Back-to-school supplies — from pencils to laptops — will be tax-free in New Jersey for 10 days starting Saturday as part of a sales tax holiday included in the state budget of 50.6 billion dollars signed by Governor Phil Murphy on July 1.
The tax holiday, which runs from August 27 through September 5, will remove New Jersey’s 6.625% sales tax on a range of supplies, including pens, notebooks, art supplies, textbooks, computers and sports equipment. Clothing and footwear are already exempt from sales tax in New Jersey.
“The savings should be significant,” Murphy said Wednesday morning during a television interview. He previously said the savings could be “a few hundred dollars” for some.
Anyone shopping in the Garden State can take advantage of the savings — not just students or residents — and tax exemptions apply to online and in-store sales. The average household will likely save between $20 and $50 on a typical school trip, according to estimates cited by state lawmakers.
“Back-to-school shopping can be stressful on its own, but it can be even more stressful for parents, students and teachers who are struggling to make ends meet,” Murphy said. “As inflation remains a central concern, this sales tax exemption is one of the ways we are prioritizing affordability for our families.”
The one-off initiative was one of several tax relief proposals introduced in the final weeks of budget negotiations between Murphy, State Senate Speaker Nicholas Scutari, D-Union, and Assembly Speaker Craig Coughlin, D-Middlesex. Trenton’s coffers were overflowing with billions of dollars in excess tax revenue, and Democrats were under pressure to provide relief.
When the tax holiday was announced, Murphy and his fellow Democrats who control the state legislature touted it as a way to ease the burden of rising costs. The annual inflation rate in the United States had just hit a new 40-year high of 8.6% in May, and Scutari said the tax holiday was “the direct attack on inflation” of the legislature.
But Republican lawmakers, political pundits and left-wing activists have largely dismissed the initiative and dismissed it as a gimmick that won’t make New Jersey more affordable for low-income families.
Assembly Minority Leader John DiMaio, R-Warren, called it a ‘red fugue to make people think they’re not overtaxed when they are and continue to be with the Democrats in charge”.
Coughlin cited estimates in June that would represent a savings of about $50 on school supplies for the average family. DiMaio referenced 2021 data from statista.com that estimated savings would be around $28 on average.
By the end of June, New Jersey had raked in a record tax revenue windfall of more than $10 billion, and the sales tax exemption is expected to cost the state about $75 million in lost revenue, according to the Department of State Treasury.
New Jersey Treasurer Elizabeth Muoio said the tax holiday “will help hard-working parents and teachers across our state spend a little more money and fulfill the annual back-to-school shopping ritual of Christmas.” ‘excitement rather than concern’.
“For many families and educators, there are understandable concerns about getting their children ready for the school year or supplying their classrooms due to the rising cost of goods at scale. national,” Muoio said in a statement.
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