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Peace and Prosperity

New Jersey Eliminates a Tax


New Jersey has a reputation as a high tax state. This month, something happened that should pare back that reputation some: The state eliminated its sales tax on medical marijuana.

The tax was eliminated under the terms of 2019 state law that set in motion the phasing out of the state’s sales tax on medical marijuana. From its starting rate of 6.625 percent, the sales tax lowered to four percent on July 1, 2020 and then to two percent on July 1 of last year. Come the first of this month, the tax went bye-bye as scheduled.

Given that medicines are exempt from New Jersey state sales tax, the elimination of the state sales tax on medical marijuana means that the state is now, in this regard, finally treating medical marijuana as favorably as other medicines.

Good for New Jersey. States would do well to review their taxes on marijuana, both medical and recreational, with an eye toward lowering tax rates or eliminating taxes altogether. These relatively newly legalized products need not be taxed at distinctly high rates.
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