How does New Jersey’s tax code compare? New Jersey has a graduated state individual income tax, with rates ranging from 1.4 percent to 10.75 percent. There is also a jurisdiction that collects local income taxes. New Jersey has a graduated corporate income tax, with rates ranging from 6.5 percent to 11.5 percent. New Jersey also has a 6.625 percent state sales tax rate and an average combined state and local sales tax rate of 6.60 percent. New Jersey has a 1.77 percent effective property tax rate on owner-occupied housing value.
New Jersey has an inheritance tax. New Jersey has a 44.95 cents per gallon gas tax rate and a $2.70 cigarette excise tax rate (per pack of 20 cigarettes). The State of New Jersey collects $9,366 in state and local tax collections per capita. New Jersey has $9,398 in state and local debt per capita and a 57 percent funded ratio of public pension plans. New Jersey’s tax system ranks 49th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and New Jersey is no exception. The first step toward understanding New Jersey’s tax code is knowing the basics. How does New Jersey collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2025: How Does Your State Compare?
Subscribe to get insights from our trusted experts delivered straight to your inbox.
Subscribe
Get facts about taxes in your state and around the US
The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
24 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
5 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
12 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min readIndividual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
State lawmakers around the country have begun their legislative sessions, and many are considering tax reform. This piece highlights some of the areas on which they are likely to focus.
4 min read
Lawmakers in many states continue to pursue additional income tax relief, while their counterparts elsewhere pursue the opposite goal.
3 min read
One area of the tax code in which extreme complexity and low compliance go hand-in-hand—and where reform is desperately needed—is in states’ nonresident individual income tax filing and withholding laws.
9 min read
While the CEA’s analysis of the benefits of reduced reliance on income taxes is sound, its revenue replacement estimates are not. The actual revenue replacement rate could be as high as 17.51 percent.
6 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
5 min read
Data centers face high tax burdens and are particularly substantial contributors to local coffers, but poor tax structure can drive these operations to other locations and deprive local governments of a major revenue stream.
22 min read
Forty-three states will ring in 2026 with notable tax changes. Eight states will see reduced individual income tax rates in the new year while four states will see reduced corporate income tax rates.
30 min read
Many policies, such as minimum wage levels, tax brackets, and means-tested public benefit income thresholds, are denominated in nominal dollars, even though a dollar in one region may go much further than a dollar in another. Lawmakers should keep that reality in mind as they make changes to tax and economic policies.
6 min read