New Jersey
The Facts on New Jersey's Tax Climate
Here are some basic facts on New Jersey's tax system and how it compares to other states:
Tax Freedom Day Arrives on April 29 in New Jersey
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, New Jersey taxpayers work until April 29 to pay their total tax bill, ranking them 2nd highest in the nation. This is 17 days later than national Tax Freedom Day (April 12). The Tax Freedom Days of the neighboring states are: New York, April 24 (ranked 3rd nationally), Pennsylvania, April 14 (ranked 13th nationally), and Delaware, April 10 (ranked 21st nationally).
Full study of Tax Freedom Day, nationwide and in each state
New Jersey's State and Local Tax Burden Highest in Nation
New Jersey's and local tax burden percentage has consistently ranked among the nation's highest, this year being no exception, taking the top stop, currently estimated at 12.2% of income (1st nationally), above the current national average of 9.8%. Compared to the 1977 data, New Jersey had a rate of 12.4% (3rd nationally), decreasing 0.2% overall. Currently residents pay $6,751 per capita in state and local taxes.
New Jersey's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009
New Jersey's 2012 Business Tax Climate Ranks Last
New Jersey ranks last in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states rank as follows: New York (49th), Pennsylvania (19th) and Delaware (12th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index, Ninth Edition (full study)
New Jersey's Individual Income Tax System
New Jersey's personal income tax system consists of six brackets and a top rate of 8.97% kicking in at an income level of $500,000. Among states levying personal income taxes, New Jersey's top rate ranks 6th highest nationally. New Jersey's 2008 state-level individual income tax collections were $1,457 per person, which ranked 6th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
New Jersey's Corporate Income Tax System
New Jersey's corporate tax structure consists of a flat 9% on corporate income. However, corporations with total net income of $100,000 or less pay 7.5% and corporations with total net income of $50,000 or under pay 6.5%. Among states levying corporate income taxes, New Jersey's top tax rate ranks 5th highest nationally. In 2008, state-level corporate tax collections (excluding local taxes) were $326 per capita, ranking the state 5th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2009
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006
New Jersey Sales and Excise Taxes
New Jersey levies a 7% general sales or use tax on consumers, which is above the national median of 5.85%. In 2007 combined state and local general and selective sales tax collections were $1,424 per person, ranking 22nd highest nationally. New Jersey's gasoline tax stands at 14.5 cents per gallon and ranks 47th highest nationally. New Jersey's cigarette tax stands at $2.70 per pack of twenty, which is the 5th highest cigarette tax in the nation. The sales tax was adopted in 1966, the gasoline tax in 1927 and the cigarette tax in 1948.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates.
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita
New Jersey Property Taxes: Highest Per Capita in the Nation
New Jersey is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. New Jersey's localities collected $2,372.03 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, New Jersey collected $0.40 in property taxes during FY 2006, making its combined state/local property taxes $2,372.43 per capita, New Jersey's combined per capita collections were the highest in the nation.
State property tax collections per capita by state
Federal Tax Burdens and Expenditures: New Jersey is a Donor State
New Jersey taxpayers receive less federal funding per dollar of federal taxes paid than any other state. Per dollar of federal tax paid in 2005, New Jersey citizens received approximately $0.61 in the way of federal spending. This represents a decline from 1995 when New Jersey received $0.68 per dollar of taxes in federal spending (second lowest). Neighboring states and the amount of federal spending they received per dollar of federal taxation paid were as follows: New York ($0.79), Pennsylvania ($1.07), and Delaware ($0.77).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state
Related Blog Entries
- New Jersey Governor Urges Income Tax Reductions, Cites Tax Foundation’s Burdens Report, by Joseph Henchman, January 19, 2012
- New Jersey Governor Vetoes Film Tax Credit Award to "Jersey Shore", by Joseph Henchman, September 29, 2011
- New Analysis on Property Taxes by County, by Richard Morrison, May 17, 2011
- New Jersey Governor Cites Tax Foundation Burdens Study, Calls for Tax Reform, by Joseph Henchman, January 26, 2011
- Film Tax Credits Are a Bad Deal: Massachusetts Edition, by Mark Robyn, January 13, 2011
- New Jersey Senate President Predicts Property Tax Increase Despite Cap, by Alicia Hansen, December 15, 2010
- New Jersey Policy Perspective and Star-Ledger Forgot that Marginal Tax Rates Matter, by Mark Robyn, December 3, 2010
- Chris Christie Cites Tax Foundation on "Meet the Press", by Richard Morrison, November 8, 2010
- New Jersey Charged with Fraud by SEC, by Mark Robyn, August 20, 2010
- New Jersey Approves Property Tax Cap, by Joseph Henchman, July 16, 2010
- New Jersey Millionaire's Tax, by Justin Higginbottom, June 21, 2010
