New Jersey is one of the most tax-friendly shopping states in the country. Clothing and footwear are completely tax-free — always, year-round, with no spending limit. Add Urban Enterprise Zone discounts, outlet prices up to 70% off, and VIP coupon books, and a NJ shopping trip can save you far more than just the drive. Here’s how to use every advantage.
How NJ Tax Savings Work: The Big Picture
New Jersey’s general sales tax rate is 6.625%. But shoppers benefit from two major exemptions that most visitors don’t fully know about:
- Clothing & footwear: 0% tax statewide — every store, every mall, every day of the year
- Urban Enterprise Zones (UEZ): half the state tax rate — certain cities charge only 3.3125% on most goods (not just clothing)
Combined with outlet-level discounts, NJ shopping is genuinely hard to beat in the Northeast — especially if you’re driving in from New York City, Pennsylvania, or Connecticut.
1. Clothing & Footwear: Always Tax-Free in NJ
Unlike states that run limited “tax holiday” weekends, New Jersey exempts clothing and footwear from sales tax permanently. It doesn’t matter what you’re buying, how much you spend, or which store you’re in — if it’s clothing or shoes, it’s tax-free.
This exemption applies at every mall and outlet in the state, from American Dream to The Mall at Short Hills to the Jersey Shore Premium Outlets.
Pro tip: For the full breakdown of exactly what’s exempt — and what’s not (handbags, jewelry, belts) — see our detailed NJ No Sales Tax on Clothing guide.
How Much Can You Save vs. Neighboring States?
| State | Clothing Tax | Tax on $500 clothing purchase |
|---|---|---|
| New Jersey | 0% | $0 |
| New York (outside NYC) | 0% under $110/item | ~$0–$22 |
| New York City | 8.875% over $110/item | ~$44 |
| Pennsylvania | 6% | $30 |
| Connecticut | 6.35% over $50/item | ~$32 |
On a $1,000 shopping trip, an NYC shopper saves up to $88 by shopping in NJ instead. Before you even factor in outlet discounts, the cross-state drive often pays for itself.
2. Urban Enterprise Zones: Half-Price Tax on Almost Everything
New Jersey’s Urban Enterprise Zone (UEZ) program is less well known — but for shoppers, it’s a significant extra advantage. In designated UEZ cities, most goods are taxed at half the normal NJ rate: 3.3125% instead of 6.625%.
Two of NJ’s best shopping destinations are located in UEZ cities:
- Jersey Gardens (Elizabeth) — NJ’s largest outlet mall is in the Elizabeth UEZ. You pay 3.3125% on electronics, housewares, cosmetics, accessories, and most non-clothing items. Clothing is still 0%.
- Newport Centre (Jersey City) — Jersey City is also a UEZ. Same reduced rate on most taxable goods, with clothing still completely exempt.
For shoppers who buy beyond clothing — perfume, handbags, electronics, home goods — the UEZ malls are where you’ll save the most overall.
UEZ Savings in Practice
| Item | Standard NJ rate | UEZ rate (Elizabeth/Jersey City) | Saving on $200 item |
|---|---|---|---|
| Clothing/shoes | 0% | 0% | $0 (already free) |
| Handbag | 6.625% | 3.3125% | $6.63 |
| Electronics | 6.625% | 3.3125% | $6.63 |
| Cosmetics/perfume | 6.625% | 3.3125% | $6.63 |
3. Outlet Discounts: Stack Them on Top
NJ’s outlet centers already sell merchandise at 25–70% below standard retail prices. Add the 0% clothing tax — or the UEZ reduced rate — and the real cost of an NJ outlet purchase gets dramatically lower than shopping at a full-price store in a taxed state.
Here’s a quick example: a $200 coat at a NYC department store costs $200 + ~$17.75 tax = $217.75. The same brand at a NJ outlet might be $120 with 0% tax — a saving of nearly $100 on a single item.
The best NJ outlets for combining tax savings with outlet discounts:
- Jersey Gardens, Elizabeth — Largest outlet mall in NJ, UEZ location, 200+ stores
- Jersey Shore Premium Outlets, Tinton Falls — 170+ stores, Simon Premium brand
- Gloucester Premium Outlets, Blackwood — 90+ stores, best option for South Jersey
- Jackson Premium Outlets, Jackson — 70+ stores near Six Flags, great for families
- Atlantic City Outlets (The Walk) — Tanger Outlets in downtown AC, combine with a day trip
- Flemington Outlets — Smaller Liberty Village-style outlet in Hunterdon County
4. VIP Coupon Books: An Extra Layer of Savings
Simon and Tanger Premium Outlets offer free VIP Shopper Club memberships that come with coupon books worth hundreds of dollars in additional discounts. You can usually pick one up at the outlet’s guest services desk on the day of your visit — or download offers through the outlet’s app before you arrive.
We’ve found that combining a VIP coupon book with already-reduced outlet prices and NJ’s 0% clothing tax is one of the best ways to maximize a shopping trip. For more detail on how to find deals across all NJ malls, see our NJ Mall Coupons & Deals guide.
5. Luxury Shopping Tax-Free: Short Hills & Beyond
NJ’s tax exemption isn’t just for outlet bargains — it works just as well at luxury price points. The Mall at Short Hills is one of the most upscale malls on the East Coast, home to Neiman Marcus, Nordstrom, Bloomingdale’s, Louis Vuitton, Gucci, Prada, and dozens of other premium brands.
Buying a $1,500 designer coat at Short Hills instead of a comparable store in NYC means saving over $130 in tax alone — on top of any sale prices or seasonal promotions. For high-ticket fashion purchases, the NJ advantage compounds quickly.
Tax-Free Shopping FAQ
Does NJ have a tax-free weekend?
No — and NJ doesn’t need one. Clothing is permanently tax-free year-round. States like New York and Connecticut run limited tax holiday weekends because their clothing taxes are normally high. NJ’s exemption is always in effect.
Are all NJ malls in Urban Enterprise Zones?
No. Only malls located in designated UEZ cities get the reduced 3.3125% rate on taxable goods. In New Jersey, Jersey Gardens (Elizabeth) and Newport Centre (Jersey City) are the primary mall destinations in UEZ cities. Standard NJ malls charge 6.625% on taxable items — but still 0% on clothing everywhere.
Is furniture tax-free in NJ?
No. Furniture is taxable at the standard 6.625% NJ rate (or 3.3125% if purchased in a UEZ location like Elizabeth). Only clothing and footwear are fully exempt. See our NJ Furniture Stores guide for top shopping destinations.
Does the NJ tax exemption apply to children’s clothing?
Yes — children’s clothing and baby apparel are fully tax-free in NJ, with no age or size restrictions. It’s one of the best reasons to stock up on kids’ clothes during a NJ mall trip.