Gov. Murphy proposes an increase of state sales tax

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Gov. Phil Murphy proposed raising New Jersey’s sales tax during his budget address Tuesday.

Murphy proposed increasing the tax from 6.625 percent to 7 percent and including ride-sharing services and accommodations like Airbnb.

If the increase goes through, it would put the sales tax up to where it was a few years ago in the state. Former Gov. Chris Christie pushed to lower the sales tax in 2016 when the Legislature voted to raise the gas tax.

RELATED: Gov. Murphy introduces 2019 budget in State House address

“For no apparent reason it got twinned for some political narrative with cutting the sales tax and cutting that 3/8 of a percent cost us hundreds and hundreds of millions of dollars,” Murphy says.

The governor says that putting sales tax back at 7 percent will generate at least a $500 million a year.

“What it prevented us from doing is making the investments in education, infrastructure, in the innovation economy that would be multiples of that saving for that same family,” says Murphy.

The sales tax doesn't apply to items like groceries and clothing, but it does apply to prepared food at a restaurant and big-ticket items like electronics and cars.

Some New Jersey consumers tell News 12 New Jersey that they will certainly notice the increase in their wallets.

“I think it matters. Every bit of money counts so I think it’s a big deal,” says Scotch Plains resident Nora Bogart.

“An increase is an increase,” says New Jersey’s Josh Stern. “It’s going to hit you at some point.”

The governor is also pushing to create a millionaire's tax, which is an income tax increase on the state’s wealthiest residents.

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