TRENTON, NJ – A new proposal in the New Jersey General Assembly aims to roll back the state’s sales and use tax from 6.625 percent to 6 percent, restoring it to its pre-2016 level.
Assembly Bill 6006, introduced by Assemblyman Christopher P. DePhillips, would reduce the rate applied to most retail sales, services, and taxable transactions statewide.
The measure is part of a broader effort by some legislators to ease the tax burden on residents and businesses amid rising living costs.
Key Points
- Bill A6006 would lower the state sales and use tax from 6.625% to 6%.
- The rate had been increased in 2016 as part of a transportation funding agreement.
- Lawmakers say the rollback would provide relief to consumers and stimulate spending.
Background on the sales tax increase
New Jersey’s sales tax was raised from 6 percent to 6.625 percent in 2016 under a bipartisan deal tied to replenishing the state’s Transportation Trust Fund. The agreement also included a gradual phase-out of the estate tax and a gas tax hike to support infrastructure spending.
Since then, the higher rate has remained in place, generating billions in revenue annually for the state budget. Critics of the increase have argued that it placed additional strain on households already facing some of the highest property taxes in the nation.
Proposed rollback and impact
Under Assemblyman DePhillips’s bill, the sales and use tax rate would return to 6 percent, reducing the amount consumers pay on most goods and services. Supporters contend the change would make New Jersey more competitive with neighboring states and encourage greater consumer spending, particularly in border regions.
Fiscal analysts have previously estimated that each tenth of a percent reduction in the sales tax could cost the state hundreds of millions in annual revenue, though the precise budget impact of this measure would depend on implementation timing and economic conditions.
Legislative outlook
The proposal will be referred to committee for review, where it is expected to spark debate over the balance between tax relief and state revenue needs.
Assemblyman DePhillips, a Republican representing Bergen County’s 40th Legislative District, has long advocated for lowering taxes and curbing government spending.
If enacted, the bill would mark one of the largest across-the-board tax reductions in New Jersey in nearly a decade — a move proponents say would signal fiscal restraint and economic recovery, while opponents may question how the state would offset the lost revenue.