In this piece, we will take a look at the 20 best places to live in NJ with low taxes. For more places, head on over to 5 Best Places to Live in NJ with Low Taxes.
New Jersey is one of the smallest states in the U.S. in terms of area. The state covers 22,590 square kilometers, making it the fourth smallest state in the contiguous United States (CONUS). However, despite its small size, the state’s population makes it the 11th most populous region in America. New Jersey’s population sits at 9.2 million according to the U.S. Census Bureau, making it the most densely populated region in the U.S. Finally, in terms of economic output, New Jersey is the ninth biggest economy within America, through a gross domestic product (GDP) of $753 billion – lending it a GDP per capita of $79,594 as of 2022.
The state was also one of the first states to join the Union of the United States. The American Revolution was initially set in motion by a confederation of 13 states. All of these ratified the Articles of Confederation which set up the U.S. Congress as a central body representing each state. New Jersey was one of the last states of the original thirteen that ratified these articles, with the state also playing a crucial role in the revolutionary battles as well.
Since then, New Jersey has prospered silently, and at one point in time also housed the highest number of millionaires in the U.S. per capita. The state also benefits from setting lower sales tax rates than New York, which often leads residents in its neighboring states to come to Jersey for their shopping. At the same time, New Jersey also has lower income taxes, which motivates some people to get a job in New York and live in New Jersey – effectively utilizing the best of both worlds.
At the same time, New Jersey is also known as one of the hubs of the biotechnology and pharmaceutical industry in the U.S. Dozens of biotechnology companies are either headquartered or have a presence in the state, with some of the notable ones being ADMA Biologics, Inc. (NASDAQ:ADMA), Bausch + Lomb Corporation (NYSE:BLCO), and Becton, Dickinson and Company (NYSE:BDX). In fact, research from BioPharma suggests that New Jersey was home to 14 of the 20 largest pharmaceutical companies in the U.S. as of 2021, with the biggest American pharmaceutical firm in America, Johnson & Johnson (NYSE:JNJ) being headquartered in New Brunswick. Cumulatively, these twenty companies generated $120.9 billion in revenue in 2021, however several of these, such as Pfizer Inc. (NYSE:PFE), are headquartered in other regions such as New York.
Data from the New Jersey government shows that biotechnology and pharmaceuticals employed 76,510 people in 2020 or 2.4% of its private workforce. While on the face of it, this appears to be quite low, the national average percentage during the same time period was 1.3%. Within the industry, the pharmaceutical sector was the largest employer, accounting for 43.6% of the workforce with biotechnology coming in at a close second place by accounting for 42% of the total share. The healthcare sector just doesn’t employ anyone either, as the government’s data shows that 70.7% of the workers had a bachelor’s, master’s, or Ph.D. degree.
Apart from the healthcare industry, the transportation and logistics industry is an important sector in the New Jersey economy as well. This is because of the fact that New Jersey is a port city and shares the port with New York, making the port the busiest on the eastern coast of the U.S. New Jersey also has the honor of having the world’s first container port, and within the sector, most of the resources and revenue are concentrated among the largest firms. According to the New Jersey Department of Labor & Workforce Development, the transportation and logistics sector contributed $62.5 billion to the New Jersey economy in 2020 with the average private sector wage sitting at a respectable $75,244. During the same time period, the Port of New York and New Jersey saw more than $80 billion in business activity and generated almost $10 billion in tax revenues. As a whole, six of the largest industries in transportation, distribution, and logistics account for 64.5% of the total employment. Another large sector of the Jersey economy is manufacturing, with $54 billion in economic contribution in 2020 and chemicals production playing a crucial role.
Finally, in terms of tax revenue, the state of New Jersey collected $26.5 billion in taxes in fiscal year to date as of February 2023. These marked a 2.3% annual growth, but a 5.7% drop in February 2023 compared to February 2022. February tax collection stood at $2.8 billion, with gross income tax accounting for the largest share at $1.4 billion. The state’s top individual income tax rate is 10.75%, with corporate income tax ranging from 6.5% to 11.5%. The state’s sales tax rate is 6.625% with the maximum local sales tax sitting at 3.3%. Property taxes as a percentage of occupied value sit at 2.23%.
