You're 40; Now Get To Work: Making the State Sales Tax Pull its Weight

By Mary E. Forsberg


In many ways, modern New Jersey first started to take shape in 1966-and it took a tax to make things happen. The state sales tax as it exists today began in that year, giving New Jersey for the first time enough resources to help make a truly positive difference in the lives of its citizens. One of the initial impacts of the new revenue stream was expansion of the state college system, opening the doors of in-state higher education to many more New Jerseyans than ever had the chance before.

Before 1966, the only taxes that individuals in New Jersey paid to the state were on the purchase of gasoline, tobacco products and alcoholic beverages. Yes, it was cheaper. But, arguably, people got what they paid for. New Jersey today is a different place, a better place. Now, as the sales tax marks its 40th birthday, it is time to ask some important questions of this levy. Is it doing all it can to support the needs of 21st century New Jersey? Is it in step with the times or stuck in the past? Is the tax as fair as it could be?

This report addresses those and other questions. It offers a contemporary look at a middle-aged tax, in the larger context of how New Jersey can meet its short- and long- term revenue needs and serve the people who live and work in the state.

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