Trenton, NJ – A newly introduced bill in the New Jersey Assembly would roll back the state’s sales and use tax rate from 6.625 percent to 6 percent beginning January 1, 2026.
Assembly Bill 6006, sponsored by Assemblymen Christopher P. DePhillips and Al Barlas of District 40 and Assemblywoman Dawn Fantasia of District 24, proposes the first statewide sales tax reduction in nearly a decade.
The legislation would amend several sections of New Jersey’s tax code to implement the lower rate and adjust related municipal and hotel occupancy tax formulas accordingly.
Lowering the state’s sales and use tax
Under current law, New Jersey’s general sales tax rate of 6.625 percent has been in effect since 2018, following a phased reduction from 7 percent as part of the 2016 Transportation Trust Fund agreement. The proposed bill would extend that reduction further, lowering the statewide rate to an even 6 percent beginning with the 2026 calendar year.
The change would apply to most taxable retail sales, services, and digital products, as well as to the state’s companion use tax. The bill includes detailed transition provisions to ensure proper tax calculation for transactions that span the rate change date.
Adjustments to related taxes
The measure also modifies rate limits for municipal sales taxes and the state’s hotel and motel occupancy fee to maintain consistent combined tax ceilings after the statewide rate reduction. Those combined caps would decrease from 13.625 percent to 13 percent starting in 2026.
The adjustment would prevent local and state levies from exceeding statutory maximums when assessed together, ensuring compliance and simplifying administration for businesses and municipalities.
Part of a broader push for tax relief
DePhillips and Barlas have described the sales tax cut as part of a larger effort to make New Jersey more affordable for residents and competitive for retailers. The move follows other Republican-led proposals to roll back corporate and income taxes enacted in recent years.
Opponents may raise concerns about the potential impact on state revenues, which fund public transportation, education, and property tax relief programs. Supporters counter that the rate cut would stimulate consumer spending and help small businesses statewide.
Immediate enactment, delayed implementation
If passed, the bill would take effect immediately, but the new 6 percent rate would begin applying to taxable sales and use transactions on January 1, 2026.
Key Points
- Bill reduces New Jersey’s sales and use tax rate from 6.625% to 6% effective January 1, 2026.
- Adjusts municipal and hotel occupancy tax formulas to align with the lower rate.
- Sponsors say the move aims to boost affordability and economic competitiveness.
