing itself might be exempt, charges for alterations or tailoring are taxable, as they represent a service rather than the sale of tangible personal property.

Shopping Strategies to Maximize Your Savings in New Jersey

Understanding the rules is only half the battle. Savvy shoppers can utilize this information to optimize their purchasing decisions and maximize their savings.

• Plan Your Trips: If you live near New Jersey’s borders, consider making dedicated shopping trips to the state for clothing and footwear. This can result in significant savings, especially during back-to-school season or when purchasing larger quantities of apparel.
• Prioritize Exempt Items: Focus your spending on items that are clearly exempt from sales tax. If you’re considering purchasing a mix of clothing and accessories, separate the transactions to make it easier to identify which items are taxable and which are not.
• Check Store Policies: Some stores may have specific policies regarding sales tax exemptions, particularly for online purchases. Always review the store’s terms and conditions before making a purchase to ensure that you are receiving the correct tax treatment.
• Keep Your Receipts: Always keep your receipts for your purchases. These receipts serve as your proof of purchase and can be useful if you need to return an item or contest a sales tax charge.

Common Misconceptions About New Jersey’s Clothing Sales Tax

It’s easy to fall prey to common misunderstandings about New Jersey’s sales tax laws. Let’s clear up some confusion.

• Myth: All clothing is tax-free.
  • Fact: As noted above, specific exceptions exist, such as fur clothing and certain accessories.
• Myth: Online clothing purchases shipped to New Jersey are always tax-free.
  • Fact: The taxability of online purchases depends on the retailer’s nexus (physical presence) in New Jersey and the type of item being purchased.
• Myth: Children’s clothing is taxed differently than adult clothing.
  • Fact: The sales tax exemption applies equally to clothing for both children and adults, as long as the item meets the general definition of clothing.

FAQs: New Jersey Clothing Sales Tax – Your Questions Answered

Here are the most frequently asked questions about New Jersey’s clothing sales tax, providing clarity and guidance for shoppers.

1. Does the exemption apply to all types of shoes?

Yes, generally. All types of footwear, including sneakers, boots, sandals, and dress shoes, are exempt from sales tax in New Jersey. This applies to both children’s and adult shoes.

2. Are school uniforms exempt from sales tax?

Yes, school uniforms are considered clothing and are exempt from sales tax in New Jersey, as long as they meet the general definition of clothing.

3. What about alterations or tailoring services? Are those taxable?

Yes, alterations and tailoring services are taxable in New Jersey, even if they are performed on clothing that is otherwise exempt from sales tax. These services are considered a separate transaction from the sale of the clothing itself.

4. If I buy clothing online from a retailer outside of New Jersey, do I have to pay sales tax?

The answer depends on the retailer’s nexus (physical presence) in New Jersey. If the retailer has a physical presence (such as a store or warehouse) in New Jersey, they are required to collect New Jersey sales tax on purchases shipped to the state. If the retailer does not have a physical presence in New Jersey, you may not be charged sales tax at the time of purchase. However, you may be responsible for paying use tax on the purchase when you file your New Jersey income tax return.

5. Are wedding dresses exempt from sales tax?

Yes, wedding dresses fall under the clothing exemption and are not subject to sales tax in New Jersey.

6. What happens if I am wrongly charged sales tax on exempt clothing?

If you are charged sales tax on an item of clothing that you believe is exempt, you should first contact the retailer to request a refund of the sales tax. If the retailer refuses to provide a refund, you can file a claim with the New Jersey Division of Taxation to request a refund of the overpaid sales tax.

7. Are costumes considered clothing and therefore exempt?

Costumes are generally considered clothing and are exempt from sales tax, especially if designed to be worn as regular apparel. However, elaborate costumes with accessories that are considered decorative might have their components taxed separately.

8. Are athletic uniforms or sports jerseys exempt from sales tax?

Yes, athletic uniforms and sports jerseys are generally considered clothing and are exempt from sales tax in New Jersey.

9. If I buy fabric to make my own clothes, is the fabric taxed?

Fabric sold for the purpose of making clothing is generally exempt from sales tax in New Jersey.

10. Are raincoats and other outerwear exempt?

Yes, raincoats, winter coats, and other outerwear fall under the clothing exemption and are not subject to sales tax in New Jersey.

11. Does the exemption apply to clothing sold at consignment shops or thrift stores?

Yes, the clothing exemption applies to clothing sold at consignment shops and thrift stores, as long as the items meet the general definition of clothing.

12. How do I stay updated on changes to New Jersey’s sales tax laws?

The best way to stay updated on changes to New Jersey’s sales tax laws is to subscribe to the New Jersey Division of Taxation’s email list or regularly visit their website. You can also consult with a qualified tax professional for personalized advice.