New Jersey could lower sales tax rate, eliminate transaction threshold for remote sellers

The New Jersey Legislature is once again looking to eliminate the state’s economic nexus transaction threshold. It’s also considering legislation to decrease the New Jersey sales tax rate.

• New Jersey may lower its sales tax rate to 6%. The New Jersey Legislature is considering two bills that would drop the state sales tax rate from 6.625% to 6%. There are no local sales taxes in New Jersey.
• New Jersey could eliminate its 200-transactions threshold for remote sellers. Legislation has been introduced to remove the 200-transactions threshold for economic nexus, leaving only the $100,000 in sales threshold.
• Economic nexus compliance remains complex for multistate sellers. Even if New Jersey aligns with other states that have removed the transaction threshold, businesses still need to monitor their sales activity in states where they haven’t registered.

New Jersey Assembly Bill 2702 and Senate Bill 2466, both introduced on January 13, 2026, would decrease New Jersey’s sales and use tax rate from 6.625% to 6% beginning January 1, 2026. Similar legislation introduced in November 2025 failed to gain traction.

While taxpayers would likely appreciate a lower sales tax rate, the January 1, 2026, effective date would complicate compliance. If either bill is favorably received, the start date will likely be pushed back.

New Jersey started enforcing economic nexus laws for remote sales tax on November 1, 2018. Like other states with an economic nexus law, which is every state with a sales tax, New Jersey provides an exception for remote sellers whose New Jersey sales are below a certain threshold. 

Under current law, a remote seller establishes economic nexus with New Jersey if, in the current or prior calendar year, it:

• Has more than $100,000 in gross revenue from sales of tangible personal property, specified digital products, or taxable services delivered into New Jersey; or
• Made 200 or more separate transactions of tangible personal property, specified digital products, or taxable services delivered into New Jersey.

S711 and A3419, both introduced in January 2026, seek to remove the 200-transactions threshold in 2026. New Jersey would then only use the $100,000 in sales threshold to determine economic nexus for sales tax.

The bills would also eliminate the 200-transactions threshold for New Jersey corporation business tax (CBT). Under current law, a corporation is subject to CBT if it has more than $100,000 in receipts from sources within New Jersey or 200 separate transactions delivered to customers in the state during the calendar year or the corporation’s fiscal year.

New Jersey isn’t the only state to use a transaction threshold for something other than sales and use tax. For example, Hawaii uses the same economic nexus threshold for general excise tax (GET) and net income tax; Texas uses the same economic nexus threshold for franchise tax and sales tax; and Washington uses the same economic nexus threshold for sales tax and business and occupation (B&O) tax.

Bloomberg Tax highlights problems associated with using different nexus standards for different taxes and encourages states to align their nexus laws.

It’s not certain that New Jersey will eliminate the 200-transactions threshold for economic nexus in 2026; a similar bill introduced in 2024 was approved by the Senate but never made it out of the Assembly State and Local Government Committee. However, 16 other states have gotten rid of their remote sales tax transaction thresholds. New Jersey will probably get there eventually.

Sales tax experts generally support getting rid of the remote seller transactions threshold, which can create a sales tax obligation for businesses with a high volume of low-value sales. For some such businesses, the costs of collecting and remitting remote sales tax may exceed the benefit of doing business in the state.

Keeping on top of sales tax obligations remains a challenge for companies doing business across the United States.

Information about each state’s economic nexus threshold can be found in our state-by-state guide to economic nexus laws. If you’re wondering where you may be most at risk for establishing economic nexus, taking a free sales tax risk assessment can help. Businesses with a more complex sales tax footprint may benefit from a more robust sales tax risk assessment.

Avalara AvaTax customers can monitor their sales activity in all states via the in-product economic nexus map, which is updated weekly. Visually identifying states where you have or will soon establish economic nexus can help you maintain compliance and make informed decisions. Learn more about AI-powered Avalara tax compliance software.

Is New Jersey lowering its sales tax rate in 2026?

Maybe. New Jersey lawmakers are considering legislation to lower the sales and use tax rate from 6.625% to 6% in 2026. However, a rate change isn’t certain.

What is New Jersey’s economic nexus threshold for sales tax?

Under current law, remote sellers establish economic nexus with New Jersey if they exceed $100,000 in gross sales or make at least 200 separate transactions in the current or prior calendar year. Proposed legislation would remove the 200-transactions threshold.

How does eliminating the transaction threshold affect remote sellers?

Removing the 200-transactions threshold could reduce compliance burdens for businesses with high volumes of low-dollar sales. However, sellers would still need to track revenue thresholds and monitor nexus rules in states where they make sales but are not registered.

This blog post has been updated. It was originally published in January 2025.