With these details in mind, let’s take a look at some top places to live in New Jersey with low tax rates.
Our Methodology
We used General Tax Rates compiled by the government of New Jersey to compile our list. This lists down general and effective tax rates for New Jersey’s more than five hundred cities, townships, towns, and boroughs. Out of these, the ones with the lowest taxes were selected, and the places are listed accordingly.
20 Best Places to Live in NJ With Low Taxes
20. Loch Harbor Village
Effective General Tax Rate: 0.966%
Loch Harbor Village is one of the smallest municipalities in New Jersey. Its median family income is $119,167.
19. Ship Bottom Borough
Effective General Tax Rate: 0.946%
Ship Bottom shares a coast with the Atlantic Ocean and it has a population of more than a thousand people with summer populations growing far beyond this.
18. Harvey Cedars Borough
Effective General Tax Rate: 0.933%
Harvey Cedars was incorporated in 1894. It houses less than five hundred people and has a median family income of 112,656.
17. Longport Borough
Effective General Tax Rate: 0.930%
Longport houses less than a thousand people and shares a coast with the Atlantic Ocean. The majority of its population is white and the region has a median household income of $107,188 as of 2010. The borough has a strong surfing culture due its beach, which also offers other water sports.
16. Surf City Borough
Effective General Tax Rate: 0.897%
Surf City is a coastal borough that shares a long coast with the Atlantic Ocean. It has close to two thousand people living in its boundaries. The borough was incorporated in 1894. Its median family income is lower than other boroughs on our list and sits at $74,479.
15. Rockleigh Borough
Effective General Tax Rate: 0.891%
Rockleigh is often ranked as one of the best places to live in New Jersey. It is home to the U.S. subsidiary of Volvo and the median family income is a high $139,861 and is known for large family homes.
14. Barnegat Borough
Effective General Tax Rate: 0.854%
Barnegat is a lighthouse borough that borders the Atlantic Ocean. The median family income sits at $104,375.
13. Long Beach Township
Effective General Tax Rate: 0.85%
Long Beach Township, as the name suggests, is a rather long beach. Its population grows to more than a hundred thousand people in summer, and the median family income is $95,417.
12. Bay Head Borough
Effective General Tax Rate: 0.836%
Bay Head is another peninsula based borough that borders the Atlantic Ocean. The median family income in the region is quite high at $134,583.
11. Lavallette Borough
Effective General Tax Rate: 0.813%
Lavallette is a relatively larger borough with a population of close to two thousand people. It is relatively less prosperous compared to other heavy hitting boroughs on our list, with a median family income of $76,797 as of 2010.
10. Alpine Borough
Effective General Tax Rate: 0.786%
Alpine is the easternmost point in New Jersey, and one of the most prosperous regions in the state when it comes to per capita income. At the same time, homes are quite expensive in the area, to the tune of multi million price tags.
9. Sea Girt Borough
Effective General Tax Rate: 0.677%
Sea Girt is another southernmost borough in New Jersey. The area has expensive homes and the median family income was $150,719 in 2010.
8. Allenhurst Borough
Effective General Tax Rate: 0.672%
Allenhurst is located on the Atlantic Coast and its proximity to New York City makes it a popular location for people who work in New York but live in New Jersey. Its median family income was $131,500 in 2010.
7. Mantolocking Borough
Effective General Tax Rate: 0.661%
Mantolocking is one of the highest earning areas in New Jersey, despite being one of the smallest. A 2010 survey from the Census Bureau pegged the median household income in the area at $151,667. The area is a Republican stronghold.
6. Sea Isle City
Effective General Tax Rate: 0.624%
Sea Isle City is another popular tourist location in New Jersey, with its population swelling to thousands of people during the summer months. It hosts several annual festivals and has an amusement park.
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Disclosure: None. 20 Best Places to Live in NJ With Low Taxes is originally published on Insider Monkey.