When people shop in New Jersey, one of the most common questions is whether the sales tax is 7%. The answer is no. The latest statewide sales tax rate is 6.625%, not 7%. This rate applies to most retail purchases, covering recreational cannabis, which has its own distinct taxation structure.
Sales Tax and Cannabis in New Jersey
Recognizing the distinction between the general sales tax and cannabis-specific fees is essential for cannabis businesses and consumers. Recreational cannabis is taxed like any other retail product. However, it is true that there are additional requirements for dispensaries as well as cultivators.
We can present a quick breakdown as below table:
| Tax Type | Rate / Amount | Who Pays | Details |
| State Sales Tax | 6.625% | Consumer (Retail) | Applied to recreational cannabis purchases at the retail level. |
| Cannabis Excise Tax NJ (SEEF) | $2.50 per ounce (proposed increase to $15 per ounce in FY 2026 budget) | Cultivators | A fixed fee paid monthly by licensed cultivators on usable cannabis. |
| Local Transfer Tax | Up to 2% | Dispensaries / Local Businesses | Municipalities decide whether to apply this additional tax. |
Medical cannabis is fully tax-exempt, and makes sure that patients have access to necessary products without additional costs.
It Matters for Cannabis Businesses
Dispensaries should track the mentioned distinct tax rates with full attention. This covers filing Form ST-50 quarterly and holding detailed invoices and paying attention to any changes to the NJ cannabis tax rate. In the case of failure in compliance with dispensary tax requirements NJ, result can evolve to penalty payments or even licensing issues.
Engaging a cannabis business CPA NJ can present aid with:
- Precise New Jersey cannabis tax reporting
- Managing cannabis social equity fee NJ payments
- Streamlined cannabis tax filing service processes
Final Takeaway
While some shoppers assume a simple 7% sales tax, the correct, actual rate is 6.625%. For cannabis businesses, this number is just one part of a larger taxation system that covers excise fees and possible local taxes. If you need professional assistance, reach out to our dedicated team at Dimov Tax in order to remain fully compliant and focus on growth.