The annual back-to-school tax holiday in New Jersey has been officially discontinued. The decision, part of the fiscal adjustments in the Fiscal Year 2025 budget, was announced by Governor Phil Murphy. The tax holiday, which previously offered significant savings on school supplies for parents, students, and teachers, will no longer be in effect.
The tax-free holiday was initially introduced as a measure to help families cope with the cost of school supplies. However, an analysis from the non-partisan Office of Legislative Services estimated that the 10-day tax holiday resulted in up to $60 million in lost revenue for the state. The average family would have saved around $65 per student on back-to-school supplies if the sales tax was waived.
Families are not the only ones that will need to dole out more money for school supplies this year; it also affects teachers, some of whom can spend a thousand dollars or more per year purchasing items for their class. However, the State Assembly has passed legislation (A3416) that would allow teachers to deduct up to two-thousand dollars per year on their state tax return for monies spent on school supplies. The Senate has yet to schedule the bill for a full vote.
The decision to end the tax holiday has been met with mixed reactions. While some residents express concern over losing a valuable financial break, others acknowledge the need for budgetary adjustments to fund critical state programs. The administration has emphasized that the reallocated funds will address long-term educational needs and other essential services.