There are several vehicles exempt from sales tax in New Jersey. To claim your exemptions you must visit a motor vehicle agency. If you wish to claim exemptions other than the ones listed below, contact the MVC Sales Section of the New Jersey Division of Taxation at (609) 984-6206.
Sales Tax Exemptions
Exemption #1 – For vessels only:
- Purchaser is a non-resident of NJ, is not engaged in or carrying on in NJ any employment, trade or business in which the vessel will be used.
Exemption #2 – Vehicle is acquired by:
- Federal government or one of its agencies.
- State of New Jersey or one of its agencies or political subdivisions.
- United Nations or any other international organization of which the United States is a member.
Exemption #3 -
- Vehicles used directly and exclusively for production or the sale of farm products.
- School buses used for transportation of school children.
- Recycling equipment
- Used mobile homes (see Special Conditions below).
- Low Speed Vehicles (LSVs) if certified by the Commissioner of the New Jersey Department of Environmental Protection (NJDEP).
- 100% Zero Emission Vehicles (ZEVs)- Exempt Use Certificate required.
- Resident service member (see Special Conditions below).
- Vehicles for tax-exempt organizations with a 9-digit exemption number from the New Jersey Division of Taxation.
Exemption #4 -
- The vehicle was purchased by a leasing or rental company from a non-registered vendor. To be a valid exemption, you must be registered for New Jersey sales tax.
Exemption #5 -
- Vehicle was acquired by an heir, legatee or trust beneficiary.
Exemption #6 –
- Vehicle was a gift (see Special Conditions below).
Exemption #7 –
- Vehicle was purchased, titled and registered in another state while the purchaser was a non-resident of New Jersey.
Exemption #8 –
- Vessel used for commercial fishing or as a party boat (more than six passengers and subject to annual inspection).
IMPORTANT NOTE: Refer to the NJ Division of Taxation website for guidance on Sales and Use Tax for the purchase of boats and vessels.
- Commercial trucks, truck tractors, trailer or semi-trailers and vehicles registered in New Jersey which meet the following conditions:
- Have a GVWR in excess of 26,000 pounds as specified by the manufacturer; or are operated actively and exclusively for the carriage of interstate freight under a certificate or permit issued by the Interstate Commerce Commission; or
- Are registered as farm vehicles under motor vehicle statute (N.J.S.A. 39:3-24, 25) and have a GVWR in excess of 18,000 pounds as specified by the manufacturer.
- Mobile homes: If you purchased a used mobile home, you do not have to pay sales tax. This exemption does not apply to used travel trailers, campers or recreational vehicles.
- Resident Service Members: Applies if you are a resident service member, stationed out-of-state and buy a car outside of New Jersey but wish to title the vehicle in New Jersey. You may defer payment of tax until the vehicle is brought to the state upon release from active military duty. You must present a Letter of Deferment (issued by the Division of Taxation) at the time of titling. If Letter of Deferment is not received, sales tax must be paid.
- Disabled Veterans: If you are a disabled vet and received funds from the Veterans Administration to purchase a car, you are not subject to tax.
- Financial Institutions: If you are a bank, leasing company, insurance company or other financial institution and take the title for reasons of repossession, insurance loss or lien addition, you don’t have to pay sales tax unless the vehicle is held by the organization for its own use. A sales tax-satisfied stamp is required with the appropriate exemption number.
- Gift: If the vehicle is a gift, the sales price must be noted as “GIFT”. If the information appears to be changed or altered, additional documentation may be required by the Motor Vehicle Commission.