NJ plans back-to-school sales tax holiday – see what’s covered
RED BANK – Parents will be able to enjoy a small discount on their back-to-school shopping later this summer through a sales tax holiday, Gov. Phil Murphy and lawmakers announced Wednesday.
The tax break is being approved as part of the negotiations over the 2023 state budget, which must be in place by the end of the month to avoid a partial state government shutdown. A deal is expected, in large part because the state is awash in unexpectedly high tax collections.
Murphy said the tax holiday will run for 10 days, from Aug. 27 to Sept. 5, meaning it will cover two weekends and end on Labor Day. That timing would mean some schools will actually be back in session before the program kicks off.
“This sales tax holiday will cover a whole range of items used by our students, pre-K right up through college and university, from pens and pencils and notebooks to art supplies, textbooks or other study guides, new laptop computers, among much more,” Murphy said.
“We will also include in this holiday many of the sports and recreational equipment our students will require to perform at their best on the playing field or in other extracurricular activities,” he said. “And vitally, it will also cover bicycle helmets, an important safety investment for any child but obviously and especially for those students who ride their bikes to school.”
Clothing and shoes are already exempt from sales taxes in New Jersey, an exemption that is saving consumers an estimated $661 million in taxes this year, according to the state's latest tax expenditure report.
Fifteen states and Washington, D.C., have back-to-school sales tax exemptions currently.
“Make no mistake about it. This is the Legislature’s direct attack on inflation,” said Senate President Nick Scutari, D-Union. “This is one of the things that our state Legislature can do to attack rising costs across the state in a limited number of goods. And this is something that we have the money to do, and this is giving that money back to taxpayers.”
Assembly Speaker Craig Coughlin, D-Middlesex, said the average family spends around $800 on back-to-school shopping.
“Getting kids prepared for the new academic year can weigh on a family’s budget, as we all know,” Coughlin said. “… Our plan lowers the price tag for the nearly 2 million families with K-to-12 students here in New Jersey, for teachers who often spend their own money to support their students, and for those headed off to college, as well as small businesses who may be able to take advantage of the program. And that’s money back in the family’s pocket.”
“Whether a student is just starting their academic journey or continuing on to a higher education, a few extra dollar savings will certainly add up,” said Murphy, who said the savings could amount to “a couple hundred bucks.”
New Jersey’s sales tax is 6.625% in most municipalities, though half that in 37 municipalities that have Urban Enterprise Zones.
Assembly Minority Leader John DiMaio, R-Warren, said that consumers expect to spend an average of around $434 on school supplies and electronics, removing already tax-exempt spending on clothes and shoes from their shopping carts. The savings on $434 of spending would be $28.75.
“Another underwhelming gimmick when people need real relief,” DiMaio said. “How tone-deaf are they? When you can’t afford living in New Jersey, this short holiday on notebooks and pencils is meaningless.”
Senate Minority Leader Steve Oroho, R-Sussex, said Senate Republicans have proposed "real tax relief" totaling $8 billion that includes $1.500 immediate rebates.
“I don't think the 13 cents in sales tax savings on a $2 box of pencils that Democrats have proposed amounts to substantial relief for New Jersey families," Oroho said. "... And do we really expect people to wait until the very last week to begin to prepare for the upcoming school year? Trenton Democrats have lost touch with reality.”
School supplies included in the sales tax holiday
Under the proposal, tax-exempt supplies and equipment would include:
- School supplies, such as pens and pencils, notebooks and binders
- School art supplies, such as paints and paintbrushes, clay and glazes
- School instructional materials, such as reference books, reference maps, globes, textbooks and workbooks
- Computers with a price of less than $3,000 and school computer supplies, such as computer storage equipment, printers and personal digital assistants with a sales price of less than $1,000 per item
- Sports or recreational equipment, including but not limited to ballet and tap shoes, baseball and hockey gloves, cleated or spiked athletic shoes, mouth guards, roller and ice skates, and sports and motorcycle helmets
The sales-tax holiday will apply to both brick-and-mortar stores and online sales, said Treasury Department spokeswoman Danielle Currie.
Sen. Fred Madden and Assemblyman Paul Moriarty, both D-Gloucester, said they have introduced legislation making the back-to-school tax break an annual program.
“Prices are rising with inflation showing no signs of letting up,” Moriarty said. “Now more than ever, it is critical to help families cut costs where they can. A tax holiday right before school begins each year will be something parents and teachers can count on while back-to-school shopping.”
The back-to-school tax break bill was first proposed in 2006 and in every legislative session since.