Operating a business in New Jersey requires a solid understanding of the state's tax framework. The base state sales tax rate is 6.625%, with local jurisdictions adding up to 0%. LLC formation costs $125 in 2026.
Economic Nexus in New Jersey
Remote sellers must collect New Jersey sales tax if they exceed $100,000 in annual sales or 200 transactions within the state. This threshold has been in effect since 2018-11-01. Marketplace facilitators like Amazon and Etsy are also required to collect and remit tax on behalf of third-party sellers. The New Jersey Division of Taxation enforces these provisions and provides registration guidance at https://www.nj.gov/treasury/taxation.
LLC Formation in New Jersey (2026)
Forming an LLC in New Jersey costs $125 for the initial filing. There is no annual franchise tax, keeping ongoing costs low. The annual report fee is $75. New Jersey imposes a state income tax, which affects pass-through LLC taxation.
The process involves filing Articles of Organization with the Secretary of State, obtaining a federal EIN, and registering for applicable state tax accounts. You will also need a sales tax permit from the New Jersey Division of Taxation.
Key Tax Rules
• New Jersey has a 6.625% state sales tax with no local additions.
• Clothing and shoes are completely exempt from sales tax.
• Urban Enterprise Zones offer reduced 3.3125% rate on certain purchases.
• Economic nexus: $100,000 in sales or 200 transactions.
Sales Tax Exemptions
The following categories are generally exempt from sales tax in New Jersey: groceries, clothing, prescription drugs, medical devices. Businesses should maintain proper documentation for exempt transactions.