New Jersey Tax Burden Ranking in 2026: How NJ Compares

New Jersey ranks among the ten states with the highest overall state and local tax burden in the United States. In WalletHub’s March 2026 comparison, New Jersey placed 8th highest, with state and local taxes equal to an estimated 9.52% of residents’ total personal income.

That headline is useful, but it does not tell the whole story. New Jersey’s position is driven primarily by property taxes, while its sales and excise tax burden is comparatively low. This guide explains the numbers, why different studies give New Jersey different ranks, and what residents should consider when planning their own taxes.

What “tax burden” means

A tax rate and a tax burden are not the same thing. A rate is the percentage applied to a particular tax base. Tax burden estimates how much residents collectively pay in state and local taxes compared with their total personal income.

WalletHub combines three categories:

1. Property taxes as a share of personal income
2. Individual income taxes as a share of personal income
3. Sales and excise taxes as a share of personal income

This makes the ranking a broad comparison, not a prediction of any one household’s bill. A renter, homeowner, retiree, commuter, business owner and high-income household can experience New Jersey’s system very differently.

New Jersey’s place among the highest-tax-burden states

Figures are from WalletHub’s 2026 comparison. Rankings can move when income, tax collections or methodology changes.

Why New Jersey ranks so high

1. Property taxes are the largest factor

New Jersey’s estimated property tax burden is 4.38% of personal income, the second highest in WalletHub’s comparison. Property taxes fund municipal government, counties and especially local school systems. Because property tax is local, there is no single statewide property tax rate: the bill depends on assessed value and the tax rate in the municipality.

Homeowners should also consider relief programs and deductions. The New Jersey Division of Taxation maintains information on ANCHOR, Senior Freeze, Stay NJ and other property tax relief.

2. The income tax is progressive

New Jersey’s individual gross income tax uses graduated rates from 1.4% to 10.75%. The highest rate only applies at high taxable-income levels, so quoting the top rate alone can exaggerate the burden for a typical household. Filing status, New Jersey gross income, exemptions, retirement exclusions, eligible medical expenses and property tax deductions can all affect the result.

WalletHub ranks New Jersey 22nd for individual income tax burden—close to the middle of the states—even though the top marginal rate is comparatively high.

3. Sales taxes are comparatively moderate

The statewide sales and use tax rate is 6.625%. New Jersey exempts many necessities, including most unprepared food, most clothing and footwear, and qualifying prescription medicines. WalletHub ranks the state 43rd for sales and excise tax burden, placing it among the lower-burden states in this category.

Why another source may say New Jersey is sixth-highest

Tax rankings are not interchangeable. The Tax Foundation’s latest state-local burden model, based on calendar-year 2022 data, estimated a 13.2% burden and described New Jersey as the sixth-highest state. Its approach assigns taxes to the residents who ultimately bear them, including taxes paid to other states.

A separate Tax Foundation measure, based on Census collections data, ranks New Jersey fifth for state and local tax collections per capita. That is a collections measure, not the same as tax burden relative to income.

None of these figures is necessarily “wrong.” WalletHub’s current comparison, Tax Foundation’s economic-incidence model and collections per capita answer different questions. The most responsible summary is that New Jersey is consistently a high-tax state overall, with property taxes as its most prominent pressure point.

New Jersey compared with neighboring states

New York ranks higher than New Jersey in WalletHub’s current overall burden comparison. Pennsylvania falls below New Jersey. Delaware’s lack of a general sales tax can make shopping costs look lower, but residents still face other state and local taxes. For commuters, tax credits and reciprocal or nonresident filing rules can matter more than a statewide ranking.

Location decisions should therefore consider the full household picture: housing price, property tax, income, commute, local services, insurance and available credits—not only one headline percentage.

What residents can do

• Estimate New Jersey income tax using the correct filing-status schedule.
• Check whether property tax deductions or relief programs apply.
• Keep records of taxes withheld when working across state lines.
• Review taxable and exempt purchases when calculating use tax.
• Confirm current deadlines and rules directly with the New Jersey Division of Taxation.

Sources and methodology

• WalletHub: Tax Burden by State
• Tax Foundation: State and Local Tax Burdens by State
• Tax Foundation: State and Local Tax Collections per Capita
• New Jersey Division of Taxation

Ranking data changes over time. This article uses the newest WalletHub comparison available at publication and identifies older datasets where they are discussed.