NJ’s Sales Tax Holiday — What is Included and What is Not

As New Jersey parents begin to turn their attention to back to school time, Gov. Phil Murphy and Democrats in the legislature are again touting a tax holiday on school supplies.

The tax holiday was first introduced as part of the state budget in 2022.

For ten days beginning August 26, a wide variety of school supplies and equipment will be exempt from New Jersey's 6.625% sales tax.

Republicans in the legislature call it a gimmick that will do little to curb costs for New Jersey taxpayers.

Still, Many of you have been asking questions about the tax holiday.

Here is what you need to know.

When is New Jersey's Sales Tax Holiday?

For 2023, the sales tax holiday runs for 10-days beginning August 26 and ending September 4.

Who is eligible for New Jersey's Sales Tax Holiday?

Anyone can make a purchase and take advantage of the discount as long as the items are for non-business use. You do not have to prove they are for school use.

How much will I save?

That depends. The state sales tax rate of 6.625 is waived during the 10-day holiday. If you are buying more expensive items like computers and sports equipment, your savings will be more.

Clothing and shoes are already exempt from state sales tax.

What is included in New Jersey's Sales Tax Holiday?

◼ Computers, with a sales price of less than $3,000
◼ School art supplies
◼ School computer supplies, with a sales price of less than $1,000
◼ School instructional materials
◼ School supplies
◼ Sport or recreational equipment sold to individual purchasers for non-business use

Is there a full list of items included in the Sales Tax Holiday?

Yes. An itemized list of eligible items is included at the end of this article.

Is there a limit on how many eligible items an individual customer can purchase?

No. There is no limit on how many eligible items an individual customer may purchase during the Sales Tax Holiday.

How are coupons and discounts handled during the Sales Tax Holiday?

According to the New Jersey Department of Taxation: Sellers may offer store discounts and/or coupons to reduce the sales price of computers with a sales price of $3,000 or greater, and computer supplies with a sales price of $1,000 or greater, in order for the items to be eligible for the Sales Tax Holiday.

However, any reduction in the price of these items as a result of manufacturer's coupons and rebates will not qualify an item to be eligible for the exemption.

How are rain checks handled during the Sales Tax Holiday?

The New Jersey Department of Taxation advises: Items purchased during the Sales Tax Holiday using a rain check are eligible for the exemption only if the rain check is redeemed during the exemption period.

If it is redeemed after the Sales Tax Holiday, the purchase is taxable.

How are exchanges or returns handled during the Sales Tax Holiday?

If a customer buys an eligible item during the Sales Tax Holiday and later exchanges it for the same item in a different size or color, the New Jersey Department of Taxation says the seller should not charge Sales Tax even if the exchange is made after the exemption period.

Taxation officials also advise of a couple other scenarios:

If a customer buys an eligible item during the Sales Tax Holiday and returns the item after the exemption period for credit on the purchase of a different item, the seller must charge Sales Tax on the sale of the newly purchased item, even if it would have been eligible for the exemption during the Sales Tax Holiday.

If a customer buys an item before the Sales Tax Holiday, but returns the item during the exemption period and receives credit on the purchase of a different eligible item, no Sales Tax is due on the sale of the new item. The seller should credit the customer for the Sales Tax paid on the item being returned.

What types of computers are eligible for the Sales Tax Holiday?

Computers purchased for less than $3,000 are eligible, as long as they are for personal use.

If I purchase a computer during the Sales Tax Holiday that exceeds the price threshold, will it be exempt on the first $3,000 of that purchase?

No.

The New Jersey Department of Taxation states:

If a customer purchases a computer during the Sales Tax Holiday that exceeds the price threshold, then the computer does not qualify for the exemption and the Sales Tax will be charged on the entire sales price.

What if I was charged sales tax on an exempt item during the Sales Tax Holiday, can I request a refund?

Yes.

If New Jersey Sales Tax was incorrectly charged and collected by the seller, the customer can request a refund of the Sales Tax paid directly from the seller.
Here is a full list of items included in New Jersey's Sales Tax Holiday
(Provided by the New Jersey Department of Taxation)
Retail sales of the following are exempt during the Sales Tax Holiday:

Certain Computers

◼ Computers with a sale price less than $3,000.

"Computers" means electronic devices that accept information in digital or similar form and manipulate it for a result based on a sequence of instructions. "Electronic" means related to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

Computers with a sale price greater than or equal to $3,000 remain subject to tax during the Sales Tax Holiday.

School Art Supplies

"School art supplies" means items commonly used by a student in a course of study for artwork. School art supplies include the following:

◼ Clay and Glazes
◼ Paints (Including Acrylic, Tempera, and Oil)
◼ Paintbrushes for Artwork
◼ Watercolors
◼ Sketch and Drawing Pads

School Computer Supplies

"School computer supplies" with a sales price less than $1,000. "School computer supplies" means items commonly used by a student in a course of study in which a computer is used. Retail sales of school computer supplies with a sales price greater than or equal to $1,000 remain subject to tax during the Sales Tax Holiday. School computer supplies include the following:

◼ Computer Storage Media, Diskettes, and Compact Disks
◼ Handheld Electronic Schedulers (except devices that are cellular phones)
◼ Personal Digital Assistants (except devices that are cellular phones)
◼ Computer Printers
◼ Printer Supplies for Computers, Printer Paper, and Printer Ink

School Instructional Materials

"School instructional materials" means written materials commonly used by a student in a course of study as a reference to learn the subject being taught. School instructional materials include the following:

◼ Reference Books
◼ Workbooks
◼ Reference Maps and Globes
◼ Textbooks

School Supplies

"School supplies" means items commonly used by a student in a course of study. School supplies include the following:

◼ Binders
◼ Cellophane Tape
◼ Composition Books
◼ Folders (expandable, pocket, plastic, and manila)
◼ Index Cards
◼ Pencil Boxes and Other School Supply Boxes
◼ Pens
◼ Protractors
◼ Book Bags
◼ Blackboard Chalk
◼ Crayons
◼ Glue, Paste, and Paste Sticks
◼ Index Card Boxes
◼ Markers
◼ Lunch Boxes
◼ Legal Pads
◼ Notebooks
◼ Pencil Sharpeners
◼ Pencils
◼ Calculators
◼ Compasses
◼ Erasers
◼ Highlighters
◼ Paper (loose leaf ruled notebook, copy, graph, tracing, manila, colored, construction, and poster board)
◼ Writing Tablets
◼ Rulers
◼ Scissors

Sport or Recreational Equipment

"Sport or recreational equipment" means items designed for human use and worn in conjunction with an athletic or recreational activity that are not suitable for general use. Sport or recreational equipment include, but is not limited to, the following:

◼ Ballet and Tap Shoes
◼ Goggles
◼ Mouth Guards
◼ Skates (roller and ice)
◼ Shin Guards
◼ Shoulder Pads
◼ Ski Boots
◼ Athletic Shoes (cleated or spiked)
◼ Guards (hand or elbow)
◼ Life Preservers and Vests
◼ Waders
◼ Gloves , (baseball, bowling, boxing, hockey, and golf)
◼ Wetsuits and Fins
◼ Helmets (bike, sport)