The facts on New Jersey’s Tax Climate

  • 8.97%
    Individual Income Tax
  • 9%
    Corporate Income Tax
  • 7%
    Sales and Excise Taxes
  • $2,625
    Property Taxes

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 5th highest nationally. New Jersey’s 2010 state-level individual income tax collections were $1,176 per person, which ranked 7th highest nationally.

Tax Freedom Day Arrives on May 1 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 2012, New Jersey taxpayers work until May 1 (ranked 2nd nationally) to pay their total tax bill. The Tax Freedom Days of neighboring states are: Delaware, April 17 (ranked 17th nationally); Pennsylvania, April 18 (ranked 14th nationally); and New York, May 1 (ranked 2nd nationally).

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% (3rdnationally), 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 2013 Business Tax Climate Index Ranks 49th

New Jersey ranks 49th 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. The ranks of neighboring states are as follows: New York (50th), Pennsylvania (19th), and Delaware (14th).

50-State Comparison of Business Tax Climates (data only)
2013 State Business Tax Climate Index (full study)