New Jersey‘s tax system ranks 49th overall on the 2025 State Tax Competitiveness Index. New Jersey levies all major categories of tax, typically at high rates and significant levels of complexity.
In 1976, the Garden State enacted an individual income tax, in part to provide relief from rising property taxes. Now, individual taxpayers are subject to eight individual income tax brackets, a top marginal rate of 10.75 percent, and the highest per capita property tax collections in the nation. Moreover, individual taxpayers are subject to a marriage penalty. New Jersey property taxpayers also pay the third-highest effective rate in the country. The state repealed the estate tax but continues to levy the inheritance tax.
Corporations face a top marginal tax rate of 11.5 percent, taking into account a surtax on large businesses known as the Corporate Transit Fee. Recently, however, New Jersey has largely removed global intangible low-taxed income (GILTI) from its tax base, and tangible personal property is exempt from property taxation. Additionally, the state conforms to the federal limitation of 80 percent net operating loss carryforwards but fails to conform to the unlimited recovery period included in the federal law.
The vaping industry has grown rapidly in recent decades, becoming a well-established product category and a viable alternative to cigarettes for those trying to quit smoking. US states levy a variety of tax structures on vaping products.
The Senate’s version of the OBBB restores the benefit of avoiding the SALT deduction cap with PTETs for all pass-through businesses, while placing new limits on the extent of the workarounds.
In the United States, taxes are the single most expensive ingredient in beer. The tax burden accounts for more of the final price of beer than labor and materials combined—the many different layers of applicable taxes combining to total as much as 40.8 percent of the retail price.