- Film Tax Credits Losing Their Appeal, by William Ahern, June 11, 2010
- Oklahoma Cuts Tax Expenditures, by Justin Higginbottom, June 10, 2010
- New Podcast: Josh Barro of the Manhattan Institute on NJ Property Tax Reform, by Natasha Altamirano, June 2, 2010
- Christie Thinks Tax Increases Unneeded, by Justin Higginbottom, May 26, 2010
- Governors Oppose Millionaire's Tax Proposals in Minnesota and New Jersey, by Rob Shrum, May 14, 2010
- Star-Ledger Letter to the Editor, by Mark Robyn, April 21, 2010
- New Jersey Considers Property Tax Constraining Measure, by Justin Higginbottom, March 30, 2010
- New Jersey is in Fact a High Tax State, by Justin Higginbottom, March 12, 2010
- Rich Take Charity Money with Them Leaving NJ, by Justin Higginbottom, February 17, 2010
- Tax Foundation President Scott Hodge on Fox News Discussing High State Taxes and Out-Migration, by TF Staff, February 6, 2010
- Pet Care Deduction: Government Micromanagement, Tax Code Complexity, and Bad Incentives, by Joseph Henchman, December 15, 2009
- New Podcast: NJ Senate Republican Leader Tom Kean, by Natasha Altamirano, October 21, 2009
- New York Times: New York Ready for Prop 13-Style Property Tax Revolt?, by Joseph Henchman, October 5, 2009
- "Fighting New Jersey's Tax Crush", by Natasha Altamirano, September 28, 2009
- More Updated State Tax Rate Tables: Sales, Excise, and Corporate Income Taxes, by Mark Robyn, July 16, 2009
- Some States Approve Last Minute Budgets, by Joseph Henchman, July 1, 2009
- New Jersey New Budget Relies On Several Tax Increases, by Mark Robyn, June 26, 2009
- New Jersey Primary Voting Today, by Joseph Henchman, June 2, 2009
- New Podcast: Joseph Henchman of the Tax Foundation - Corzine, Christie and Lonegan Tax Proposals, by Matt Moon, May 27, 2009
- Hawaii's New Top Rate of 11% on Income Over $200,000 is Highest State Rate in U.S., by TF Staff, May 12, 2009
- We Will Continue to Criticize Ideas That Don't Follow Principles of Sound Tax Policy, No Matter Who Proposes Them, Republican or Democrat, by Matt Moon, April 29, 2009
- Did People Flee New Jersey After 2004 Income Tax Hike?, by Gerald Prante, April 14, 2009
- Paterson / Silver Budget Will Make New York’s Taxes Worst in Country, by Josh Barro, March 31, 2009
- ALEC Releases 2009 Rich States, Poor States, by Tonya Barr, March 18, 2009
- Tax Foundation Research Plastered in Editorial Sections This Week, by Matt Moon, March 12, 2009
- Will the Last Investment Banker Left in Manhattan Please Turn Out the Lights?, by Josh Barro, February 11, 2009
- Troubled Hoboken Faces 47 Percent Property Tax Hike, by Joseph Henchman, January 16, 2009
- Tracking State Budget News on Twitter, and the Best of the Blogosphere, by Matt Moon, January 13, 2009
- BusinessWeek Features State Business Tax Climate Index; State-Local Tax Reports in Editorial Pages This Week, by Matt Moon, December 31, 2008
- WSJ Columnist Cites Our State & Local Tax Studies, Urges Obama Not to Repeat New Jersey's Mistakes, by Matt Moon, December 30, 2008
- Tax Foundation's Website Among the "Online Tax Canon" ... and the Best of the Blogosphere, by Matt Moon, December 29, 2008
- State Budgets: New Jersey Governor Cuts Some Spending But Hints Tax Increases are Likely, by Joseph Henchman, December 28, 2008
- Appropriation by Litigation Update, by Joseph Henchman, December 18, 2008
- New Jersey Takes One Step to Improve Its Business Tax Climate, by Josh Barro, November 25, 2008
- Giving Thanks: Best of the Blogosphere from the Garden State, the Sunshine State and the Keystone State, by Matt Moon, November 25, 2008
- Tax Foundation in College Newspapers, and the Best of the Blogosphere, by Matt Moon, November 17, 2008
- New Podcast on New Jersey's Business Tax Climate, by TF Staff, November 4, 2008
- Even Proposing a Sales Tax Holiday Creates Tax Instability, by Josh Barro, October 21, 2008
- New Jersey Republicans Propose Sales Tax Holiday, by Josh Barro, October 14, 2008
- Tax Foundation in the Editorial Pages: Nonpayers, Corporate Taxes, and the Index, by Matt Moon, October 13, 2008
- Best of the Blogosphere: 2009 State Business Tax Climate Index, by Matt Moon, October 10, 2008
- Time to Rehab New Jersey's Tax Climate, by Josh Barro, October 7, 2008
- More on States Exporting Tax Burden to Out-of-State Businesses, by Joseph Henchman, March 25, 2008
- BATSA Hearing: Shaken Down by New Jersey on the State Line, by Joseph Henchman, February 21, 2008
- New Jersey Governor Corzine Rightly Vetoes Tax Preferences for Media Companies, by Gerald Prante, November 12, 2007
- New York City Metro Area Hit Hardest by AMT, by Gerald Prante, September 25, 2007
- New Education Finance Data Reveal New Jersey Spends Most Per Student, by Gerald Prante, August 2, 2007
- Federal Government Becoming a Greater Funding Source for Local Schools, by Gerald Prante, August 1, 2007
- New Jersey and New York Receive More in Tolls than Gas Tax Receipts, by Gerald Prante, June 19, 2007
- Tax Foundation State Tax Team Travels to New Jersey, by Curtis S. Dubay, September 13, 2006
- Corzine Denies He's a Supply-Sider, But..., by William Ahern, August 4, 2006
- Senator Seeks to Export New Jersey's High Property Tax Burden, by Gerald Prante, August 1, 2006
- New Jersey Further Weakens Business Tax Climate, by Curtis S. Dubay, July 10, 2006
- New Jersey's Tax Quagmire Continues, by Andrew Chamberlain, July 6, 2006
- Miss America Blames Lack of Government Handout for Leaving Atlantic City, by Gerald Prante, August 26, 2005
